What is the loss or gain on disposal of motor vehicle

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Reference no: EM133674888

Questions

1. On 5 December 2022, I sold a motor vehicle for £4,820. The customer was due to pay me on 5 April 2023 but only paid half of the amount due by cheque on the last day of the accounting year. Nothing regarding the disposal transaction, including any cash received, has been recorded in the accounts. This motor vehicle had been bought on 6 October 2021 for £6,572.

2. On 5 February 2023 I bought a new motor vehicle for £12,000 on credit terms. The credit entry was correctly dealt with but I mistakenly debited Fixtures and Fitting at cost.

3. Depreciation on motor vehicles is provided at 25% per annum using the reducing balance basis on a monthly pro-rata basis. Depreciation on fixtures, fittings and equipment is provided at 15% per annum on the straight line basis, assuming no residual value. There were no purchases or disposals of fixtures, fittings, and equipment during the year.

4. How much is the depreciation charge? What is the loss or gain on disposal of motor vehicle.

Please include your workings and non-current asset note.

Reference no: EM133674888

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