answer question a,c and d

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.

(c) Calculate the profit or loss on disposal of the delivery vehicle sold on 1 November 2022

(d) Explain why it may be more appropriate to depreciate motor vehicles using the reducing balance method rather than the straight-line method.

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 $44000. 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 (c) Calculate the profit or loss on disposal of the delivery vehicle sold on 1 November 2022. (d) Explain why it may be more appropriate to depreciate motor vehicles using the reducing balance method rather than the straight-line method