oms financial year end is 31 December each year. On 1 January 2020 Tom bought...
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Accounting
oms financial year end is 31 December each year. On 1 January 2020 Tom bought a motor vehicle for RM22,000 cash with a useful life of 4 years and a residual value of RM2,000. The business uses the straight-line depreciation method throughout. In order to keep the motor vehicle running properly, Tom has performed regular maintenance and minor repairs each year since its acquisition. On 28 July 2022, minor repairs amounted to RM600 cash.
On 1 January 2023, Tonle decided to completely overhaul the motor vehicle. New parts at the cost of RM5,900 were fitted in, after which the motor vehicle is expected to have a useful life of 3 years and a revised residual value of RM2,900. The carrying value of the parts replaced was considered to be RM1,000. Required: Prepare general journal entries to record: a) the purchase of the motor vehicle on 1 January 2020. (2 marks) b) the minor repairs on the motor vehicle on 28 July 2022. (2 marks) c) the overhaul of the motor vehicle on 1 January 2023. (4 marks) d) the depreciation expense on 31 December 2023. (2 marks)
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