Q.4 A vehicle was purchased for Rs, 100,000 on 1st January 2019. During 2019 (the current...

 

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Q.4 A vehicle was purchased for Rs, 100,000 on 1st January 2019. During 2019 (the current year) depreciation of Rs. 10,000 was debited to the vehicles: cost account instead of being debited to the depreciation account. The depreciation was, however, correctly created to the vehicles: accumulated depreciation account. This error is discovered in 2019. The tax authorities granted wear and tear of Rs. 4,000 in 2019 based on the correct cost. The normal tax rate is 30%. You are required to journalized the correction of this error and disclose (where relevant). Q.4 A vehicle was purchased for Rs, 100,000 on 1st January 2019. During 2019 (the current year) depreciation of Rs. 10,000 was debited to the vehicles: cost account instead of being debited to the depreciation account. The depreciation was, however, correctly created to the vehicles: accumulated depreciation account. This error is discovered in 2019. The tax authorities granted wear and tear of Rs. 4,000 in 2019 based on the correct cost. The normal tax rate is 30%. You are required to journalized the correction of this error and disclose (where relevant).

Answer rating: 100% (QA)

To correct the error and journalize the necessary entries we need to adjust the depreciation expense ... View the full answer