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.
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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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