1. Explain the differences between straight line method and reducing balance method of depreciation. To gain full marks, you must explain at least two differences and give examples.

1. The following transactions relate to a newly started Harvey Ltd in Grantham for the month of May 2023.
2. Analyse the following transactions and show their impact on the accounting equation. Use the spreadsheet provided below to record your answers.

DayTransactions1Owner deposited cash into the business bank80,0002Bought a delivery van for cash20,0003Purchased stationery for office use on credit8004Paid monthly building rent1,2506Used the company debit card to buy diesel for the van at a local service station 1508Purchased goods for cash6,7509Purchased goods on credit4,55010Received a bill for electricity and gas used32012Sold goods for cash12,55014Sold good on credit8,55015Paid the electricity and gas bill32027Made a part payment for goods bought on credit 4,25028Owner takes cash for his personal use3,25029Paid monthly wages to staff 1,25030Depreciation of van has been estimated at10031Cost of the inventory of goods in the store at the end of the month1,300

Use this spreadsheet to record answers.

DayCash and BankReceivablesInventory of goodsVehiclesTrade PayablesCapital / DrawingsRevenue +Expenses -

1. How much is profit earned by Harvey Ltd during the month?

1. How much is the amount of ownership interest at the end of month?

1. What is the amount of current assets at the end of month?

What is the net book value (NBV) of the delivery van at the end of month?