The following information relates to the delivery vehicles of Swift Limited. 1 July 2012 Purchased delivery vehicle 1 for $15000. 1 July 2013 Purchased delivery vehicle 2 for $20000. 30 June 2014 Disposed of delivery vehicle 1 and received a cheque for $8000. Depreciation is charged at the rate of 20% using the diminishing (reducing) balance method. REQUIRED Swift Limited are considering the following expenditure on delivery vehicle 2. 1 Replacement tyres 2 A new trailer 3 An annual maintenance service.

1. (a)State two causes of depreciation of a delivery vehicle. 1 2..[2]
2. (b)Complete the following table to show the depreciation charged for the years ended 30 June 2013 and 30 June 2014. Year ended | Delivery vehicle 1 | Delivery vehicle 2 | Total for year ---|---|---|--- | $ | $ | $ 30 June 2013 | | | 30 June 2014 | | | Total | | |[3]
3. (c)Prepare the provision for depreciation of delivery vehicles account for the year ended 30 June 2014. Balance the account and bring down the balance. Provision for depreciation of delivery vehicles account Date | Details | $ | Date | Details | $[4]
4. (d)Prepare the journal entries to record the disposal of delivery vehicle 1. Narratives are not required. Journal Dr | Cr ---|--- $ | $[6]
5. (e)Prepare an extract from the statement of financial position at 30 June 2014, showing the delivery vehicles.[2]
6. (f)State whether each of the items 1, 2 and 3 above is capital expenditure or revenue expenditure.[3]