Additional information: • A new building was purchased for cash on the 1st September 2020 for R1 000 000. • The vehicles balance at 1 March 2020 consists of
The following balances appeared in the books of Santiago Traders on 1 March 2020:
Land and Buildings
900 000
Vehicles
250 000
Machinery
200 000
?
Accumulated Depreciation on Machinery
?
Additional information:
• A new building was purchased for cash on the 1st September 2020 for R1 000 000.
• The vehicles balance at 1 March 2020 consists of two vehicles. Vehicle A with a cost price of R120 000 was sold on the 31st October 2020 on credit to Miss Smith for R60 000. The vehicle was purchased on the 31 May 2018. Vehicle B was purchased on the 1 March 2019.
• Purchased a new delivery vehicle (Vehicle C) for R345 000 on credit from N&N Motors on 1 December 2020
• All machinery was purchased on the 30 April 2017
• The depreciation policy on non-current assets are as follows:
o Vehicles: 20% on cost using the straight-line method and no residual value
o Machinery: 10% per annum using the diminishing balance method and no residual value
• IGNORE VAT
• Santiago Traders has a 28 February year end
Q.1.1
Journalise ALL the above transactions for the year ended 28 February 2021 in the General Journal including the year-end
Round off to the nearest Rand
Narrations are not required
(46)
Q.1.2
If Santiago Traders wants to sell Vehicle C on 31 May 2021 and make a profit on sale of the vehicle, how much should Santiago Traders sell the vehicle for? Provide calculations to support your answer
(4)
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