DRILL QUESTIONS DEPN U2/ SA 1

Question 1
Charles Conqueror is the owner of Fine Furnishings.
Details below refer to its vehicle as at 31.12. 2011
Vehicle VC 121 Bought
1 july, 2009
Cost
$50000
Depreciation
20% p.a on cost

The vehicle was traded in on 1 Jan, 2012. The document below refers:
Spedy Auto
Nutix street
Inv 3761 I jan 2012
Vehicle # BCC 2351
Cost $60,000
Shelving $4,000
Insurance(12 mts) $1,200
Trade in ($10,000)
Deposit (chq # 12612) ($12,200)
Balance owing $43,000
Note: the new delivery van is expected to last 6 yrs and hv a residual value of
$10000.
Question 2
Charles Emperor the owner of Great Furnishings.
Details below refer to its vehicle as at 31.12. 2011
Truck VC 121 Bought
1 july, 2010
Cost
$60000
Depreciation
20% p.a on cost

The vehicle was traded in on 1 Apr, 2013. The document below refers:
Grand Saga Auto
Sport street
Inv 761-45 I Apr 2013
Vehicle # JCS a351
Cost $80,000
New storage $8,000
Insurance(12 mts) $2,400
Trade in ($15,000)
Deposit (chq # 12612) ($12,400)
Balance owing $63,000

Note: the new delivery van is expected to last 8 yrs and hv a residual value of $8000.

Answer Frame - Question 1
1. To determine the /l on sale/ trade in
a. Determine the accumulated depreciation from date of purchase of (old
veh) to date of sale







b. Determine the NBV




c. Compare NBV wt trade- in price




d. Determine the /l




2. To prepare the ledgers to record the disposal
a. [old] Vehicle at cost
(OLD) Vehicle account ACCOUNT
2012
1
st
Jan

Bal b/d



Sale of Vehicle



ACCUMULATED DEPRECIATION ON EQUIPMENT ACCOUNT
2012
1
st
Jan

Bal b/d






b. Sale of Vehicle account
SALE OF VEHICLE ACCOUNT





3. To record the disposal in the General Journal
DATE DETAILS DEBIT CREDIT













4. To record the purchase of new vehicle in the relevant journals
5. Cash payments Journal
Date
2012

Details Chq .
No.

Bank Disc
Rev
Creditor
control
Drawings Purchase Sundry



DATE DETAILS DEBIT CREDIT





NEW VEHICLE ACCOUNT





Answer Frame - Question 2
6. To determine the /l on sale/ trade in
e. Determine the accumulated depreciation from date of purchase of (old
truck) to date of sale







f. Determine the NBV




g. Compare NBV wt trade- in price




h. Determine the /l




7. To prepare the ledgers to record the disposal
c. [old] Truck at cost
(OLD) Truck account ACCOUNT
2013
1
st
Jan

Bal b/d



Sale of Truck



ACCUMULATED DEPRECIATION ON Truck ACCOUNT
2013
1
st
Jan

Bal b/d


1
st
Apr Depn



d. Sale of Vehicle account
SALE OF Truck ACCOUNT





8. To record the disposal in the General Journal
DATE DETAILS DEBIT CREDIT













9. To record the purchase of new Truck in the relevant journals
10. Cash payments Journal
Date
2012

Details Chq .
No.

Bank Disc
Rev
Creditor
control
Drawings Purchase Sundry



DATE DETAILS DEBIT CREDIT





NEW Truck ACCOUNT