On December 31, 2021, the company exchanged old motor vehicles and RM48,000 for new motor vehicles. The old motor vehicles were purchased on January 1, 2020, for RM168,000 and was estimated to have a RM24,000 residual value at the end of its 10-year life. It is estimated that the fair value of the old motor vehicles is RM78,000 on December 31, 2021. Required: a) Prepare the journal entry to record the annual depreciation expense at 31 December 2020. b) Prepare the journal entry to record the above transactions (exchange of assets) using straight line method at 31 December 2021. c) Assume that the Company uses the declining balance method; determine the amount of depreciation expenses for 2020 and 2021. Show all workings

On December 31, 2021, the company exchanged old motor vehicles and RM48,000 for new motor vehicles. The old motor vehicles were purchased on January 1, 2020, for RM168,000 and was estimated to have a RM24,000 residual value at the end of its 10-year life. It is estimated that the fair value of the old motor vehicles is RM78,000 on December 31, 2021. Required: a) Prepare the journal entry to record the annual depreciation expense at 31 December 2020. b) Prepare the journal entry to record the above transactions (exchange of assets) using straight line method at 31 December 2021. c) Assume that the Company uses the declining balance method; determine the amount of depreciation expenses for 2020 and 2021. Show all workings

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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