2 Simon formed a parcel delivery business on 1 July 2021. On 1 July 2021, he...

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2 Simon formed a parcel delivery business on 1 July 2021. On 1 July 2021, he purchased a delivery vehicle for $29000 from his business bank account. He decided to depreciate delivery vehicles on a monthly basis using the straight-line method. He estimated that the delivery vehicle would have a useful working life of four years and would have a residual value of $5000. On 1 November 2022, a new delivery vehicle was purchased at a cost of $44 000. The old delivery vehicle was part exchanged at a value of $16800. The balance was settled by a bank loan repayable over two years. He estimated that the new delivery vehicle would have a useful working life of five years and would have a residual value of $8000. (a) State two factors that cause the value of non-current assets to depreciate. 1 2 [2] (b) Prepare the following accounts for the year ended 30 June 2023. Use the space provided to show your workings. Date Date Workings: Details Delivery vehicles at cost $ Date Details Details Delivery vehicles provision for depreciation $ Date Details $ $ [8] (c) Calculate the profit or loss on disposal of the delivery vehicle sold on 1 November 2022. [2] (d) Explain why it may be more appropriate to depreciate motor vehicles using the reducing balance method rather than the straight-line method. ************** *********** ********** ***************** ***** ****** [3] [Total: 15] 2 Simon formed a parcel delivery business on 1 July 2021. On 1 July 2021, he purchased a delivery vehicle for $29000 from his business bank account. He decided to depreciate delivery vehicles on a monthly basis using the straight-line method. He estimated that the delivery vehicle would have a useful working life of four years and would have a residual value of $5000. On 1 November 2022, a new delivery vehicle was purchased at a cost of $44 000. The old delivery vehicle was part exchanged at a value of $16800. The balance was settled by a bank loan repayable over two years. He estimated that the new delivery vehicle would have a useful working life of five years and would have a residual value of $8000. (a) State two factors that cause the value of non-current assets to depreciate. 1 2 [2] (b) Prepare the following accounts for the year ended 30 June 2023. Use the space provided to show your workings. Date Date Workings: Details Delivery vehicles at cost $ Date Details Details Delivery vehicles provision for depreciation $ Date Details $ $ [8] (c) Calculate the profit or loss on disposal of the delivery vehicle sold on 1 November 2022. [2] (d) Explain why it may be more appropriate to depreciate motor vehicles using the reducing balance method rather than the straight-line method. ************** *********** ********** ***************** ***** ****** [3] [Total: 15]

Answer rating: 100% (QA)

The images youve provided appear to be from an accounting or bookkeeping exercise relating to the depreciation of delivery vehicles for a parcel delivery business Lets address the parts a b c and d of ... View the full answer