please help with Part A and B.
Note that part A and B are interrelated.
The depreciation method:Straight line@20%
Date of purchase :31 October 2014. [Please refer to the following attachments]
(2 marks) 1. Define the terms: a. Depreciation (2 marks ) b. Residual or salvage value. 2. State the purpose for providing depreciation at the end of the year. ( 2 marks) 3. State the accounting principle or concept applied in recognising depreciation ( 2 marks ) into accounting books. 4. From the asset register given above, what is the useful life of the vehicle (1 mark ) mentioned in the register? 5. Distinguish between the depreciable amount using the Cost Price Method and the Diminishing Balance Method. ( 4 marks ) 6. Rewrite the asset register as drafted above, thereafter calculate and fill in all the missing figures. (10 marks) 7. What is the amount of carrying or book value of the vehicle in the financial position statement at the end of 31 December 2018? ( 1 mark ) 8. Prepare the following general ledger accounts, balance and close them off properly at the end of the 31 December 2019. (11 marks) a. Vehicle Account b. Accumulated Depreciation Account c. Depreciation Account d. Asset Disposal Account The Rationale: . The purpose of the question is to test the learner's understanding of why depreciation is provided into accounting books. . The asset register is mandatory in order to comply with the statutory requirements, which is equally important for small businesses. The learner should therefore be able to reflect on it. . The learner is required to apply the knowledge in the practical situation. Marking Guide: . The information from the asset register is recorded accurately into accounting books. . The general ledger accounts and entries are recorded accurately using the correct descriptions of columns.(syew Z [40 marks] ne year. (2 mar (stew Z ising depreciation PART B LIST OF BALANCES / TOTALS R Inventory (31/12/2019 ) 95 440 Land and buildings 220 000 the vehicle ( 2 marks) 46 690 Drawings Interest Received 5 100 (1 mark 210 000 ice Method and Capital Trade Receivables 26 700 118 000 ( 4 marks and fill in all 10% Long-Term Loan 25 000 Fixed Deposit 15 030 (10 marks financial Bank (CR) Rent received 74 110 10 130 ( 1 mark) Stationery 23 840 them off Trade Payables 310 000 Credit sales (11 marks) 73 5700 Cash sales Account Payable allowances 2 100% Account Receivable allowances 1 700 141 000 Purchases Donations Expenses 4 500 Rates and taxes 8 180 Interest on Loan 3 230 Bank charges 1 370 of why Salaries and wages 103 080 Railage on goods 1 300 earner ADDITIONAL INFORMATION: 1. Stationery on hand amounted to R 390. 2. The amount of R 2 890 for credit losses recovered were erroneously credited to Account Receivable Control. 3. The profits realized on asset disposal were omitted from the trial balance. 4. Closing inventory was R89 170. 5. Write off an amount of R1 700 as irrecoverable. 6. Create an allowance for credit losses of 10% on good trade receivables! 7. A replacement Vehicle was bought and delivered on the 21 December 2019. 8. The proceeds from the disposal of asset were omitted in the bank account. YOU ARE REQUIRED TO: 1. Prepare The Statement of Profit or Loss and Other Comprehensive Income for the year ending 31 December 2019. 2. Prepare The Statement of Financial Position for the year ending (16 marks) 31 December 2019. 3. Which principle in accounting allows the recognition of accounts receivable (18 marks)) and accounts payable transactions into accounting books? ( 2 marks) 4. State the accounting principle applied to determine the performance of an entity at the end of the financial period. (2 marks)NV N 6. Asset register Date of use Cost price Residual Depreciable value amount |Depreciation Carrying 250 000 242 000 value 01/1 1/2014 8 000 8 067 -203 938 241 933 31/12/2015 C . 31/12/2016 ~.^ . C . n . 31/12/2017 n . C . 31/12/2018 n . nor . n . 01/09/2019 C . c. C . 01/09/2019 N
