Rancakk Berdozza Berhad intends to purchase a delivery lorry at a cost of RM100,000in January 2022.Before placing the lorry in service, Rancakk Berdozza Berhad spent RM3,000 painting it, RM600 replacing tires, and RM10,400 overhauling the engine. The lorry would remain in service for 10 year sand have a residual value of RM12,000. Straight-line method is used to depreciate the lorry over its useful life.
Rancakk Berdozza Berhad also similarly planning to acquire a van for its business in the same month, with a purchase price of RM75,000. An additional RM1,200 was incurred for insurance and RM1,300 for sales tax. The van has a useful life of 5 years and would be sold at the end of its useful life at RM5,000. Reducing-balance method depreciation is used to depreciate the van over its useful life.

Required:
a) Determine the costs for Rancakk Berdozza Berhad new vehicles.
b) Prepare two separate depreciation schedules for each vehicle from the year 2022 until 2026, showing the costs, depreciation expenses, accumulated depreciations and book values of the vehicles.

Answer rating: 100% (QA)

a Costs for Rancakk Berdozza Berhad new vehicles Lorry RM100000 purchase price RM3000 painting RM600 ... View the full answer