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Mavron Company owned the following vehicles as at 1 April 2017:

Motor Vehicle

AAT 101 DJH 202

Date Acquired

1 October 2014 1 April 2015

Cost

8,500 12,000

Estimated Residue Value

2,500 2,000

Estimated Life (Years)

5 8

Mavron Company policy is to provide at the end of each year financial year depreciation using the straight-line method applied on a month-by-month basis on all motor vehicles used during the year. During the financial year ended 31 March 2018 the following occurred:

1. (i) On 30 June 2017 AAT 101 was traded in and replaced by KGC 303. The trade-in allowance was $5,000. KGC 303 cost $15,000 and the balance due (after deducting the trade-inn allowance) was paid partly in cash and partly by a loan of $6,000 from Barclay Finance. KGC 303 is expected to have a residual value of $4,000 after an estimated economic life of five years.

2. (ii) The estimated remaining economic life of DJH 202 was reduced from six years to four years with no change in the estimated residual value.

Required:

1. (a) Show any Journal entries necessary to give effect to the above.

2. (b) Show the Journal entry to record depreciation on Motor Vehicles for the year ended

   31 March 2018.

3. (c) Reconstruct the Motor Vehicles Account and Provision for Depreciation Account for

   the year ended 31 March 2018

You are required to show your workings clearly.