Poluo Trading bought a vehicle during the 2019 financial year for R195 000 (excluding VAT). On...

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Poluo Trading bought a vehicle during the 2019 financial year for R195 000 (excluding VAT). On 31 January 2021, the business sold this vehicle for R108 305 cash. The financial year ends on 31 March each year. On 31 March 2020, the net book value (carrying value) of this vehicle was R145 800. It is the policy of the business to depreciate vehicles at 25% per annum, using the straight-line method. Required: Prepare the relevant journals to reflect the sale of this vehicle. Show ALL your calculations. Poluo Trading bought a vehicle during the 2019 financial year for R195 000 (excluding VAT). On 31 January 2021, the business sold this vehicle for R108 305 cash. The financial year ends on 31 March each year. On 31 March 2020, the net book value (carrying value) of this vehicle was R145 800. It is the policy of the business to depreciate vehicles at 25% per annum, using the straight-line method. Required: Prepare the relevant journals to reflect the sale of this vehicle. Show ALL your calculations.

Answer rating: 100% (QA)

The first step is to calculate the accumulated depreciation on the vehicle as of the date of sa... View the full answer