Pata Transport Limited (PTL) was incorporated on 1 June 2006 and on the same day bought its first lorry; KB099S for Sh. 9,000,000. On 1 April 2007,...

      

Pata Transport Limited (PTL) was incorporated on 1 June 2006 and on the same day bought its first
lorry; KB099S for Sh. 9,000,000.
On 1 April 2007, the company bought its second lorry KB 120T FOR Sh 12,000,000.
On 1 June 2008, the company bought a third lorry KB 340X for Sh. 6,000,000.
On 1 October 2008, lorry KB 099S was involved in an accident and was written off. The
insurance compensation paid to PTL by the insurers was Sh. 2,600,000.
On 31 December 2009,lorry KB 340X broke down and was traded in with a new lorry registration KB
419Y valued at Sh. 8,000,000.PTL; paid cash amounting to Sh. 5,400,000 for the lorry.
On 1 Apri12010, a van KB 890B was purchased for Sh 4,800,000.
Depreciation on motor vehicles is to be provided at the rate of 10% per annum on a straight line basis.
The policy of the company is to provide depreciation on a pro rata basis.
On 1 January 2009, the company decided to change its depreciation rate from 10% to 15% per annum.
The change was effected on motor vehicles that were in use retrospectively; that is from the year of
purchase. An adjusting entry was to be made in the accounts for the year ended 31 December 2009.
All lorries were comprehensively insured.
Assume the year end for PTL IS 31 December.
Required:
i) Motor vehicles account for the five years ended 31 December 2006,2007,2008,2009 and 2010.
ii) Provision for depreciation account for the same years stated in (b) (i) above
iii) Disposal of motor vehicles account

  

Answers


Kavungya
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Kavungya answered the question on May 16, 2019 at 06:42


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