During the year ended 31 August 20.8, the following transactions took place pertaining to vehicles:

On 28 February 20.8, a new vehicle was bought for R231 000 cash.

On 1 June 20.8, an old vehicle, which had been bought on 1 December 20.5 for R280 000, was sold on credit for R157 500.

Sorvina Traders depreciates all their vehicles at a rate of 20% per annum according to the reducing balance method. Ignore VAT.

QUESTIONS

Calculate the accumulated depreciation on the vehicle sold up to the date of sale 

Calculate the depreciation on the new vehicle for the financial year ended 31 August 2018

Calculate the accumulated depreciation on the vehicle sold as at 1/9/2017

Calculate the total depreciation on the old remaining vehicles for the financial year ended 31 August 2018

Answer rating: 100% (QA)

SOLUTION To calculate the accumulated depreciation on the vehicle sold up to the date of sale we need to determine the depreciation expense that has b... View the full answer