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QUESTION 10 The following balances were recorded in the books of Sofea on 1 March 2015. Motor vehicles account (at cost) MAY 2016 P21 & 22 Q2 (a to d) $ 50 000 Motor vehicles Provision for depreciation account 18 400 1 On 31 May 2015 a motor vehicle costing $16 000 and with an accumulated depreciation of $7000 was sold for $8 400. 2 On 30 June 2015 a motor vehicle costing $20 000 was purchased on credit. 3 The depreciation policy of Sofea is as follows: Motor vehicles are depreciated at the rate of 25% per annum using the diminishing (reducing) balance method. A full year's depreciation is charged in the year of purchase. No depreciation is charged in the year of sale. REQUIRED

QUESTION 10 The following balances were recorded in the books of Sofea on 1 March 2015. Motor vehicles account (at cost) MAY 2016 P21 & 22 Q2 (a to d) $ 50 000 Motor vehicles Provision for depreciation account 18 400 1 On 31 May 2015 a motor vehicle costing $16 000 and with an accumulated depreciation of $7000 was sold for $8 400. 2 On 30 June 2015 a motor vehicle costing $20 000 was purchased on credit. 3 The depreciation policy of Sofea is as follows: Motor vehicles are depreciated at the rate of 25% per annum using the diminishing (reducing) balance method. A full year's depreciation is charged in the year of purchase. No depreciation is charged in the year of sale. REQUIRED

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
Section: Chapter Questions
Problem 6MCQ: Refer to the information for Cox Inc. above. What amount would Cox record as depreciation expense...
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QUESTION 10 The following balances were recorded in the books of Sofea on 1 March 2015. Motor vehicles account (at cost) MAY 2016 P21 & 22 Q2 (a to d) $ 50 000 Motor vehicles Provision for depreciation account 18 400 1 On 31 May 2015 a motor vehicle costing $16 000 and with an accumulated depreciation of $7000 was sold for $8 400. 2 On 30 June 2015 a motor vehicle costing $20 000 was purchased on credit. 3 The depreciation policy of Sofea is as follows: Motor vehicles are depreciated at the rate of 25% per annum using the diminishing (reducing) balance method. A full year's depreciation is charged in the year of purchase. No depreciation is charged in the year of sale. REQUIRED
Transcribed Image Text:QUESTION 10 The following balances were recorded in the books of Sofea on 1 March 2015. Motor vehicles account (at cost) MAY 2016 P21 & 22 Q2 (a to d) $ 50 000 Motor vehicles Provision for depreciation account 18 400 1 On 31 May 2015 a motor vehicle costing $16 000 and with an accumulated depreciation of $7000 was sold for $8 400. 2 On 30 June 2015 a motor vehicle costing $20 000 was purchased on credit. 3 The depreciation policy of Sofea is as follows: Motor vehicles are depreciated at the rate of 25% per annum using the diminishing (reducing) balance method. A full year's depreciation is charged in the year of purchase. No depreciation is charged in the year of sale. REQUIRED
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