Question: Property, plant and equipment
Cameron Ltd purchased a truck for cash for $52,000 on January 1, 2010. At the time of purchase it was estimated that the useful life of the vehicle would be 100,000 kilometres and it was expected that it would travel that distance over four years. At the end of four years of useful life it was calculated that the truck could be sold for $12,000.
The actual distance covered by the truck is as follows:
Year ending 30 June:
2010 10,000 kilometres
2011 25,000 kilometres
2012 30,000 kilometres
2013 22,000 kilometres
2014 8,000 kilometres
Required: Prepare the general journal entries to record the sale of the vehicle for $21,000 on 31st March 2013. Assume the vehicle is being depreciated under the straight-line method. Ignore GST. Narrations are required.