Salo Enterprise which makes up its accounts to 30 June each year, has two types of fixed assets namely Motor vehicles and Office equipment. Annual depreciation on Motor vehicles is calculated at the rate of 20% per annum on book value. Provision for depreciation is to be made on the basis of one month's ownership, one month's provision for depreciation. Depreciation on office equipment is calculated at the rate of 15 % per annum on cost based on assets in existence at the end of the year. On 30 June 1999, the following information has been extracted from the Balance Sheet of Salo Enterprise. Fixed assets Motor vehicles Office equipment Cost (RM) 280,000 143,000 Net Book Value (RM) 108,000 78,000 On 1 October 1999, the business bought a second hand car from a friend for RM28.000. The car was sent for repairs and the repair cost amounted to RM2,300. An air conditioning unit was also installed in the car at a cost of RM1000. The business bought two photocopying machines on 1 February 2000 at a cost of RM75,000 each. Due to minor damages occurred during its transportation from the distributor, the machines were repaired and the cost amounted to RM500. On the same date, a van was purchased at a cost of RM95,000 inclusive of RM5,000 for insurance and road tax. All payments were made by cheques. Required: For the year ended 30 June 2000:- i. Motor vehicles account and Office equipment account ii. Provision for depreciation account for both assets iii. Statement Financial Position (extract) as at that date.
Salo Enterprise which makes up its accounts to 30 June each year, has two types of fixed assets namely Motor vehicles and Office equipment. Annual depreciation on Motor vehicles is calculated at the rate of 20% per annum on book value. Provision for depreciation is to be made on the basis of one month's ownership, one month's provision for depreciation. Depreciation on office equipment is calculated at the rate of 15 % per annum on cost based on assets in existence at the end of the year. On 30 June 1999, the following information has been extracted from the Balance Sheet of Salo Enterprise. Fixed assets Motor vehicles Office equipment Cost (RM) 280,000 143,000 Net Book Value (RM) 108,000 78,000 On 1 October 1999, the business bought a second hand car from a friend for RM28.000. The car was sent for repairs and the repair cost amounted to RM2,300. An air conditioning unit was also installed in the car at a cost of RM1000. The business bought two photocopying machines on 1 February 2000 at a cost of RM75,000 each. Due to minor damages occurred during its transportation from the distributor, the machines were repaired and the cost amounted to RM500. On the same date, a van was purchased at a cost of RM95,000 inclusive of RM5,000 for insurance and road tax. All payments were made by cheques. Required: For the year ended 30 June 2000:- i. Motor vehicles account and Office equipment account ii. Provision for depreciation account for both assets iii. Statement Financial Position (extract) as at that date.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Salo Enterprise which makes up its accounts to 30 June each year, has two types of
fixed assets namely Motor vehicles and Office equipment. Annual depreciation on
Motor vehicles is calculated at the rate of 20% per annum on book value. Provision
for depreciation is to be made on the basis of one month's ownership, one month's
provision for depreciation.
Depreciation on office equipment is calculated at the rate of 15 % per annum on cost,
based on assets in existence at the end of the year. On 30 June 1999, the following
information has been extracted from the Balance Sheet of Salo Enterprise.
Fixed assets
Motor vehicles
Office equipment
Cost (RM)
280,000
143,000
Net Book Value (RM)
108,000
78,000
On 1 October 1999, the business bought a second hand car from a friend for
RM28.000. The car was sent for repairs and the repair cost amounted to RM2,300.
An air conditioning unit was also installed in the car at a cost of RM1000.
The business bought two photocopying machines on 1 February 2000 at a cost of
RM75,000 each. Due to minor damages occurred during its transportation from the
distributor, the machines were repaired and the cost amounted to RM500. On the
same date, a van was purchased at a cost of RM95,000 inclusive of RM5,000 for
insurance and road tax.
All payments were made by cheques.
Required:
For the year ended 30 June 2000:-
i. Motor vehicles account and Office equipment account
ii. Provision for depreciation account for both assets
iii. Statement Financial Position (extract) as at that date.
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