Answered: Cleaning Truck The following details…

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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Cleaning Truck The following details relate to a street cleaning truck which was imported from Germany: $NZ Purchase price paid 30/06/05 128 000 Freight Germany - Wellington 7 000 New pollution free vacuum unit added 16 000 Insurance in transit 2 000 New Tyres 15/07/05 5 000 Insurance premium paid, Y/E 15/07/06 3 000 Insurance premium paid, Y/E 15/07/07 4 000 Required: i) The truck became operational on 30/06/05. Calculate the Cost Price of the truck. ii) Using 20% D V depreciation, show the relevant Balance Sheet extract for this truck as at 31/03/07. Sorting Machine Fruitful Ltd bought a fruit sorting machine for $63,500 on 1 February 2006. It has an estimated life of 10 years. The company is using diminishing value depreciation at 25%. Required: Show the relevant Income Statement & Balance Sheet extract for the year ended 30 September 2006 and 2007 (use whole dollars only).

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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