Question
orange pty ltd purchased a truck for cash for$52,000 plus 10% GST on January 1, 2012. At the time of purchase, it was estimated that
orange pty ltd purchased a truck for cash for$52,000 plus 10% GST on January 1, 2012. At the time of purchase, it was estimated that the useful life of the vehicle would be 100,000 kilometers and it was expected that it would travel that distance over four years. At the end of four years of useful life it was calculated that the truck could be sold for $12,000. The actual distance covered by the truck is as follows: Year ending 30 June: 2012 10,000 kilimeters 2013 25,000 kilometers 2014 30,000 kilometers 2015 22,000 kilometers 2016 8,000 kilometers Required: a. Calculate depreciation for the years ending 30th June 2012 to 30 June 2016 using the units of production method. b. Prepare general journal entries to record the purchase of the truck and for depreciation, using the straight-line method, for the period 1 January 2012 to 30 June 2014. Narrations are not required. c. Prepare an extract from the statement of financial position for the vehicle as at 30 June 2014 using the straight-line method of depreciation.
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