On 1 September 20.18 Mr Will Turner started a new blacksmith business called Iron Duke. Iron Duke manufactures and sells domestic cast iron furniture. The following transactions took place during the first financial year of the entity ending 31 August 20.19.

• On 1 September 20.18 the owner Mr Will Turner made his new personal machine, the Belt Grinder, available to the business. The cost of the Belt Grinder was R15 000.
• On 1 September 20.18 the factory building the business will be using was purchased for R230 000 using a long-term loan that is payable on 31 August 20.24.
• The business bought a CNC machine on credit from Big Traders for R11 500. The business paid R1 500 cash for the installation of the machine. Both transactions took place on 30 November 20.18.
• On 31 August 20.19, Mr Will Turner, decided to trade-in the old delivery van for a new delivery van. The trade-in value was R14 500, and the cost of the new delivery van was R60 000, with the difference settled in cash. On the 1 September 20.18 the owner, Mr Will Turner, contributed this delivery van which had cost R45 000 when new. The vehicle was bought on 1 September 20.16 by Mr Will Turner and had a carrying value of R27 000 on 1 September 20.18 with only 3 years useful life remaining. Depreciation needs to be written off on the straight-line basis. (You only need to do the entries for the asset realisation.)

At the year-end, 31 August 20.19, the depreciation for the current year had not yet been provided for.

The following accounting policies need to be applied regarding property, plant and equipment:

• Depreciation on buildings must be written off over 20 years and vehicles over 5 years both on the straight-line basis.
• Machinery must be depreciated at 10% per annum on the diminishing balance method.

Show the effect of each of the depreciation transactions on the basic accounting equation with a plus sign (+) for an increase and a minus sign (-) for a decrease next to each amount under each element. Also indicate the account(s) that will be affected by each transaction next to the affected elements for the financial year ended 31 August 20.19. (The business makes use of the perpetual inventory system.)

Instructions:

Drag the correct answer into the correct space.

An option can be used more than once.

If an options has been provided and it is not applicable to the specific questions please put N/A in the accounts column and a 0 in the amounts column.

Keep the sequence buildings, vehicles then machinery.

Instructions: Drag the correct answer into the correct space. An option can be used more than once. If an options has been provided and it is not applicable to the specific questions please put N/A in the accounts column and a 0 in the amounts column. Keep the sequence buildings, vehicles then machinery. Instructions: Drag the correct answer into the correct space. An option can be used more than once. If an options has been provided and it is not applicable to the specific questions please put N/A in the accounts column and a 0 in the amounts column. Keep the sequence buildings, vehicles then machinery