Bank reconciliations and cash

This question continues on from question 1 above.

It is now March 2020, and Mr & Mrs. Fisher have come to you for some assistance as they are having trouble reconciling the bank account as at 29 February 2020. The February 2020 bank statement appeared as follows:

Bank statement for February 2020:
Date	Description	Deposit	Withdrawal	Balance
1/02/2020	Opening balance			$13,276.00
2/02/2020	Deposit - PayPal	2,288.00		$15,564.00
2/02/2020	EFT - Elite Real Estate Ltd - rent		990.00	$14,574.00
5/02/2020	Deposit - PayPal	3,422.00		$17,996.00
7/02/2020	Cheque 15		9,955.00	$8,041.00
11/02/2020	EFT - Star FM Radio - advertising		332.00	$7,709.00
12/02/2020	Deposit - PayPal	2,853.00		$10,562.00
13/02/2020	Deposit - PayPal	2,239.00		$12,801.00
16/02/2020	Cheque 19		220.00	$12,581.00
19/02/2020	Cheque 16		1,287.00	$11,294.00
22/02/2020	Deposit - PayPal	1,510.00		$12,804.00
23/02/2020	EFT - Facebook Advertising Ltd - advertising		330.00	$12,474.00
23/02/2020	EFT - Google Advertising Ltd - advertising		242.00	$12,232.00
24/02/2020	Deposit - Rainbow Childcare - 2 pools	330.00		$12,562.00
26/02/2020	Cheque 20		4,015.00	$8,547.00
26/02/2020	EFT - Mr & Mrs. Fisher		2,000.00	$6,547.00
27/02/2020	EFT - Telstra - phone		99.00	$6,448.00
28/02/2020	Interest	2.00		$6,450.00
28/02/2020	Monthly bank fee		10.00	$6,440.00

Splash Out The Backs accounting records for February 2020 showed an opening balance for the bank account of $2,034.00. The bank reconciliation from January 2020 showed a bank balance of $13,276.00, less outstanding cheques (Cheque 15 for $9,955.00, and Cheque 16 for $1,287.00). Following is a summary of deposits and withdrawals recorded in the accounting records during February:

Withdrawals:
Date	Detail	Amount
2/02/2020	EFT - Elite Real Estate Ltd (rent)	$900.00
7/02/2020	Cheque 15 - Intex Pools Ltd (inventory)	$9,956.00
11/02/2020	EFT - Star FM Radio (advertising)	$332.00
15/02/2020	Cheque 19 - Officeworks (stationery)	$220.00
19/02/2020	Cheque 16 - Australia Post (delivery costs to customers)	$1,287.00
23/02/2020	Cheque 20 - Intex Pools Ltd (inventory)	$4,015.00
26/02/2020	EFT - Mr & Mrs. Fisher (drawings)	$2,000.00
27/02/2020	EFT - Telstra (phone)	$99.00
28/02/2020	Cheque 21 - Snap Printery (stationery)	$440.00
		$19,249.00

Deposits:
Date	Detail	Amount banked
2/02/2020	Sales	$2,880.00
5/02/2020	Sales	$3,422.00
12/02/2020	Sales	$2,883.00
13/02/2020	Sales	$2,239.00
22/02/2020	Sales	$1,510.00
29/02/2020	Sales	$704.00
		$13,638.00

The bank did not make any errors.

Required:

1. Prepare the bank reconciliation for Splash Out The Back as at 29 February 2020. (5 marks)
2. Prepare the journal entries to correct any errors made by Splash Out The Back, and to record transactions that have not yet been entered into the business accounting records. (Note: The correction of any errors relating to deposits (other than interest revenue) should be made to the Sales account, and the correction of any errors relating to payments should be made to the appropriate expense or asset account). As Splash Out The Back is registered for GST, you must account for GST when preparing these journal entries. (Note: all sales and all expenses (apart from interest received and bank fees paid) are subject to GST). (4 marks)
3. Prepare the bank T-account for February 2020, in order to determine the balance in this ledger account after the above journal entries have been recorded and posted. (1 mark)

   Question 3 [10 marks]

   Property, plant, and equipment

   This question continues on from questions 1 and 2 above.

   Splash Out The Back purchased a delivery vehicle for the business on 1 April 2020 for $27,000, paid from the business bank account. The delivery vehicle is expected to have a useful life of 8 years (or 300,000 kms), and a residual value of $3,000.

   On 30 June 2022, the business sold the delivery vehicle for $22,000.

   For the purposes of this activity:

4. assume that the business has a year-end of 30 June.
5. ignore any GST.

6. Required:

7. Assume that the company uses the straight-line method of depreciation. Calculate the depreciation expense for each financial year (up to 30 June 2022), and calculate the gain/(loss) on disposal. Prepare journal entries to account for the acquisition of the delivery vehicle, depreciation expense for each financial year, and the sale of the delivery vehicle on 30 June 2022. Include dates and brief narrations for each journal entry. (5 marks)
8. Now assume that the company uses the units-of-production method of depreciation. Prepare a depreciation schedule for the delivery vehicle (up to 30 June 2022), assuming that the delivery vehicle was used for: 6,000 kms during the year ended 30 June 2020, 40,000 kms during the year ended 30 June 2021, 45,000 kms during the year ended 30 June 2022. Show workings. (2.5 marks)
9. Now assume that the company uses the reducing-balance method of depreciation. Calculate the deprecation rate, and prepare a depreciation schedule for the delivery vehicle (up to 30 June 2022). Show workings. (2.5 marks)