Q1 Calculation of Depreciation under following methods a).

Q1 Calculation of Depreciation under following methods
a) Straight Line Method
Cost of Truck 65000
Residual Value 5000
Depreciable Value 60000
Life of Truck 6
Depreciation for each year 1000
b) Sum of Digits Method
Year Remaining Estimate Life SYD Annual Depreciation
1 6 0.285714286 17143
2 5 0.238095238 14286
3 4 0.19047619 11429
4 3 0.142857143 8571
5 2 0.095238095 5714
6 1 0.047619048 2857
21 60000
c) Declining Balance Method
Calculation of Depreciation Rate
S Salvage value
C Cost of assets

Year Opening Rate Depreciation Closing
1 65000 27 17420 47580
2 47580 27 12751 34829
3 34829 27 9334 25495
4 25495 27 6833 18662
5 18662 27 5001 13661
6 13661 27 3661 10000
d) Units of Production Methods
Year Kilometers Depreciation
2012 28000 6829
2013 34000 8293
2014 42000 10244
2015 55000 13415
2016 68000 16585
2017 19000 4634
246000 60000
Q2 Journal Entries in the books of Petersen LTD.
1 Revaluation of Residential Land & Factory Land
Debit Residential Land 100000
Debit Revaluation Reserve 100000
Credit Factory Land 200000

2 Revaluation of Building
Debit Building 100000
Credit Revaluation Reserve 100000
Classifies Factory Land and residential Land as different class
Debit Residential Land 100000
Credit Revaluation Reserve 100000
Debit Revaluation Reserve 200000
Credit Factory Land 200000
Q3 Leases
a)
Lease Rent per year 100000
Total years 4
Total Lease rent 400000
Add: Unguaranteed Residual Value 50000
Gross Investment 450000
Present value of $1 for 4 years 3.17
Total Present value of Lease Rent 317000
Present value of Unguaranteed Residual Value on 4th
year 34000
Present Value of Truck 351000
Year Opening Interest Principal Closing
01/07/2019 351,000 - - 351,000
30/06/2020 351,000 35,100 64,900 286,100
30/06/2021 286,100 28,610 71,390 214,710
30/06/2022 214,710 21,471 78,529 136,181
30/06/2023 136,181 13,618 86,382 49,799

b) Journal Entries in the Books of City Vans Ltd.
01/07/201
9 Debit Deliveries Ltd 350143
01/07/201
9 Credit Lease Sales 350143
30/06/202
0 Debit Deliveries Ltd 35014
30/06/202
0 Credit
Finance
Income 35014
30/06/202
0 Debit Bank 100000
30/06/202
0 Credit Deliveries Ltd 100000
c) Journal Entries in the books of Deliveries Ltd.
01/07/201
9 Debit Truck 351000
01/07/201
9 Credit City Vans Ltd 35100
30/06/202
0 Debit
Finance
Charges 35100
30/06/202
0 Credit City Vans Ltd 35100
30/06/202
0 Debit City Vans Ltd 100000
30/06/202
0 Credit Bank 100000
d) Journal Entry for Purchase of truck
30/06/202
3 Debit City Vans Ltd 50000
30/06/202
3 Credit Bank 50000
Q4 In the books of Lightning Bolt Ltd.
a)

Annual leave cost for Lightning Bolt 100000*4/52*1.175
Cost 9038
per week cost 174
48 Salary Cost 92308
4 Annual Week Cost 9038
Total Salary with annual leave 101346
Recognition of Annual leave cost in weeks
Debit Annual Leave Expenses 174
Credi
t Provisions for Annual Leave 174
b)
If lopez takes two weeks leave.
Debit Provisions for Annual leave 4519
Credit Tax Payable 1200
Credit Bank 3319