Correct all the general entries for the scenario and explain the same

a) The company’s yearend is June 30th . But on March 1st two years ago, a new Motor vehicle was purchased for one of the sales managers in the Western division. The motor vehicle was acquired by taking a loan of $10,000 and trading in an old vehicle for $5,000. The remaining $30,000 was paid in cash. It is expected that the vehicle would have a useful life of 5 years since it would be used heavily to transport advertising materials to remote outlets accessible through rough roads. The maintenance expense for the current year of $3,000 was debited to the motor vehicles account. The credit posted to revenue in error. (Issue: Wrong entry to the General Ledger , part-year depreciation consideration , depreciation reporting)

Answer rating: 100% (QA)

Corrected General Ledger Entry Debit Motor Vehicle Expenses 10000 Credit Cash 10000 Debit Accumulate... View the full answer