On 1 January 2018 Jump Ltd acquired a vehicle at a cost of $30,000, with a useful life of 6 years, and no residual value. Jump Ltd depreciates vehicles using a straight line method (end of year 30 June) On 1 January 2021 Jump Ltd incurred $5,000 in costs to replace parts on the vehicle, extending its useful life by 2 years, and giving it a residual value of $2,000 On 2 January 2021, the depreciable amount of the vehicle is: Select one: O a. $20,000 Ob $18,000 Oc. $36,000 O d. $33,000 On 1 January 2021, Wish Ltd decided to trade in a vehicle that had been acquired by the company at a cost of $35,000 on 1 July 2019. The vehicle had been estimated to have a useful life of 4 years (no residual value). The new vehicle had a cost of $40,000. Wish Ltd was given a trade-in allowance of $15,000 and paid the balance in cash. On 1 January 2021, in relation to the trade in of the old vehicle, Wish Ltd should recognise in the profit and loss statement a: Select one: O a. Gain on trade in of $6,875 O b. Loss on trade in of $6,875 O c. Loss on trade in of $2,500 O d. Gain on trade in of $25,000 Itch Ltd purchased equipment on 1 July 2019 for $40,000. The estimated useful life of the equipment at acquisition date was 2 years and the residual value was $4,000. Itch Ltd uses straight line depreciation on equipment. The reporting period ends 30 June. Itch sold the equipment on 1 January 2021 for $18,000. After recording all the necessary journal entries on 1 January 2021, the overall impact these entries had on profit for the year ended 30 June 2021 is: Select one: O a. an increase of $5,000. O b. an increase of $18,000. O c. a decrease of $5,000. O d. a decrease of $4,000. The records of Joe Ltd show that on 30 June 2019 (end of reporting period) office building had the following balances: building (cost) $350,000 and accumulated depreciation $35,000. The building was purchased on 1 January 2016 at a cost of $350,000, with an estimated useful life of 33 years and residual value of $20,000. On 1 January 2020, Joe Ltd decided to add a new room to the building. The new room was completed at a cost of $90,000. Adding the new room to the building would increase the useful life of the building by 5 years and increase its residual value by $6,000. The journal entries required at ( 1 January 2020 to close (write off) accumulated depreciation on the building, and (ii) 30 June 2020 to record depreciation expense on the building are as follows: Select one: O a. 0 DR Depreciation expense 40,000 CR Accumulated depreciation 40,000 () DR Depreciation expense 11,000 CR Accumulated depreciation 11,000 b. (0) DR Accumulated depreciation 40,000 CR Building 40,000 (1) DR Depreciation expense 11,147 CR Accumulated depreciation 11,147 O c. 0) DR Accumulated depreciation 35,000 CR Building 35,000 (1) DR Depreciation expense 5,574 CR Accumulated depreciation 5,574 O d. (C) DR Accumulated depreciation 40,000 CR Building 40,000 (1) DR Depreciation expense 5,500 CR Accumulated depreciation 5,500 Derecognition of an item of property, plant and equipment should be recorded when: Select one: O a. The asset has reached a carrying amount equal to half its value. O b. Subsequent expenditure is made on the asset. O c. The asset has decreased in value due to technological changes. d. The asset is sold