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On 2 July 2020 Sam Olsen Transport purchased a new delivery vehicle costing $95,000 (GST exclusive). The delivery is depreciated using the diminishing value depreciation method at 20% per year. On 30 June 2021 the delivery vehicle was considered unsuitable. The machine and cash of $30,000 was exchanged for a replacement delivery vehicle costing $120,000 (GST exclusive). Sam Olsen Transport is registered for GST. Required: Prepare the general journal entries to record the disposal of the delivery vehicle and the acquisition of the replacement delivery vehicle.

On 2 July 2020 Sam Olsen Transport purchased a new delivery vehicle costing $95,000 (GST exclusive). The delivery is depreciated using the diminishing value depreciation method at 20% per year. On 30 June 2021 the delivery vehicle was considered unsuitable. The machine and cash of $30,000 was exchanged for a replacement delivery vehicle costing $120,000 (GST exclusive). Sam Olsen Transport is registered for GST. Required: Prepare the general journal entries to record the disposal of the delivery vehicle and the acquisition of the replacement delivery vehicle.

FINANCIAL ACCOUNTING
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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Question 17 On 2 July 2020 Sam Olsen Transport purchased a new delivery vehicle costing $95,000 (GST exclusive). The delivery is depreciated using the diminishing value depreciation method at 20% per year. On 30 June 2021 the delivery vehicle was considered unsuitable. The machine and cash of $30,000 was exchanged for a replacement delivery vehicle costing $120,000 (GST exclusive). Sam Olsen Transport is registered for GST. Required: Prepare the general journal entries to record the disposal of the delivery vehicle and the acquisition of the replacement delivery vehicle.
Transcribed Image Text:Question 17 On 2 July 2020 Sam Olsen Transport purchased a new delivery vehicle costing $95,000 (GST exclusive). The delivery is depreciated using the diminishing value depreciation method at 20% per year. On 30 June 2021 the delivery vehicle was considered unsuitable. The machine and cash of $30,000 was exchanged for a replacement delivery vehicle costing $120,000 (GST exclusive). Sam Olsen Transport is registered for GST. Required: Prepare the general journal entries to record the disposal of the delivery vehicle and the acquisition of the replacement delivery vehicle.
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