Profit or loss on the disposal of the fixtures and fittings, Cost Accounting

This task involves the recording of non-current asset information in the general (nominal, main) ledger and other non-current asset matters.

You are assisting in preparing the accounts of a partnership business that is registered for VAT.

A new vehicle has been acquired on 31 December 2011 and the VAT on the invoice for this vehicle can be reclaimed.

Other information relating to this vehicle is as follows: the cost excluding VAT was £14,500 and this was paid from the partnership business bank account; the residual value is expected to be £3,000 excluding VAT; the depreciation policy for vehicles is 25% per annum on a straight line basis; and depreciation has already been entered into the accounts for the existing vehicles.

You are required to make the relevant entries to account for:

(a) The purchase of the new vehicle

The depreciation on the new vehicle      

(c)  The business has a policy for authorisation of new vehicles purchases. Indicate with a tick, the most suitable person to make the authorisation from the list below.                       

  • The accountant
  • A partner of the business
  • The purchase ledger clerk
  • The bank manager

 

(d) The business has sold fixtures and fittings which had original cost £2,000. The accumulated depreciation on this was £1,200 and the business received £645 for it.                         

          What is the profit or loss on the disposal of the fixtures and fittings? Ignore VAT. £.........155.......................

Posted Date: 2/16/2013 2:56:13 AM | Location : United States







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