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.......................