Disposals depreciation FRA UNIT

gruffalo
gruffalo Registered Posts: 2 New contributor 🐸
Please can somebody help me with this question

You are employed by Knox Partners Limited as an accounting technician. During the financial year that ended on 31st December 2003, a car was sold for £2,500; this was paid for by cheque.

The following information is known.

• The vehicle originally cost £12,000 and was purchased in June 2000.
• Depreciation was charged at 20% straight line.
• The company’s policy is to charge full year depreciation in the year of acquisition and none in the year of disposal.

Task

1. Calculate the accumulated depreciation for the car at the time of disposal.

2. Complete the journal below required recording the financial transactions of the disposal.

3. Post the journal to the main ledgers.

4. Close and balance the ledger accounts, showing clearly whether a profit or loss occurred on the disposal.

Comments

Privacy Policy