ACCOUNTING FOR FIXED ASSETS Baringo Transport Ltd. was incorporated on 1 June 2006 and on the same date bought its first bus KBC 099 S for Sh.9, 000,000. On 1 April 2007, the company bought its second bus KBS 120 T for Sh 12,000,000. On 1 June 2008, the company bought a third bus KBT 340 X for Sh.6,000,000.On 1 October 2008, Bus KBC 099 S was involved in an accident and was written off. The insurance compensation paid to Baringo Transport Ltd. was Sh.2,600,000. On 31 December 2009, Bus KBT 340 X broke down and was traded in with a new bus KB0 419 Y valued at Sh.8,000,000. Baringo Transport Ltd. paid cash amounting to Sh.5,400,000 for the bus. On 1 April 2010, a van KBP 890 B was purchased for Sh.4,800,000. Depreciation on motor vehicles is to be provided at the rate of 10% per annum on straight line basis. The policy of the company is to provide depreciation on a pro rata basis. Assume the year end for Baringo Transport Ltd. is 31 December and all busses were comprehensively insured. Required: i) Provide Motor vehicle account for the five years ended 31 Dec 2006, 2007, 2008, 2009 and 2010 Provision for depreciation account for the same years stated in (i) above Provide a Disposal of motor vehicle account ii) iii)
ACCOUNTING FOR FIXED ASSETS Baringo Transport Ltd. was incorporated on 1 June 2006 and on the same date bought its first bus KBC 099 S for Sh.9, 000,000. On 1 April 2007, the company bought its second bus KBS 120 T for Sh 12,000,000. On 1 June 2008, the company bought a third bus KBT 340 X for Sh.6,000,000.On 1 October 2008, Bus KBC 099 S was involved in an accident and was written off. The insurance compensation paid to Baringo Transport Ltd. was Sh.2,600,000. On 31 December 2009, Bus KBT 340 X broke down and was traded in with a new bus KB0 419 Y valued at Sh.8,000,000. Baringo Transport Ltd. paid cash amounting to Sh.5,400,000 for the bus. On 1 April 2010, a van KBP 890 B was purchased for Sh.4,800,000. Depreciation on motor vehicles is to be provided at the rate of 10% per annum on straight line basis. The policy of the company is to provide depreciation on a pro rata basis. Assume the year end for Baringo Transport Ltd. is 31 December and all busses were comprehensively insured. Required: i) Provide Motor vehicle account for the five years ended 31 Dec 2006, 2007, 2008, 2009 and 2010 Provision for depreciation account for the same years stated in (i) above Provide a Disposal of motor vehicle account ii) iii)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Transcribed Image Text:前。,豐
I Normal
I No Spac... Heading 1
Heading 2
A- aly , A -
Title
Paragraph
Styles
ACCOUNTING FOR FIXED ASSETS
Baringo Transport Ltd. was incorporated on 1 June 2006 and on the same date bought its first
bus KBC 099 S for Sh.9, 000,000. On 1 April 2007, the company bought its second bus KBS
120 T for Sh 12,000,000. On 1 June 2008, the company bought a third bus KBT 340 X for
Sh.6,000,000. On 1 October 2008, Bus KBC 099 S was involved in an accident and was written
off. The insurance compensation paid to Baringo Transport Ltd. was Sh.2,600,000. On 31
December 2009, Bus KBT 340 X broke down and was traded in with a new bus KBO 419 Y
valued at Sh.8,000,000. Baringo Transport Ltd. paid cash amounting to Sh.5,400,000 for the bus.
On 1 April 2010, a van KBP 890 B was purchased for Sh.4,800,000.
Depreciation on motor vehicles is to be provided at the rate of 10% per annum on straight line
basis. The policy of the company is to provide depreciation on a pro rata basis. Assume the year
end for Baringo Transport Ltd. is 31 December and all busses were comprehensively insured.
Required:
Provide Motor vehicle account for the five years ended 31 Dec 2006, 2007, 2008,
2009 and 2010
Provision for depreciation account for the same years stated in (i) above
Provide a Disposal of motor vehicle account
i)
ii)
iii)
hp
立
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education