Grade 11 ACCOUNTING 16 February 2022

Asset disposal Marks: 70

You are required to:

 Complete the accounts and calculations on the pre-printed paper provided.
 DO NOT BALANCE OR CLOSE OF THE ACCOUNTS
 Show all calculations as indicated in the calculation blocks
(Show all your working so that method marks can be awarded)

 Show all calculations to the nearest rand (if necessary)

 The financial year of the business ends on 28 February 2021.
 Depreciation is calculated as follows
 On equipment @ 12 ½% p.a. on carrying value
 On vehicles @ 15% p.a. on cost price.

The following balances appeared amongst others in the books of Clifton Stores on
1 March 2020(the beginning of the financial year).

Vehicles R680 000

Accumulated depreciation on Vehicles R420 000
Equipment R430 000
Accumulated depreciation on equipment R197 200

Information
2020
Apr 30 Bought a new vehicle for R440 000 on credit from SMG Motors.

Jul 1 Sold equipment which was originally purchased for R160 000, on 1 June
2019, on credit for R120 000

Nov 30 Traded in a vehicle with a cost price of R400 000 and an accumulated
depreciation on 1 March 2020 of R320 000, for R80 000 on a new delivery
vehicle with a cost price of R260 000.
2021
Jan 31 Bought new equipment for R196 000 and paid by EFT.

Feb 28 Provide for depreciation on both equipment and vehicles.

Name:_____________________________________

Vehicles B3

Accumulated Depreciation on Equipment B4

Asset Disposal N10

Depreciation N11
Calculate the depreciation on Vehicles sold on 30 November 2020

 Calculate the depreciation on the old remaining vehicles at the end of the financial year

 Calculate the depreciation on the vehicles purchased on 30 April 2020 at the end of the financial year

 Calculate the depreciation on the vehicles purchased on 30 November at the end of the financial year

Calculate the depreciation on the Equipment sold

  Calculate the depreciation on remaining equipment on 28 February 2021

 Calculate the depreciation on the equipment purchased on 31 January 2021 at the end of the year

Use this space to show your 5 steps of Asset Disposal.

Name:______MEMO___________________________

Vehicles B3
2020 1 Balance b/d 680 000 2020 30 Asset Disposal GJ 400 000
Mar Nov
Apr 30 Creditors Control CJ 440 000
Nov 30 Creditors Control CJ 260 000

7
Accumulated Depreciation on Equipment B6
2020 1 Asset Disposal  (15 000 + GJ 21 042( 2020 1 Balance b/d 197 200
Jul Mar
6 042()) )
Jul 1 Depreciation GJ 6 042()
2021 28 Depreciation GJ 13 017(
Feb
)

9
 Asset Disposal N10
2020 1 Equipment GJ 160 000 2020 1 Accumulated depreciation on GJ 21 042()
Jul Jul
Equipment (15 000 + 6 042)
Debtors Control  GJ 120 000
Loss on sale of asset GJ 18 958()
160 000 160 000
Nov 30 Vehicles GJ 400 000 Nov 30 Accumulated depreciation on GJ 365 000(
Vehicles(320 000 + 45 000) )
Profit on Sale of Asset GJ 45 000() Creditors Control  GJ 80 000
445 000 445 000

16

Depreciation N11
2020 1 Accumulated depreciation on GJ 6 042()
Jul Equipment
No 30 Accumulated depreciation on Vehicles GJ 45 000()
v
2021 28 Accumulated depreciation on GJ 13 017()
Feb Equipment
(10 975 + 2 042)

Accumulated depreciation on vehicles  GJ 106 750(

)
(42 000 + 55 000 + 9 750)
8
Calculate the depreciation on Vehicles sold on 30 November 2020

400 000 x 15% x 9/12 = 45 000

 Calculate the depreciation on the old remaining vehicles at the end of the financial year

280 000 x 15% = 42 000

 Calculate the depreciation on the vehicles purchased on 30 April 2020 at the end of the financial year

440 000 x 15% x 10/12 = 55 000

 Calculate the depreciation on the vehicles purchased on 30 November at the end of the financial year

260 000 x 15% x 3/12 = 9 750

Calculate the depreciation on the Equipment sold

160 000 x 12 ½ % x 9/12 = 15 000

160 000 – 15 000 = 145 000() x 12 ½ % x 4/12 = 6 042()
6

 Calculate the depreciation on remaining equipment on 28 February 2021

CP (430 000 – 160 000) = 270 000 Acc Dep = (197 200 – 15 000()) = 182 200
270 000 – 182 200 = 87 800() X 12 ½ % = 10 975()

 Calculate the depreciation on the equipment purchased on 31 January 2021 at the end of the year

196 000 x 12 ½ % x 1/12 = 2 042