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You are employed as the junior accountant at Linksfield Wholesalers, a registered VAT vendor. Thecurrent financial year end of the business is 3 1 December
You are employed as the junior accountant at Linksfield Wholesalers, a registered VAT vendor. Thecurrent financial year end of the business is December You have extracted the followinginformation relating to one of the businesss assets below:Date of purchaseAsset Cost of asset includingVATPurchased from Ford Sedan passengervehicleR Sandton FordDealershipVehicles are depreciated at pa on the diminishing balance method.The above passenger vehicle was sold on October for R inclusive of VAT.Management of Linksfield Wholesalers decided to replace the passenger vehicle with a deliveryvehicle and purchased a new Isuzu van on December for R inclusive of VAT. LinksfieldWholesalers paid cash for the new vehicle.The following balances were extracted from the trial balance as at December : Vehicles: R Accumulated depreciation: Vehicles RNote: Show all the workings.Required:Q Calculate the net carrying value of the passenger vehicle at the time of sale October Set out your workings in table format as below and state the net carrying valueclearly at the end:YearPeriod CalculationworkingsDepreciation AccumulateddepreciationQ Calculate the Profit or Loss on disposal of the passenger vehicle. Indicate clearlywhether it is a profit or loss on disposal.Q Prepare the following general ledger accounts for the current financial year ending December : Vehicles marks Accumulated depreciation on vehicles marks
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