A motor vehicle which cost 12,000 was bought on credit from Trucks Ltd on 1 January 2013.

Question:

A motor vehicle which cost £12,000 was bought on credit from Trucks Ltd on 1 January 2013. Financial statements are prepared annually to 31 December and depreciation of vehicles is provided at 25 per cent per annum under the reducing balance method.

Required:
Prepare the motor vehicle account and the accumulated provision for depreciation on motor vehicles account for the first two years of the motor vehicle's working life.

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