why Novelty Chemicals bought a Motor Vehicle for$110,000 on January 5, 2016. The estimated usefullife of the vehicle is ten years. The disposal valueis estimated at $10,000. Annual depreciation is onthe straight line method?

Answer 1

Novelty Chemicals bought a Motor Vehicle for

$110,000 on January 5, 2016. The estimated useful

life of the vehicle is ten years. The disposal value

is estimated at $10,000. Annual depreciation is on

the straight line method.

Required for years 2016, 2017 and 2018:

a) The Motor Vehicle A/c.

b) The Provision for depreciation A/c.

c) The Profit and Loss accounts extracts for annual

depreciation.

d) The Balance Sheet extracts for motor vehicle and its

related depreciation.

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