6. One of the non-current assets - a vehicle - owned by Company 6 was sold during the year for $2,000. The sum was received in cash. Instead of banking this sum, the finance director used this sum as a deposit for the purchase of a new van, the full cost of which is $16,000. The cost and accumulated depreciation of the vehicle sold has already been correctly accounted for. Depreciation at 25% on a straight-line basis of $3,500 has been accounted for. Which of the following accounting entries is needed to correct this? Vehicles: At cost Depreciation Expense A B C D $ Dr: $2,000 Dr: $2,000 Dr: $1,500 No adjustment is needed Vehicles: Accumulated Depreciation $ Dr: $500 $ Dr: $500 Dr: $500 Vehicle: Disposal Account $ Cr: $2,000 Cr: $2,000 Dr: $2,000

6. One of the non-current assets - a vehicle - owned by Company 6 was sold during the year for $2,000. The sum was received in cash. Instead of banking this sum, the finance director used this sum as a deposit for the purchase of a new van, the full cost of which is $16,000. The cost and accumulated depreciation of the vehicle sold has already been correctly accounted for. Depreciation at 25% on a straight-line basis of $3,500 has been accounted for. Which of the following accounting entries is needed to correct this? Vehicles: At cost Depreciation Expense A B C D $ Dr: $2,000 Dr: $2,000 Dr: $1,500 No adjustment is needed Vehicles: Accumulated Depreciation $ Dr: $500 $ Dr: $500 Dr: $500 Vehicle: Disposal Account $ Cr: $2,000 Cr: $2,000 Dr: $2,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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