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QUESTION 2
DISPOSAL OF FIXED ASSETS
(20)
REQUIRED
Answer the following questions from the information given below.All workings must be shown.
2.1
Calculate the depreciation for the current financial year on thevehicle that was sold.
(2)
2.2
Prepare the Fixed Asset Realisation account in the general ledgerto reflect the disposal of the vehicle on 31 August 2016.
(4)
2.3
Calculate the depreciation for the current financial year on thenew vehicle acquired.
(2)
2.4
Calculate the total cost price of the vehicles on 28 February2017.
(2)
2.5
Prepare the Accumulated Depreciation on Vehicles account in thegeneral ledger to reflect all the entries up to the end of thefinancial year.
(5)
2.6
Prepare the following note to the financial statements (amountcolumn for Vehicles only) as at 28 February 2017:
Property, plant and equipment
(5)
INFORMATION
Steers Enterprises owns a fleet of motor vehicles. The followingbalances appeared in the general ledger on 01 March 2016, thebeginning of the financial year:
Vehicles at cost
Accumulated depreciation on vehicles
R1 000 000
R400 000
Additional information
?
On 31 August 2016, a vehicle that cost R200 000 was sold for R32000 cash. The accumulated depreciation on this vehicle was R165 000on 01 March 2016.
?
On 01 December 2016 a new vehicle was purchased for R250 000cash.
?
Deprecation is provided for on vehicles at 20% per annum on thediminishing balance.