To record the depreciation adjustments for furniture and vehicles for the year ending 30 June 2023, we need to calculate the depreciation amounts for both assets.
1. Calculate Depreciation for Furniture
Cost of Furniture: R80,000
Depreciation Rate: 12.5% per year
Depreciation Calculation for 2 Years (2021 to 2023):
- Year 1 (2021-2022):
\[ R80,000 \times 12.5% = R10,000 \] - Year 2 (2022-2023):
\[ R80,000 \times 12.5% = R10,000 \]
Total Depreciation for Furniture:
\[
R10,000 + R10,000 = R20,000
\]
2. Calculate Depreciation for Vehicles
Cost of Vehicles: R300,000
Depreciation Rate: 20% per year (diminishing balance method)
Depreciation Calculation:
-
Year 1 (2021-2022):
\[ R300,000 \times 20% = R60,000 \]
Remaining Balance after Year 1:
\[ R300,000 - R60,000 = R240,000 \] -
Year 2 (2022-2023):
\[ R240,000 \times 20% = R48,000 \]
Remaining Balance after Year 2:
\[ R240,000 - R48,000 = R192,000 \]
Total Depreciation for Vehicles:
\[
R60,000 + R48,000 = R108,000
\]
3. Journal Entry for Depreciation Adjustments
Now we will journalize the depreciation for the year ending 30 June 2023:
Journal Entry
Date: 30 June 2023
| Account | Debit | Credit |
|--------------------------------|--------------|--------------|
| Depreciation Expense - Furniture| R10,000 | |
| Accumulated Depreciation - Furniture| | R10,000 |
| Depreciation Expense - Vehicles | R48,000 | |
| Accumulated Depreciation - Vehicles| | R48,000 |
Summary of Journal Entry
- Depreciation Expense - Furniture: R10,000
- Accumulated Depreciation - Furniture: R10,000
- Depreciation Expense - Vehicles: R48,000
- Accumulated Depreciation - Vehicles: R48,000
This journal entry reflects the depreciation adjustments for furniture and vehicles for the financial year ending 30 June 2023.