Accounting for depreciation and disposal of non-current assets — practice question

Prepare Stalla’s provision for doubtful debts account for the year ended 31 December 2022. Balance the account at 31 December 2022 and carry the balance down to 1 January 2023.

State two reasons why Stalla keeps a provision for doubtful debts.

Calculate the gain or loss on disposal of the vehicle.

Prepare Stalla’s motor vehicles account for the year ended 31 December 2022. Balance the account at 31 December 2022 and carry the balance down to 1 January 2023.

Prepare Stalla’s provision for depreciation on motor vehicles account for the year ended 31 December 2022. Balance the account at 31 December 2022 and carry the balance down to 1 January 2023.

Put a tick (✓) in the correct box below to show whether each cost is capital expenditure or revenue expenditure.