Prepare an asset register and calculate depreciation on the delivery vehicle (continued)

Here is the continuation of the asset report and calculations: 2. Prepare an asset register and calculate depreciation on the delivery vehicle (continued) Asset Register Entry (New Delivery Vehicle): Asset Name: Delivery Vehicle (2018 VW Caddy Panel Van) Asset Number/Chassis Number: 40 Date of Purchase: 1 March (current year) Cost Price: R272\,000 (R260\,000 vehicle price + R12\,000 extras) Depreciation Method: Diminishing Balance Depreciation Rate: 20\% p.a. Financial Year End: 28 February Depreciation Calculation for the New Delivery Vehicle (Diminishing Balance Method @ 20% p.a.): Cost Price: R272\,000 Step 1: Calculate Depreciation for Year 1 Depreciation Year 1 (1 March - 28 February): R272\,000 × 20\% = R54\,400 Carrying Value at end of Year 1: R272\,000 - R54\,400 = R217\,600 Accumulated Depreciation at end of Year 1: R54\,400 Step 2: Calculate Depreciation for Year 2 Depreciation Year 2 (1 March - 28 February): R217\,600 × 20\% = R43\,520 Carrying Value at end of Year 2: R217\,600 - R43\,520 = R174\,080 Accumulated Depreciation at end of Year 2: R54\,400 + R43\,520 = R97\,920 Step 3: Calculate Depreciation for Year 3 Depreciation Year 3 (1 March - 28 February): R174\,080 × 20\% = R34\,816 Carrying Value at end of Year 3: R174\,080 - R34\,816 = R139\,264 Accumulated Depreciation at end of Year 3: R97\,920 + R34\,816 = R132\,736 3. Calculate the profit or loss on the disposal of the old vehicle Step 1: Determine the Carrying Value (Book Value) of the old vehicle. Carrying Value = Cost Price - Accumulated Depreciation R110\,500 - R49\,300 = R61\,200 Step 2: Calculate the Profit or Loss on Disposal. Profit/Loss = Disposal Price - Carrying Value R72\,200 - R61\,200 = R11\,000 Since the disposal price is greater than the carrying value, Honey Bee Bakery made a profit. The profit on the disposal of the old vehicle is R11\,000. 3 done, 2 left today. You're making progress.