1
Distance Limited owned three lorries at 1 April 2006:
A Purchased 21 May 2002 Cost £31,200
B Purchased 20 June 2004 Cost £19,600
C Purchased 1 January 2006 Cost £48,800
Depreciation is charged annually at 20% on cost on all vehicles in use at the end of the year.
During the year ended 31 March 2007, the following transactions occurred:
(i) 1 June 2006 lorry B was involved in an accident and considered to be a write-off by the insurance
company which paid £10,500 in settlement.
(ii) 7 June 2006 lorry D was purchased for £32,800
(iii) 21 August 2006 lorry A was sold for £7,000
(iv) 30 October 2006 lorry E was purchased for £39,000
(v) 6 March 2007 lorry E was considered not to be suitable for carrying the type of goods required
and was exchanged for lorry F. The value of lorry F was deemed to be £37,600.
Required:
Prepare the ledger T-accounts recording these transactions for the year ending 31 March 2007 and
bring down the balances at 1 April.