A Limited started a business in January 2014. The company bought two lorries LA and LB at a
cost $1.15m per lorry on 2nd February 2014. The company added two motor vehicles CA and
CB on January 2015 at a cost of $550,000 and $1,020,000 respectively. On January 2017
one lorry (LB) was involved in an accident and it was written off; however the insurance paid the
company an amount equivalent to half the book value of the lorry. The company has a policy to
depreciate fixed assets at the rate of 10% per annum on straight line basis.
Required;
(i) Lorry and motor vehicle accounts as at 31st December 2018 at cost
(ii) Provision for depreciation account as 31st December 2018.
(iii)Disposal account (20 Marks)

Answer rating: 100% (QA)

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