Question

Question 1 (Marks: 20) The following information was taken from the fixed assets register of Hogwarts Traders. The vehicles indicated below are the only vehicles owned by the sole trader. The company has a 31 December year end. Date Hogwarts Traders: Asset Register Hogwarts Traders: Vehicle 1 Date 1 May 2015 Purchased: Make and Toyota Hilux reg.: 2014 (FG765GP) Purchased Benji's Car Sales from: (Credit) Cost Price: 320 000.00 Current Accumulated depreciation depreciation 21 333.33 21 333.33 31 Dec 2015 31 Dec 29 866.67 51 200.00 2016 31 Dec 26 880.00 78 080.00 2017 31 Dec 24 192.00 102 272.00 Rate of Depreciation: 10% according to reducing balance 2018 method. Sold to: V. Limited. 31 Dec ? ? 2019 Cash Type of Sale: Date sold: Selling Price: 1 July 2019 250 000.00

Answer 1

Depreciation schedule for Hogwarts Traders:

Vehicle 1:
Date of purchase	1/5/2015
10% reducing balance method
Cost of vehicle(Toyota Hillux)	$      320,000.00
Less: dep for 2015	$         21,333.33
WDV as on 01.01.2016	$      298,666.67
Less:dep for 2016	$         29,866.67
WDV as on 01.01.2017	$      268,800.00
Less: dep for 2017	$         26,880.00
WDV as on 01.01.2018	$      241,920.00
Less: dep for 2018	$         24,192.00
WDV as on 01.01.2019	$      217,728.00
Less: sale proceeds on july 2019	$      250,000.00
Profit on sale	$         32,272.00
Accumulated dep as on 31.12.2019 for vehicle 1	$      102,272.00

Vehicle 2:
Date of purchase	1/8/2019
15% straight line method
Cost of the vehicle(Hyundai auto)	150000
Less: dep during the year 2019 for 5 months	9375.00
WDV as on 31.12.2019	140625.00

Asset disposal
For vehicle 1	$          250,000.00
Profit and loss account
on sale of vehicle 1	$             32,272.00