Jasmine runs a consulting business.
On 1 April 2024, the balances in Jasmine’s ledger accounts were as follows:
Motor vehicles $16 000
Provision for depreciation of motor vehicles $7000
Trade receivables $12 220
Provision for doubtful debts $366
Rent (prepaid) $900
Rates (unpaid) $270
In the year ended 31 March 2025, Jasmine’s bank payments comprised:
Motor vehicles $18 000
Rent and rates $14 960
Extra information:
1 Depreciation is to be calculated at 25% per annum by the reducing balance method. Vehicles bought during the year are to receive a full year’s depreciation.
2 Trade receivables at 31 March 2025 stood at $11 800. A further $300 remains to be written off as irrecoverable.
3 The provision for doubtful debts is to be kept at 3% of net trade receivables.
4 At 31 March 2025, prepaid rent amounted to $925 and rates owing were $185.
(a)[4]
Prepare the provision for depreciation of motor vehicles account for the year ended 31 March 2025, then balance it and bring the balance down at 1 April 2025.
(b)[4]
Prepare the provision for doubtful debts account for the year ended 31 March 2025. Balance it and carry the balance down at 1 April 2025.
(c)[6]
Prepare the rent and rates account for the year ended 31 March 2025. Balance it and bring the balances down at 1 April 2025.
(d)[3]
Prepare the current assets section in Jasmine’s statement of financial position as at 31 March 2025.
(e(i))[1]
State how the consistency principle is used when depreciation is charged.
(e(ii))[1]
State one method Jasmine could use to reduce the risk of irrecoverable debts.
(e(iii))[1]
State which accounting principle Jasmine is using when she adjusts for rent prepaid.