EXERCISE 3.3 3.3

Dairy Delights ends its financial year on 31 December. Fixtures and fittings are depreciated at 20% per annum using the diminishing balance method. Motor vehicles are depreciated on the straight-line basis over an estimated useful life of five years, with a residual value equal to 10% of the cost of the vehicle.

Dairy Delights purchased a truck for R400 000 on credit on 1 July 2022. The amount owing is payable over a period of 6 months. The licensing expense for the truck amounting to R1 700 was paid on 1 July 2022 and on the same day a canopy costing R50 000 was purchased on credit from EC Canopy Supplier and fitted to the truck.

On 30 August 2022, the company bought new shop fittings for R75 000 cash and paid additional installation costs of R5 000. The new shop fittings were only ready for use after installation on 1 October 2022.

A machine costing R300 000 was purchased for cash on 1 January 2023. The machine has a useful live of 10 years and is to be depreciated using the straight-line method.

No other purchases or sales of non-current assets were made in the 2022 and 2023 financial years.


REQUIRED:

Prepare entries in general journal form (without narrations) to record all transactions, adjustments and closing entries for all events relating to non-current assets for the years ended 31 December 2022 and 2023.

NOTE: Work to the nearest R1.