ΛΥΚΕΙΟ ΑΚΡΟΠΟΛΗΣ

ΛΟΓΙΣΤΙΚΗ ΕΜΠΛΟΥΤΙΣΜΟΥ 2015-2016

PRACTICE QUESTIONS

DEPRECIATION AND DISPOSAL

Teacher: Despo Papaeti Georgiou

QUESTION1

Kokoris Ltdcommencedtradingon1January2011anddepreciatesitsfixedassetsatthefollowingrates:

Machinery15%-straightlinemethod.

Afullyear’sdepreciationisprovidedonanassetinthe yearofpurchasebutnone intheyearofdisposal.

KokorisLtdboughtfixedassetsasfollows:
Yearending / Machinery
€
31December2011 / 12,000
31December2012 / 10,000
31December2013 / 15,000

€6,000ofmachineryboughtduring2012wassoldin2013for€3,000.

REQUIRED

Prepare,foreachofthethreeyearsended31December2011,2012and2013,the:

(a) / ProvisionforDepreciationof MachineryAccount
(b) / DepreciationofMachineryAccount
(c) / Disposalof machineryAccount

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QUESTION2

KatasLtdcommencedtradingon1January2011anddepreciatesitsfixedassetsatthefollowingrates:

Motorvehicles25%-straight linemethod

KatasLtdboughtfixedassetsasfollows:
Yearending / Motorvehicles
€
31December2011 / 40,000
31December2012 / 36,000
31December2013 / -

Afullyear’sdepreciationisprovidedonanassetinthe yearofpurchasebutnone intheyearofdisposal

In2013Katas sold the vehiclepurchasedin2011for€22.000 by cheque.

REQUIRED

Prepare,foreachofthethreeyearsended31December2011,2012and2013,the:

(a) / ProvisionforDepreciationofMotorVehiclesAccount
(b) / DepreciationofMotorVehiclesAccount
(c) / DisposalofMotorVehiclesAccount

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QUESTION3

ThefinancialyearofAmanda asoletrader,endson31December.Thefollowingbalanceswere taken from the accounts at1 January 2015:

€

Motorvehicles atcost96,000

Amanda’sbankrecordsfortheyearended31December2005includedthefollowingpayments:

€

Additional motor vehicles72,000

Thefixedassetsownedbythebusinesson1January2015hadbeenpurchasedasfollows:

Amandaprovidesfordepreciationeachyearasfollows:

Motorvehicles:25%oncost

Depreciationisprovidedonanassetproportionately for the months of ownership.

Duringtheyearended31December2015,bankrecordsshowedthatthebusinesshadsoldamotor vehiclefor€20,000.Thisvehiclehadbeen purchasedin 2013 ata cost of€24,000.

REQUIRED

Preparethefollowingledgeraccountsin thebooksofAmandafortheyearended 31December2015:

(a) / MotorVehicles
(b) / ProvisionforDepreciationofMotorVehicles
(c) / Disposal of Motor Vehicles

QUESTION4

Peggyproducesherannualaccountswithayearendof31December.Shedepreciateshermotorvehiclesat25%ayearonthestraight linebasis.

Depreciationisprovidedonanassetproportionately for the months of ownership.

On31December2014,herbusinessownedthreemotorvehicles:MotorvehicleWwaspurchasedon1January2012for€32,000;

MotorvehicleX waspurchasedon31July2013for€36,000;andMotorvehicleYwaspurchasedon 30August2014for€38,000.

REQUIRED

(a)Calculateseparately,foreachofthemotorvehiclesW,XandY,theaccumulateddepreciationat31December2014.

On1May20015,PeggysoldmotorvehicleW for€12,400andreplacedit withmotorvehicleZ,whichshepurchasedwithachequefor€40,000.

REQUIRED

(b)Prepare,fortheyearended31December2015:

(i)TheMotorVehiclesCostAccount

(ii)TheProvisionforDepreciationAccount

(iii)TheDisposalAccount

Figuresmustberoundedtothenearestwhole€.

QUESTION5

On 1 January 2014 the balances in the books of Papas Ltd were €42.750 and €17.750 for Motor Vehicles account and Provision for Depreciation on Motor Vehicles account respectively.

On 1 April 2014 the company received a cheque for €1.600 for the sale of one Motor Vehicle which has been purchased on 1 November 2010 for €5.250

On 1 June 2015 the company purchased a new Motor Vehicle, by cheque, for €6.150

Depreciation is charged at 20% per annum on cost (straight line method) for each month of ownership.

REQUIRED:

Prepare for the Year ended 31 December 2014 and 2015 the following accounts:

a)Motor Vehicles account

b)Provision for Depreciation on Motor Vehicles account

c)Motor Vehicles Disposal account.

Note: All workings must be shown.

QUESTION6

Paphos Express Ltd depreciates its Lorries at the rate of 20% per annum, using the Straight Line method for each month of ownership. On 1 January 2014 the Lorries account showed a debit balance of €120.000. The Provision for Depreciation on Lorries account on the same day was €33.000.

A new Lorry was purchased on 30 April 2014 for €15.000 by cheque.

On 1 October 2014 the company received a cheque amounting to €3.000 for the sale of one Lorry which was purchased on 1 August 2011 for €9.000.

REQUIRED:

Prepare for the years ended 31 December 2014 and 2015:

a)The Lorries A/c.

b)The Provision for Depreciation on Lorries A/c.

c)The Lorries Disposal A/c.

Note: All your workings must be shown.

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MODELANSWERTOQUESTION1CONTINUED

(d)

ProvisionforDepreciationofMachineryAccount

2011
31Dec / Balancec/d / €
1,800 / 2011
31Dec / Depreciation / €
1,800
2012 / 1,800 / 2012 / 1,800
01Jan / Balanceb/d / 1,800
31Dec / Balancec/d / 5,100 / 31Dec / Depreciation / 3,300
2013 / 5,100 / 2013 / 5,100
31Dec / Disposal / 900 / 01Jan / Balanceb/d / 5,100
31Dec / Balancec/d / 8,850 / 31Dec / Depreciation / 4,650
9,750 / 2009 / 9,750
01Jan / Balanceb/d / 8,850
(e)
DepreciationofMachinery Account
2011 / € / 2011 / €
31Dec / PDM / 1,800 / 31Dec / Profitloss / 1,800
2012 / 1,800 / 2012 / 1,800
31Dec / PDM / 3,300 / 31Dec / Profitloss / 3,300
2013 / 3,300 / 2013 / 3,300
31Dec / PDM / 4,650 / 31Dec / Profitloss / 4,650
4,650 / 4,650
2013 / € / 2013 / €
31Dec / Machinery / 6,000 / 31Dec / PDM / 900
31Dec / Bank / 3,000
31Dec / Profitloss / 2,100
6,000 / 6,000

Disposal

(f)