Question

Florence prepares the company year end accounts on 31st December annually. The following transactions occurred during the year 2017: Date of Assets Useful life Disposal Cost (RM) purchase (year) Value (RM) 1 July 2015 Motor Vehicles 10 0 100,500 1 Jan 2015 Equipment 142,000 1 Jan 2015 Labelling Machine 65,000 The company uses: i) straight line method of depreciation for motor vehicles and equipment. ii) reducing balance method for labelling machine with the rate 10% iii) The company implement month to month basis of depreciation. (Depreciation is calculated based on number of month the assets exist in the business) Additional information: • Motor vehicles was sold on 31 December 2017 at selling price RM75,000 On 31 December 2017, equipment was replaced with the new one. The exchange value is RM108,000. The company need to add RM25,000 for the new equipment. All payments and receipts for the above transactions were made through cheque/bank. You are required to prepare: a) Depreciation schedule for motor vehicles, equipment and labelling machine from year of purchase until 31 December 2017. (10 m) b) Journalize the disposal transaction for motor vehicles and equipment for the year 2017, (6 m) c) Prepare the non current assets section in statement of financial position (4 m)

Answer 1

In the books of Florence

a) Depreciation Schedule for MOTOR VEHICLE for the period 1st July 2015 to 31st December 2017

NOTE:
Page No. for Equipment ate Depreciation Schedule EQUIPMENT Particulars Amour Date Date Particulaes Amout 1001.15 To Bank Alc. 142000 31.12.15 By PEIL. y e nglad -NDV methol (142000-0 Depreciation schedule for Equipment period. 1. Jan 2015 to 31. December 2014 for the Date Particulars amout Date I Parliculaes Amout. 1.01.15 To Bank Alc 1.01.16 To Bal bid 142000 31.12.15 By PEIL. 17750 (142000-0 X2 8 12 31.12.15 By Balold 124250- 142000 142000 124250 31.12.16 By PEIL. 750. (142000-0x12 8. 12 31.12.16. By Balold. 106500 124250 124250 106500 31.12.17 By PEIL. 17750 25000 CC142000-9x12 31.12.17 By Bank (Baltig) ( 5750. 1 31.12.17 31-12-17. By Bal 6 d. 10 800 108000 131500 1 13 1500 1080oo. 1.01.17 To Balbid To Banko added). 1.01.18 To Balbed,

Page No. Date (a) In the Books of Florence Depreciation schedule for MOTOR VEHICLE for the penod. 1 July 2015 to 31. Dec 2017 L al Particulars MOTOR VEHICLE Amount Date Date Particulars Amout - 11.07.15 To Bank 5025 100 500 31.12.15 By PEIL 100 500 -0)6 10 12 31.12.15 By Bal old 100500 9 5475 100500 01.01.2016 To Bal bed 95475 31.12.16 By Pell e 10050 (100500-0412 10 31.12.16 By Bal ed. 85425. 95475 - 95475 01.01.2014 To Bal bld. 85425 10050 31.12.17 By PEIL (100500-0 12 10 /12 31.12.17 By Bank I (sale) 31.12.17 By PEIL I I loss on sale 75000 375 (Bal fig). 85425 85425. Note : SLM = cost-salvage

Page No. Date Date 101.15 schedule Depreciation for Date H labelling machine for the period 1. Jan. 2015 to 31st December 2017. Don using Reducing Balance Method Particulars I Amouit Date I Particulaes Amort. TO Bank 65000 31.12-15 By PELA/C 6500 - 65000 X 10):12) - 31.12.15 By Bal qd 58500 65000 65000 To Bal bid 58500 31.12.16 By PEIL 5850 12 1.1.16 58500x/0:/X13) 12 1.1.17 To Balb/d 31.12.16 10 52650 58500 58500 52650 31.12-167 By PELL 5265 (52650x toy X 12 12 - 52650 31.12.17 By Balold 47385 52650 1.1.18 To Balbld 47385.

Page No. Date (5) Journalization of disposal transaction (a) Bank Alco o r u 75000. PELL ALC Llossonsale) n. 375 I To motor vehicle 75375 (Being motor vehicle disposed off) (6) Bank Alc/ Bal fig) Dr 83000 PEIL A/C Closs on sale) 5750 I To Equipment 88750 (being Equipment disposed off in enchange of new equipment). 10 of Statement of financial position Non-Cussent Assets. Centract). Liabilities C Assets.do Non-cussent assets ! Equipment 108000 • Cabelling Machine 47385 155385

1.Straight line method formula : Cost- Salvage/ life in years.

2. reducing balance formula: cost* % *period.