Part A:

Depreciation

Ronnie Pte Limited, a business registered in Fiji, purchased a vehicle for $163,500 VIP on 1 April 2017 for cash. The financial year end for the company is 30 June.

The estimated useful life of the vehicle is 6 years or 120,000km. The estimated residual value of the vehicle is $25,000 VEP.

Usage of the vehicle was as follows:

Period ended 30 June 2017 - 4,000km

Year ended 30 June 2018 - 30,000km

Year ended 30 June 2019 - 28,000km

Year ended 30 June 2020 - 32,000km

Year ended 30 June 2021 - 35,000km

Required:

Use the format below to prepare the depreciation worksheet from purchase date till 30 June 2021:

a) Straight-line method

b) Units of Use/Production method

c) Diminishing balance method at rate of 15% per annum

Part B:

Balance Day Adjustment and Report Preparation

Twitch's Store conducts a retail business in a suburban shopping mall. Prior to opening the store, Twitch had experience with bookkeeping and has been able to prepare the following Trial Balance from the ledger after the operations. Twitch's Store now asks you to prepare an Income Statement and Balance Sheet using a Worksheet.

Twitch's Store

Unadjusted Trial Balance as at 30 June 2020

ACCOUNTS DEBITCREDIT

Motor vehicles $180,000.00

Accumulated Depreciation: Motor Vehicle $67,800.00

Furniture & Fittings $95,000.00

Accumulated Depreciation: Furniture & Fittings$57,000.00

Land & Buildings $210,000.00

Accumulated Depreciation: Building $48,000.00

Inventory $30,500.00

Capital (Opening) $333,630.00 Drawings$15,800.00

Sales $350,600.00

Cost of Goods Sold $205,480.00

Wages $30,500.00

General Expense $19,500.00

Insurance Expense $9,540.00

Delivery Expenses $12,600.00

Commission Received $2,300.00

Interest Revenue $1,500.00

Advertising $5,500.00

Rent & Rates $4,500.00

Accounts Receivable $38,900.00

Allowance for Doubtful Debt$900.00

Petty Cash$600.00

Accounts Payable $29,800.00

GST Paid $2,400.00

GST Collected$2,640.00

Discount Allowed $2,350.00

Provision for Annual Leave $1,500.00

Bank $32,500.00

$895,670.00 $895,670.00

Additional Information:

i.On 31 December 2019 a one-year insurance premium was paid, for $9540 plus VAT. Insurance cover starts on 1 January 2020

ii. Commission received in advance $250 at 30 June 2020.

iii. Interest earned but not yet received $300 at 30 June 2020.

iv. Motor Vehicle with the cost of $50000 and accumulated depreciation of $18000 as at 30 June 2019. On 31st March 2020, business

sold the vehicle for $23,435 VIP on credit.

v. Business use diminishing value method as depreciation at a rate of 20% per annum. Use same method and percentage if need to

depreciate part(iv) above.

Depreciate:

Motor Vehicle

Furniture & Fittings

vi. The depreciation for Building for 30 June 2020 was $10000 vii. Bad Debt to be written off $400 plus VAT at 30 June 2020.

viii. Allowance for Doubtful Debt to be adjusted to 4% of Accounts Receivable.

ix. Create Provision for long service leave for $900

x. Long Service Leave Taken $900

Required

a. Prepare General Journal Entry for Balance Day Adjustments including the sale for Motor Vehicle.

b. Prepare Closing Journal Entries.

c. Prepare a Worksheet, Income Statement and Balance Sheet

d. Prepare reversal entry at 1 July 2020