[winnie158]

on 1 march 2012, Kobe Ltd pucharsed a new delivery van. Costs associated with the transaction were as follows

Invoice price $28 000
Special vehicle extras 1400
On-road costs 800
registration fees 500

the van will be used for 4 years and depreciated on a straight-line basrs. It has an estimated residual value of $12000. End of reporting period to Kobe Ltd is 30 June

Required
prepare journal entries

1. The van purchased for cash
2. Depreciation on the van for the year ended 30 June 2012
3. On 1 July 2013, a $1200 air-conditioning unit was added to the van. Although the van's estimated useful life was not effected, its estimated residual value was increase by $1000
4. On 1 September 2013, the van was given a full service and safety inspection at a cost of $800. Neither the useful life nor the residual value was affected
5. depreciation on the van for the year ended 30 June 2014
6. . Depreciation on the van for the year ended 30 June 2015
7. On 2 January 2016, the van received a $2600 major overhaul. The overhaul is expected to extend the van's useful life by 1 year, at which time the residual value is estimated to be $14000.
8. Depreciation on the van for the year ended 30 June 2017

[paraclete]

See Judy's response to a similar question what part of if your question is for homework click here do you not understand?

[winnie158]

See Judy's response to a similiar question what part of if your question is for homework click here do you not understand?

Huh? What do you mean see judy's response

[ArcSine]

Here.

[winnie158]

Here.

Will u willing to help me with this please??

[paraclete]

will u willing to help me with this please???

What do you specifically want to know?

You have to attempt the problem and tell us specifically what you want to know, we don't provide model answers

[winnie158]

What do you specifically want to know?

You have to attempt the problem and tell us specifically what you want to know, we don't provide model answers

1. 1/3/12 Van 30 700
Cash at Bank 30 700
(Purchased of van for cash)

2. 30/6/12 Depreciation expense 1558
Accumulated depreciation 1558
(Depreciation expense for year ended 30June 2012)

3. 1/7/13 Accumulated Depreciation 1558
Van
(To reverse the accumulated Depreciation) 1558
Van 1200
Cash 1200
(To record the cost of air-conditioning was added to the van)

Depreciation Expense- Van 7335
Accumulated Depreciation-Van 7335

This is the first three transactions that I have done... could you please check to see if I done it correct.. thanks

[paraclete]

I agree with the first two although my calculation of the depreciation is marginally different at $1543 you haven't shown the debits and credits so I'll assume you got those right

I don't know why you want to reverse the accumulated depreciation for year 1 when additions were made more than a year later, this doesn't affect depreciation in that year, that just sets up new criteria for the calculation of Depreciation at 30 June 2014

I have no idea what that last entry in your post relates to, certainly not the depreciation for the year 2014
Here is a clue examine carefully the dates and the financial years they relate to
Record each transaction separately

[winnie158]

I agree with the first two although my calculation of the depreciation is marginally different at $1543 you haven't shown the debits and credits so I'll assume you got those right

I don't know why you want to reverse the accumulated depreciation for year 1 when additions were made more than a year later, this doesn't affect depreciation in that year, that just sets up new criteria for the calculation of Depreciation at 30 June 2014

I have no idea what that last entry in your post relates to, certainly not the depreciation for the year 2014
here is a clue examine carefully the dates and the financial years they relate to

Lol thanks for your help

[winnie158]

lol thanks for ur help

Does anyone know how to record the transaction 5, 6,7, and 8??

[paraclete]

Here is a table showing the various calculations
Calc actual accum
year depn depn depn capital net
2012 1542.75 1543 30700 18700
2013 4675 4675 6218 30700 18700
2014 4725 4725 10943 31900 18900
2015 4725 4725 15668 31900 18900
2016 2562.5 2563 18231 31900 18900 NB; half year
2016 2050 2050 20281 34500 20500 NB; half year
2017 4100 219 20500

From this you can construct your journal entries
Note this approach to depreciation is irrational
to spend 2600 to extend the life of a vehicle for one year and increase the realisable value by 1000 is an unethical decision because the expenses are understated. The major repair should have been expensed, had this approach been taken depreciation would have reached residual value in 2016