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14.11 Depreciation and overhauls LO2, 5, 6

Branson Ltd owns two delivery vehicles (each with a residual value of $5000 and useful life of 4 years) and uses the straight-line method of depreciation. The business closes its accounting records annually on 30 June. The following events and transactions occurred during the first 3 financial years. Ignore GST.

20192020
July	1	Purchased a delivery truck from Mangrove Mountain Motors for $60 000 cash plus stamp duty of $620, and registration and third-party insurance of $840.
June	1	Made minor repairs to the truck for cash at a cost of $420.
June	30	Recorded annual depreciation.
20202021
July	1	Purchased a delivery van from Northern Motors for cash, $45 000. This van was a used vehicle which was expected to last 4 years from the date of purchase. Fitted four new tyres to the van at a cash cost of $1320.
June	30	Recorded depreciation on both truck and van.
20212022
July	1	Paid $3700 for an overhaul of the motor of the delivery truck. This expenditure is expected to extend the useful life by 1 year. The parts replaced in the truck were considered to have a carrying amount of $2000. Installed a two-way radio in the delivery van at a cost of $1600 to improve efficiency. It is anticipated the radio will have a useful life of 6 years with no residual value. This expenditure on the radio will not increase the useful life of the delivery van.
June	30	Recorded depreciation on both truck and van.

Required

1. Prepare entries (in general journal form) to record the transactions of Branson Ltd as they relate to both vehicles to 30 June 2022.

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