Question
Investec Ltd purchased a motor vehicle for 20,000 on 1 January 2016 for use in their advertising company. They depreciate motor vehicles at a rate
Investec Ltd purchased a motor vehicle for 20,000 on 1 January 2016 for use in their advertising company. They depreciate motor vehicles at a rate of 20% using the reducing balance method with a full years depreciation charged in the year of purchase and none in the year of sale. On 30 October 2019 they sold the motor vehicle for 14,000. They will receive the proceeds in January 2020. On 1 November 2019, Investec Ltd purchased a new motor vehicle for use within the business costing 30,000. There were no other transactions reported in relation to motor vehicles.
With reference to IAS 16, Property Plant and Equipment, prepare the following ledger accounts for Investec Ltd, as at 31 December 2019.
a) Motor Vehicles Cost Account
b) Motor Vehicles Accumulated Depreciation Account
c) Motor Vehicles Disposal Account
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