1 A motor vehicle which cost £12,000 was bought on credit from Trucks Ltd on 1 January 2006. Financial statements are prepared annually to 31 December and depreciation of vehicles is provided at 25...

1

A motor vehicle which cost £12,000 was bought on credit from Trucks Ltd on 1 January

2006. Financial statements are prepared annually to 31 December and depreciation of vehicles is

provided at 25 per cent per annum under the reducing balance method.

Required:

Prepare the motor vehicle account and the accumulated provision for depreciation on motor

vehicles account for the first two years of the motor vehicle’s working life.