Question

Ruda is the owner and operator of Ruda Traders, an Accounting consulting business.

She has asked you to assist her with the following transaction that took place in the current accounting period regarding depreciation.



The following balances appeared in the financial records of Ruda Traders on 1 April 20.19, the begining of the financial year:



Vehices (Cost Price) R 50 000

Accumulated depreciation: Vehicles (1/04/20.19) R7 500



Deprecation on vehicles should be calculated @ 15% on cost.



The recording of adjusted journal entry for depreciation would be:



a.
Debit Accumulated depreciation with R15 000 and credit depreciation with R15 000.

b.
Debit Accumulated depreciation with R7 500 and credit depreciation with R7 500.

c.
Debit depreciation with R7 500 and credit accumulated depreciation with R7 500.

d.
Debit depreciation with R15 000 and credit accumulated depreciation with R15 000.

Answer 1

b. Debit Accumulated depreciation with R7 500 and credit depreciation with R7 500.