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Hyland Ltd commenced operation on 31 March 2020. The company balances its accounts at month-end...

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Accounting

Hyland Ltd commenced operation on 31 March 2020. The company balances its accounts at month-end and the end of the reporting period is 31st December each year. Ignore GST.

The following events occurred during 2020 and 2021.

2020

April 1 Paid $80 000 cash for a second-hand truck Paid $10 000 to recondition the engine of the truck

June 30 Paid $20 000 cash for equipment. It was estimated that the equipments useful life would be 5 years with a residual value of $1 500.

August 31 Paid $750 cash for the trucks service and oil change.

Dec 31 Recorded depreciation on the truck at 40% p.a. diminishing balance method, and on the equipment using straight line method.

2021

March 13 Paid $600 cash to replace a damaged bumper on the truck.

July 1 Installed a new tray back on the truck at a cost of $7 500.

Dec 31 It was decided to revise the diminishing balance depreciation method on the truck to 30%.

Dec 31 Recorded depreciation on the truck and on the equipment.

Required: a. Prepare journal entries to record the events in the transaction list above.

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