Baako Ltd purchased motor vehicle as follows:
Date Quantity N
01/01/13 1 800,000
01/07/13 1 400,000
01/04/15 1 600,000
The company adopts a straight-line method of depreciation at the rate of 10% per annum from the date of purchase. A separate account is prepared for provision for depreciation. On 30h June 2014, the motor vehicle which was purchased on 1st July 2013 was sold for N6 240,000
You are required to prepare:
(a) Motor Vehicle Account for the year, 2013, 2014, and 2015.
(b) Provision for Depreciation on Motor Vehicle Account for the years 2013, 2014, and 2015.
(c) Motor Vehicle Disposal Account.
Explanation
BAAKO LIMITED
Motor vehicle account
| 2013 N | 2013 N |
| Jan. 1 Bank 800,000 Jan. 2 Bank 400,000 1,200,000 2014 Jan. 1 Balance c/d 1,200,000 1,200,000 2015 Jan 1 Balance b/d 800,000 Apr 1 Bank 600,000 1,400,000 2016 Jan. 1 Balance b/d 1,400,000 |
Dec. 31 Balance c/d 1,200,000 1,200,000 2014 Jun 30 motor vehicle disposal a/c 400,000 Dec. 31 Balance c/d 800,000 1,200,000 2015 Dec. 31 Balance c/d 1,400,000 1,400,000 |
Provision for depreciation on motor vehicle account
| 2013 N | 2013 N |
| Dec. 1 Balance b/d 100,000 100,000 2014 Jun. 30 motor veh disposal a/c 40,000 Dec. 31 Balance c/d 160,000 200,000 2015 Dec. 31 Balance c/d 285,000 285,000 |
Dec. 31 profit and loss a/c 100,000 100,000 2014 Jan. balance c/d 100,000 Dec.31 profit & loss a/c 100,000 200,000 2015 Jan 31 Balance c/d 160,000 Dec. 31 profit & loss b/d 125,000 285,000 2016 Jan 1 Balance c/d 285,000 |
Motor vehicle disposal account
| 2014 N | 2014 N |
| Jun. 30 motor vehicle a/c 400,000 400,000 |
Jun. 30 prov for dep. a/c 40,000 Jun. 30 bank a/c 240,000 Dec 31 profit & loss a/c 120,000 400,000 |