P11-4

Star Book Store is owned and managed by R Star. The following is a closing trial balance of Star Book Store at 30 June 20X7. summarised

STAR BOOK STORE

POST-CLOSING TRIAL BALANCE AT 30 JUNE 20X7

Dr 120 000

Furniture & equipment

18 000

Accumulated depreciation: furniture & equipment

16 000

Motor vehicles

40 000

Accumulated depreciation: motor vehicles

176 000

Cr

58 400

Current assets

Current liabilities

43 600

Capital

Retained profit

336 000

336 000

The following transactions that took place during the year ended 30 June 20X7 have not yet been accounted for:

Furniture & equipment

Furniture & equipment is depreciated at 20% per annum on the diminishing balance method.

The furniture and equipment was revalued to its fair value of C95 000 on 30 June 20X7.

Motor vehicles

The motor vehicles comprise a second-hand panel van used to deliver books to customers. The van was purchased on 1 July 20X2 at a cost of R40 000. The residual value was estimated to be zero.

On 1 July 20X6 the engine of the van was overhauled at a total cost of C12 000. This led to the estimated useful life being extended by two years and the residual value was re-estimated to be C6 000.

On 30 June 20X7, there are indications that the van is impaired. The van could be disposed of to a willing buyer for C25 000 with disposal costs estimated at C500. The present value of future expected cash flows from the use of the van over the remainder of its useful life amounts to C24 200 and the present value of the estimated residual value amounts to C2 800.

The motor vehicles are depreciated at 10% per annum on the straight line basis.

You are required to:

Prepare the statement of financial position of Star Book Store at 30 June 20X7

Questions, Exercises and Problems in Financial Accounting P11 - 4 Star Book Store is owned and managed by R Star. The following is a summarised post. closing trial balance of Star Book Store at 30 June 207. The following transactions that took place during the year ended 30 June 207 have not yet been accounted for: Furniture \& equipment - Furniture \& equipment is depreciated at 20% per annum on the diminishing balance method. - The furniture and equipment was revalued to its fair value of C95 000 on 30 June 207. Motor vehicles - The motor vehicles comprise a second-hand panel van used to deliver books to customers. The van was purchased on 1 July 202 at a cost of R40000. The residual value was estimated to be zero. - On 1 July 20X6 the engine of the van was overhauled at a total cost of C12000. This led to the estimated useful life being extended by two years and the residual value was re-estimated to be C6000. - On 30 June 207, there are indications that the van is impaired. The van could be disposed of to a willing buyer for C25000 with disposal costs estimated at C500. The present value of future expected cash flows from the use of the van over the remainder of its useful life amounts to C24200 and the present value of the estimated residual value amounts to C2800. - The motor vehicles are depreciated at 10% per annum on the straight line basis. You are required to: Prepare the statement of financial position of Star Book Store at 30 June 207