Answer to Question #255308 in Economics for Mufasa

Question

Question 1 The following information was taken from the books of Gros Draine Traders, a sole trader owned and run by Joy Grande, at the end of the financial year ended 31 July 2019: Extract of the Pre-adjustment trial balance of Gros Draine Traders as at 31 July 2019 Equipment 210 000 Debtors Control 62 000 Accumulated Depreciation on Equipment 42 000 Bank 45 000 Additional information: 1. Gros Draine Traders bought all their equipment on 1 August 2017. 2. On 31 January 2019, equipment with an original cost price of R15 000 was sold for R13 500 cash and new equipment was purchased on credit for R25 000. No entries have been made for the transactions dated 31 January 2019. 3. Depreciation is to be calculated as follows: On equipment at 20% per annum according to the diminishing balance method. Ignore VAT. Required: Q.3.1 Prepare the general journal entries relating to the sale of the computer for cash on 31 January 2019. Narrations are required. (21)

Answer 1

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