edule of Depreciation of Motor Vehicles ‘Year ended | Motor Lory | Motor Lorry | Motor Lorry ] Motor Lomy | Transfer to 31 Dee No.1 No.2 No.3 No.4 P&Las Depreciation qos 7,600 2016 yo 17,600 2018 2.400 2019 z20 16.400 b). Show the Motor Lorry Disposal Account covering the necessary entries for the disposal of Motor Lorry No. 1 Motor Lorry Disposal Account 2018 RM 2018 May 30. Motor Lorry No 1 24,000 | May 30. Prov for depron MLno | Cash 6,000 P&L - Loss co) 24,000 24,000 At | January Year 5, Zaman Bhd. owned the following assets and had made provision for depreciation as follows: Cost price Provision for (RM) Depreciation (RM) Motor Vehicles (acquired within the previous 5 years) 83,200 24,230 Handling Equipment (acquired within the previous 4 18,600 9,600 years) In the year ended 31 December Year 5, a further motor vehicle costing RM6,500 and additional handling equipment costing RM1,800 were purchased. 129During the year ended 31 December Year 6, a motor vehicle originally purchased for RM5,S00 in Year 2 was sold for RM800, and handling equipment costing RM2,000 in ‘Year 3 was sold for RM600. Zamasiman’ basis of depreciation is as follows: Motor Vehicles ~ at 20% per annum by the straight line method Handling Equipment - at 25% per annum by the straight line method ‘A full year’s depreciation is provided in the year of acquisition of the asset. It is the company’s practice not to provide the usual depreciation in the year of disposal of any asset but to make the adjustment through the Disposal of Assets Account. Required: Show the following accounts for the two years ending 31 December Year 5 and 31 December Year 6 respectively: a). Motor Vehicles Account; b). Handling Equipment Account; ©). Provision for Depreciation of Motor Vehicles Account; 4). Provision for Depreciation of Handling Equipment Account; 1}. Disposal of Handling Equipment Account. Maziah Zin started her business on 1 July 2017. On the same day, she purchased a 50 year lease on premises for RM300,000 and machinery for RM90,000. Maziah decided that her financial year would end on 31 December each year. She also decided that depreciation at a rate of 10% per annum on the original cost of machinery should be written off together with an appropriate amount from the leasehold premises. On 1 October 2018, Maziah purchased an additional machine for RM70,000 and decided to depreciate it the same way as the first one, 130Required: Prepare machinery, leasehold premises and depreciation accounts from the start of the business until 31 December 2019. Nushirwan Arif Abdul Rauf Sdn, Bhd., a construction company in Manir, Kuala Terengganu commenced the business on 1 January 2015. During the five years to 31 December 2019, the company bought and sold motor vehicles for use in business as follows: Date of —_—_Registrationne. - Cost_-—-‘Date of disposal Disposal proceeds purchase (RM) 72 Jan 2015 ‘ATI M 15 May 2017 7 June 2017 TBATTL 85,000 25Feb2019—-TCBAT77. 120,000 The company charge depreciation of its motor vehicles at the rate of 20% per annum on cost with no residual value A fill year’s depreciation is provided for motor vehicles bought before 1 July but no depreciation is provided in the year of disposal Required: Prepare the following accounts, for the period of 1 January 2015 to 31 December 2019: (Using the straight line method of depreciation a). Motor Vehicles Account; b). Provision for Depreciation Account; ©). Motor Vehicles Disposal Account. ii). Using the reducing balance method of depreciation, a). Provision for Depreciation Account; b). Motor Vehicles Disposal Account. 131The financial year of Eden Group Bhd, ends on 31 December. On 1 January 2019, the following balances are available in the company's Ledger Accounts that relate to fixed assets: RM Fixed Assets as cost Plant and Machinery 340,000 Fixtures and Fittings 150,000 Motor Vehicles 120,000 Provision for Depreciation: Plant and Machinery 83,000 Fixtures and Fittings 40,650 Motor Vehicles 64,000 ‘The company has the following policies for the depreciation ii iv. arate of 10% per annum on straight-line method for plant and machinery. a rate of 25% per annum on straight-line method for motor vehicles. arate of 10% per annum on reducing balance method for fixtures and fitting, When fixed assets are purchased in the first half of a financial year, a full year’s depreciation is charged. When fixed assets are purchased in the second half of the financial year, a half year’s depreciation is charged No depreciation on assets in the year in which they are sold During 2019, the following transactions took place. Purchases (on credit): RM 15 February Plantand machinery 70,000 31 June Motor vehicles 50,000 13 October Fixtures and fittings 12,000 Sales (by cheque) 10 March A motor vehicle was sold for 17,000, The motor vehicle had been purchased on | July 2017 for 21,000. 132