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Edexcel Depreciation Question

Mary Grey started a sole trader business on January 1, 2012 and purchased two motor vehicles for the business from B Lue Motor Traders using credit. She purchased a delivery van for £10,000 and a salesman's car for £15,000. Her depreciation policy states vehicles are depreciated by 25% per year on a straight line basis, with a full year's depreciation in the year of purchase and no depreciation in the year of sale. On July 1, 2014 she sold the delivery van for £2,500 cash. Accounts must be prepared for the years 2012-2014 for the Motor Vehicle, Provision for Depreciation, and Asset Disposal accounts.

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403 views

Edexcel Depreciation Question

Mary Grey started a sole trader business on January 1, 2012 and purchased two motor vehicles for the business from B Lue Motor Traders using credit. She purchased a delivery van for £10,000 and a salesman's car for £15,000. Her depreciation policy states vehicles are depreciated by 25% per year on a straight line basis, with a full year's depreciation in the year of purchase and no depreciation in the year of sale. On July 1, 2014 she sold the delivery van for £2,500 cash. Accounts must be prepared for the years 2012-2014 for the Motor Vehicle, Provision for Depreciation, and Asset Disposal accounts.

Uploaded by

Thura Nay Zin
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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15 Mary Grey, a sole trader, commenced business on 1 January 2012.

On that day she


purchased the following motor vehicles on credit from B Lue Motor Traders, for use in
the business.

Vehicle 1 Delivery van £10 000


Vehicle 2 Salesman’s car £15 000

The business’s depreciation policy stated that depreciation is provided at 25%


on a straight line basis on all motor vehicles owned at the year end. A full year’s
depreciation is charged in the year of purchase, but no depreciation is charged in the
year of sale.
On 1 July 2014 Mary decided to sell her delivery van to another trader for £2 500. This
amount was received in cash.
Prepare the following accounts for the years ended 31 December 2012 to 31
December 2014. Balance the accounts, where appropriate, and bring down the
balances on 1 January 2015.
(21)

You can use this space for your workings

*P44610A01920*
19
Turn over
Motor Vehicle Account
Date Narration £ Date Narration £

Provision for Depreciation Account


Date Narration £ Date Narration £

Asset Disposal Account


Date Narration £ Date Narration £

(Total for Question 15 = 21 marks)

TOTAL FOR SECTION B = 90 MARKS


TOTAL FOR PAPER = 100 MARKS

20
*P44610A02020*

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