Reference no: EM132521026

Question - Use the information provided below, for Hey Dealers for the financial year ended 30 November 20.8, to answer questions 1 to 3:

On 1 November 20.6, Hey Dealers bought a second-hand motor vehicle for a cash amount of R224 579 to be used in the business. On 31 August 20.8, Hey Dealers sold the second-hand motor vehicle to his friend for a cash amount of R155 000 and bought a new motor vehicle for a cash price of R450 780 on the same day. It is the accounting policy for Hey Dealers to provide for depreciation on motor vehicles at 20% per annum on the diminishing-balance method. Round your answer off to the nearest Rand. The financial year-end of Hey Dealers is at 30 November of each year.

Q1. What is the total accumulated depreciation of the disposed motor vehicle to be transferred to the realisation account at the date of disposal?

(1) R 82 346

(2) R 78 603

(3) R 74 410

(4) R109 595

(5) R 73 662

Q2. What is the carrying amount of motor vehicles at the end of the financial year, 30 November 20.8?

(1) R360 624

(2) R428 241

(3) R420 728

(4) R510 793

(5) R150 169

Q3. What is the profit/loss amount on the sale of motor vehicle to be disclosed in the statement of profit or loss and other comprehensive income for the year ended 30 November 20.8, if the total accumulated depreciation at the date of disposal amounted to R90 000?

(1) R12 767 (Profit)

(2) R20 421 (Loss)

(3) R12 767 (Loss)

(4) R20 421 (Profit)

(5) R 4 083 (Profit)