Final A/C - Year End Adjustments

For the disposal of motor vehicle,
the cost is $10,000;
Provision for Depreciation is $10,000 x 15% (straight-line method) x 2.75yrs (2 yrs and 9 mths) = $4,125;
Sales proceeds is $2,650;
Loss on disposal is $3,225 (Sales Proceeds $2,650 - N.B.V ($10,000 - $4,125)

Adjustment should be:
Dr. Provision for Depreciation - Motor Vehicles $4,125
Dr. Loss on Disposal $3,225
Dr. Bank/Cash $2,650
Cr. Motor Vehicles $10,000

(as there is no information about whether the depreciation has been provided or not, i deem it has not yet provided)

Depreciation for the year:
Office Furniture: ($26,200 - $9,600) x 20% = $3,320
Motor Vehicles: $10,000 x 15% x 0.75 (9mths) + $6,000 x 15% = $2,025

Adjustment should be:
Dr. Depreciation $5,345 ($3,320 + $2,025)
Cr. Provision for Depreciation - Motor Vehicles $2,025
Cr. Provision for Depreciation - Office Furniture $3,320

Base on the information avaiable:
P&L:
Deperciation $5,345
Loss on Disposal $3,225

B/S:
Motor Vehicles $6,000
Provision for Depreciation - Motor Vehicles $5,100
Office Furniture $26,200
Provision for Depreciation - Office Furnituer $12,920

No Trading account in this question.

Prov for Depn-MV
Depn for Yr.1996 = 16,000 x 15% x 9/12 = 1,800

1/4/93-31/3/94 Cost :16,000 Acc Depn: 2,400 NBV:13,600
1/4/94-31/3/95 Cost: 16,000 Acc Depn: 4,800 NBV:11,200
1/4/95-31/12/95 Cost: 16,000 Acc Depn: 6,600 NBV: 9,400

Prov for Den-OF
Yr.1 Cost: 26,200 Depnfor Yr.1: 5,240 NBV: 20,960
Yr.2 Cost: 20,960 Depn for Yr.2: 4,192 NBV: 16,768


Loss on disposal of MV=16,000-6,600-2,650=6,750

P&L A/C For the Yr Ended 31 March 1996

Depn for OF 4,192
Depn for MV 1,800
Loss on Disposal 6,750
Total 12,742


B/S As At 31 March 1996


OF Cost= 26,200 Prov for Depn= 9,432 NBV=16,768