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

Sariah owns a ladies’ clothing business and keeps her records using double entry bookkeeping. The following events took place in September 2020. 1 A motor vehicle was bought on credit from Sharpe Motors for $6350. 2 Ruhee, a credit customer, was declared bankrupt and still owed Sariah $1200. The debt is to be written off. Sariah is drawing up her financial statements for the year ended 30 September 2020. She gives the following details for fixtures and fittings. 2019 October 1 Fixtures and fittings at cost $28600 Provision for depreciation of fixtures and fittings $6185 2020 January 31 Fixtures were sold and a cheque for $1150 was received The fixtures had originally been bought on 1 February 2018 for $1500 March 31 New fixtures were purchased and paid for by cheque $3500 Sariah’s policy is to charge depreciation on fixtures and fittings at 10% per annum using the reducing balance method. Depreciation for a full year is charged in the year of purchase, but none is charged in the year of disposal.