Gain or Loss – NBC Institute

FA – Nov 2021 – L1 – SB – Q6b – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

This question involves calculating the gain or loss on the disposal of an old vehicle and preparing ledger accounts.

Question

Propati Limited has a fleet of motor vehicles that are used to distribute goods to the market. As at July 2020, the cost of the vehicles was ₦750,000,000 and their accumulated depreciation was ₦30,500,000. On January 1, 2021, the company bought a new vehicle for ₦2,800,000. One of the old vehicles, which was acquired 3 years ago at a cost of ₦1,000,000 with accumulated depreciation of ₦600,000, was accepted by the seller in part-exchange at a value of ₦480,000.

Required:
i. Calculate the gain or loss on disposal of the old car. (2 Marks)
ii. Prepare the following ledger accounts in respect of the transactions:

Motor vehicles account (4 Marks)
Accumulated depreciation account (2 Marks)
Disposal of asset account (2 Marks)

Answer

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Tags: Disposal of assets, Gain or Loss, IAS 16, Ledger Accounts
Level: Level 1

Topic: Accounting for Property, Plant, and Equipment (PPE) IAS 16
Series: NOV 2021

FA – Nov 2022 – L1 – SB – Q6b – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

This question requires calculating the gain or loss on disposal of a motor vehicle and preparing the necessary ledger accounts.

Question

Propati Limited has a fleet of cars that are used to distribute goods to the market. As at July 1, 2020, the cost of the cars was ₦750,000,000, and their accumulated depreciation was ₦30,500,000. On January 1, 2021, the company bought a new car for ₦2,800,000. One of the old cars, which was acquired 3 years ago at a cost of ₦1,000,000 with accumulated depreciation of ₦600,000, was accepted by the seller in part exchange at a value of ₦480,000. The reporting date of Propati Limited is December 31, and the entity charges depreciation using the straight-line method.

Required:
i. Calculate the gain or loss on disposal of the old car. (2 Marks)
ii. Prepare the following ledger accounts in respect of the transactions:

Disposal of motor vehicle account (2 Marks)
Motor vehicles account (4 Marks)
Accumulated depreciation account (2 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accumulated Depreciation, Disposal, Gain or Loss, Ledger Accounts, Motor Vehicles
Level: Level 1

Topic: Accounting for Property, Plant, and Equipment (PPE) IAS 16
Series: NOV 2022

FA – Nov 2021 – L1 – SB – Q6b – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

This question involves calculating the gain or loss on the disposal of an old vehicle and preparing ledger accounts.

Question

Required:
i. Calculate the gain or loss on disposal of the old car. (2 Marks)
ii. Prepare the following ledger accounts in respect of the transactions:

Motor vehicles account (4 Marks)
Accumulated depreciation account (2 Marks)
Disposal of asset account (2 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Disposal of assets, Gain or Loss, IAS 16, Ledger Accounts
Level: Level 1

Topic: Accounting for Property, Plant, and Equipment (PPE) IAS 16
Series: NOV 2021

FA – Nov 2022 – L1 – SB – Q6b – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

This question requires calculating the gain or loss on disposal of a motor vehicle and preparing the necessary ledger accounts.

Question

Required:
i. Calculate the gain or loss on disposal of the old car. (2 Marks)
ii. Prepare the following ledger accounts in respect of the transactions:

Disposal of motor vehicle account (2 Marks)
Motor vehicles account (4 Marks)
Accumulated depreciation account (2 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Accumulated Depreciation, Disposal, Gain or Loss, Ledger Accounts, Motor Vehicles
Level: Level 1

Topic: Accounting for Property, Plant, and Equipment (PPE) IAS 16
Series: NOV 2022

Question Tag: Gain or Loss

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FA – Nov 2021 – L1 – SB – Q6b – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

This question involves calculating the gain or loss on the disposal of an old vehicle and preparing ledger accounts.

FA – Nov 2022 – L1 – SB – Q6b – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

This question requires calculating the gain or loss on disposal of a motor vehicle and preparing the necessary ledger accounts.

FA – Nov 2021 – L1 – SB – Q6b – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

This question involves calculating the gain or loss on the disposal of an old vehicle and preparing ledger accounts.

FA – Nov 2022 – L1 – SB – Q6b – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

This question requires calculating the gain or loss on disposal of a motor vehicle and preparing the necessary ledger accounts.

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Question Tag: Gain or Loss

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FA – Nov 2021 – L1 – SB – Q6b – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

This question involves calculating the gain or loss on the disposal of an old vehicle and preparing ledger accounts.

You're reporting an error for "FA – Nov 2021 – L1 – SB – Q6b – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16"

FA – Nov 2022 – L1 – SB – Q6b – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

This question requires calculating the gain or loss on disposal of a motor vehicle and preparing the necessary ledger accounts.

You're reporting an error for "FA – Nov 2022 – L1 – SB – Q6b – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16"

FA – Nov 2021 – L1 – SB – Q6b – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

This question involves calculating the gain or loss on the disposal of an old vehicle and preparing ledger accounts.

You're reporting an error for "FA – Nov 2021 – L1 – SB – Q6b – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16"

FA – Nov 2022 – L1 – SB – Q6b – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16

This question requires calculating the gain or loss on disposal of a motor vehicle and preparing the necessary ledger accounts.

You're reporting an error for "FA – Nov 2022 – L1 – SB – Q6b – Accounting for Property, Plant, and Equipment (PPE) in Accordance with IAS 16"

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