A motor vehicle which cost £12,000 was bought on credit from Trucks Ltd on 1 January 20X6. Financial statements are prepared annually to 31 December and depreciation of vehicles is provided at 25 per cent per annum under the reducing balance method. Required: Prepare the journal entries, the motor vehicle account, and the accumulated provision for depreciation on motor vehicles account for the first two years of the motor vehicle’s working life.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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A motor vehicle which cost £12,000 was bought on credit from Trucks Ltd on 1 January 20X6. Financial statements are prepared annually to 31 December and depreciation of vehicles is provided at 25 per cent per annum under the reducing balance method. Required: Prepare the journal entries, the motor vehicle account, and the accumulated provision for depreciation on motor vehicles account for the first two years of the motor vehicle’s working life.
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