Question

On 1 July 2019, Weiland Pty Ltd owned several farming vehicles that had cost a total of $155 000. Accumulated depreciation on these vehicles to 1 July 2019 amounted to $73 000. On 30 September 2019, Weiland Pty Ltd acquired a new delivery vehicle and traded in one vehicle that had cost $32 000 and which had accumulated depreciation of $14 400 up to 1 July 2019. The full price of the new vehicle was $29 500 and the trade-in value of the old vehicle was agreed at $18 400. Ignore GST. On 31 December 2019, an additional delivery vehicle was purchased for $34 000 cash. Depreciation is calculated at the rate of 20% p.a. on the diminishing balance.

1.Prepare the appropriate journal entries for the year ended 30 June 2020

Answer 1

Please give positive ratings so I can keep answering. It would help me a lot. Please comment if you have any query. Thanks!

Weiland Pty Ltd	Workings
Vehicle sold on 30 September 2019
Particulars	Amount $	Note
Cost as on 1st July 2019	32,000.00
Less: Accumulated Depreciation as on 1st July 2019	14,400.00	V
Book Value as on 1st July 2019	17,600.00	A
Depreciation rate	20%	B
Depreciation for 2019	3,520.00	C=A*B
Number of months from 1st July to 30th September	3.00	D
Depreciation for 3 months	880.00	E=C/12*D
Book Value as on 30th September 2019	16,720.00	F=A-E
Trade in Value	18,400.00	G
Profit on exchange	1,680.00	H=G-F
Accumulated Depreciation as on 30th September 2019	15,280.00	U=V+E

Vehicle purchased on 30 Sept 2019
Particulars	Amount $	Note
Cost of Machine	29,500.00	K
Less: Trade in Value	18,400.00
Cash paid	11,100.00	I
Depreciation rate	20%	See B
Depreciation for 2019	5,900.00	J=K*B
Number of months from 30th September to 30th June 2020	9.00	L
Depreciation for 9 months	4,425.00	M=J/12*L

Vehicle purchased on 31st Dec 2019
Particulars	Amount $	Note
Cost of Machine	34,000.00	N
Depreciation rate	20%	See B
Depreciation for 2019	6,800.00	O=N*B
Number of months from 31st Dec to 30th June 2020	6.00	P
Depreciation for 6 months	3,400.00	Q=O/12*P

Depreciation on opening book value of Vehicle
Particulars	Amount $	Note
Cost as on 1st July 2019	155,000.00
Less: Accumulated Depreciation as on 1st July 2019	73,000.00
Book Value as on 1st July 2019	82,000.00	R
Less: Book value of vehicle sold on 30 September 2019	17,600.00	See A
Depreciable value	64,400.00	S
Depreciation rate	20%	See B
Depreciation for 2019	12,880.00	T=S*B

Journal Entries
Date	Account	Debit $	Credit $
Sep. 30, 2019	Depreciation	880.00
Sep. 30, 2019	Accumulated Depreciation		880.00
(See calculation in Note E.)
Sep. 30, 2019	Vehicle purchased	29,500.00		(See Note K.)
Sep. 30, 2019	Accumulated Depreciation	15,280.00		(See calculation in Note U.)
Sep. 30, 2019	Vehicle sold		32,000.00	(See Note G.)
Sep. 30, 2019	Profit & Loss		1,680.00	(See calculation in Note H.)
Sep. 30, 2019	Cash		11,100.00	(See calculation in Note I.)
June. 30, 2020	Depreciation	20,705.00		(See calculation in Note W.)
June. 30, 2020	Accumulated Depreciation		20,705.00