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Prepare the journal entry required to correct the depreciation charge. A narrative is required. Sally Journal date details $ $ Workings: Sally has now discovered the following further errors in her accounting records. 1 2 3 4 Rent expense paid of $620 had been debited to the rental income account. The sales journal and...
See it on the paper →one reason why the company used the straight-line method for charging depreciation on shop fixtures and fittings.
See it on the paper →Calculate the depreciation charge for each year of the recovery vehicle’s working life, assuming Ahmed replaces the recovery vehicle on 31 August 2025. Show your workings. $
See it on the paper →State one advantage and one disadvantage of the reducing balance method of depreciation. Advantage On 1 February 2025, a local dealer offered to buy the recovery vehicle from Ahmed for $35 000 cash. REQUIRED Disadvantage
See it on the paper →Show your workings, and state whether it would have been a ‘profit’ or ‘loss’. (c) Calculate the profit or loss on disposal if Ahmed had sold his recovery vehicle to the local dealer on 1 February 2025.
See it on the paper →Prepare Ahmed’s motor vehicles account for the year ended 30 April 2025 if Ahmed had sold his recovery vehicle to the local dealer on 1 February 2025. Ahmed Motor vehicles account Date Details $ Date Details $
See it on the paper →Prepare Ahmed’s disposal of motor vehicles account for the year ended 30 April 2025 if Ahmed had sold his recovery vehicle to the local dealer on 1 February 2025. Ahmed Disposal of motor vehicles account Date Details $ Date Details $ Ahmed sold his recovery vehicle. Since the sale, he has been hiring a recovery vehicle...
See it on the paper →Advise Ahmed whether he should buy this new recovery vehicle. Justify your answer by providing advantages and disadvantages of buying the new recovery vehicle.
See it on the paper →Calculate the accumulated depreciation on the delivery vehicle which Mo sold on 31 March 2024.
See it on the paper →Prepare the disposal account for the sale of the delivery vehicle on 31 March 2024. Mo Disposal of vehicles account Date Details $ Date Details $ Mo purchased a new delivery vehicle on 1 April 2024. The purchase price is made up as follows: Cost of vehicle Petrol Insurance (6 months) Number (licence) plates $ 12 500 60...
See it on the paper →Calculate the amount which Mo will record in his delivery vehicle account for this transaction on 1 April 2024. Mo is considering opening a shop to sell his farm produce. He hopes that customers will come to his farm and buy from the shop so that he will not need to deliver to them. He will use an existing farm buildin...
See it on the paper →Prepare the provision for depreciation of motor vehicles account for the year ended 31 March 2025. Balance the account and bring down the balance at 1 April 2025. Jasmine Provision for depreciation of motor vehicles account Date Details $ Date Details $
See it on the paper →Calculate the depreciation charge for the year ended 31 December 2023.
See it on the paper →Delivery vehicles account Date Details $ Date Details $ Provision for depreciation of delivery vehicles account Date Details $ Date Details $ Balance the accounts and bring down the balances on 1 January 2024. (b) Prepare the company’s ledger accounts for the delivery vehicles, provision for depreciation and disposal o...
See it on the paper →Advise the owner of the company whether he should pursue this course of action. Justify your answer by providing two advantages and two disadvantages of changing the method of depreciation to the reducing balance method.
See it on the paper →Complete the following table by placing a tick (3) in the appropriate column to indicate the most suitable method of depreciation for each of the non-current assets. Non-current asset Straight-line Revaluation No depreciation Land Fixtures & fittings Loose tools
See it on the paper →Prepare the disposal of office equipment account. Ahmed Disposal of office equipment account Date Details $ Date Details $
See it on the paper →Calculate the accumulated depreciation on the vehicle at 30 April 2024.
See it on the paper →Prepare the disposal of motor vehicles account. Lottie Disposal of motor vehicles account Date Details $ Date Details $ Lottie sells 3 different types of goods. Her inventory at 30 April 2024 is as follows. Type Number of units Purchase price per unit $ Net realisable value per unit $ Carriage inwards per unit $ A 60 1...
See it on the paper →Calculate the gain or loss on disposal of the vehicle. The balances on Stalla’s ledger accounts at 1 January 2022 included the following. $ Motor vehicles 48 000 Provision for depreciation on motor vehicles 21 000
See it on the paper →The profit or loss on disposal of a non-current asset had to be calculated. There were many correct answers. Those candidates who gave an incorrect answer which was not supported by calculations automatically forfeited any marks they may have earned for the calculation. Two years’ depreciation should have been deducted from the cost price to get the net book value. A common error was to use deprec...
— Examiner report, May/June 2023, 7707/21 Q2(b) (Cambridge)
Candidates were required to prepare a motor vehicles account. Many candidates found this question challenging. The asset account is maintained at cost price and the provision for depreciation is not included in that account. The cost of the asset disposed of should have been credited to the account.
— Examiner report, May/June 2023, 7707/21 Q2(c)(i) (Cambridge)
A provision for depreciation of motor vehicles account had to be prepared. This again proved to be challenging for many candidates. Common errors were: • Inclusion of the cost price of the asset. • Omission of the deprecation on the asset disposed of (calculated in 2(b)). • Incorrect calculation of the depreciation for the year.
— Examiner report, May/June 2023, 7707/21 Q2(c)(ii) (Cambridge)
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