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    Test review Financial Accounting

    Uploaded by

    Fadzie Kunze
    Financial Accounting test

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Test review Financial Accounting

    Uploaded by

    Fadzie Kunze
    0 views3 pages
    Financial Accounting test

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    © © All Rights Reserved

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    PDF, TXT or read online from Scribd

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    Financial Accounting test

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    0 views3 pages

    Test review Financial Accounting

    Uploaded by

    Fadzie Kunze
    Financial Accounting test

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    OCEANS FOODS LTD

    Working 1. Land and Buildings.

    a) Revaluation Surplus = Revaluation - Carrying Amount


    = 1 750 000 - 9 00 000
    = $850 000

    Land revaluation = $650 000 - $500 000


    = $150 000

    Buildings Revaluation = $850 000 - $150 000


    = $700 000

    b) Depreciation calculation

    Carrying Amount:
    Land = $500 000 + $150 000
    = $650 000
    Buildings = $400 000 + $700 000
    $1 100 000

    Depreciation :
    Land $0
    Blng (new dpn) Useful life assessed to 40 years
    = $1 100 000 / 40
    = $27 500

    Blng ( old dpn) 2% pa


    = 2% × $1 100 000
    = $22 000

    Difference = $27 00 - $22 000


    = $5 500
    Journal Entries
    Debit Revaluation surplus $5 500
    Credit Retained earnings $5 500
    Being movement on owner's equity, not through P&L
    Working 2: Machine account.

    Balance b/d 80 000 Accumulated depreciation


    57 000
    Profit on disposal Disposal 25 000
    82 000 82 000

    New machine (9 months)


    Cost 20 000 VAT 3 000
    Delivery cost 500 Discount 1 000
    Installation 750
    Capitalisation 300 Bal c/d 17 550
    21 550 21 550
    Bal b/d 17 550

    Depreciation:
    Machinery 25% Reducing balance method
    = 25% × 17 550 × (9/12)
    = $3 290.625

    Plant and Equipment a/c


    Bal b/ 340 500 Accumulated depreciation
    125 900
    Disposal 80 000
    Bal c/d 134 600
    340 500 340 500
    Bal b/d 134 600

    Depreciation: Plant & Equip = 25% Reducing balance method


    = 25% × 134 600
    = $33 650

    Cost Plant & Equip = $17 550 + ( 340 600 - 80 000)


    = $278 050

    Total Dpn Plant & Eq = $3 290.625 + $33 650


    = $36 940.625
    Working 3: Computer Equipment

    Carrying amnt at Dec 2012 = $112 000


    Depreciation method on 1 Jan 2023 = 40% Reducing balance
    Depreciation charge for the year = 40% × 112 000
    = $44 800

    OCEANS FOODS
    Analysis of PPE for the year ended 31 December 2023.
    Land Building Plant & Computer Total
    Equip

    Year ended 31/12/2022


    Cost 500 000 1 000 000 340 500 617 800 2 458 300
    Accumulated depriciation 0 (600 000) (125 900) (505 800) (1 231 700)
    Carrying amount 500 000 400 000 214 600 112 000 1 226 600

    Year ended 31/12/2023


    Opening carrying amount 500 000 400 000 214 600 112 000 1 226 600
    Additions 17 550 17 550
    Revaluations 150 000 700 000 850 000
    Disposal (80 000) (80 000)
    Dpn charge for the year 0 (27 500) (36 940.625) (44 800) (109 240.625)
    Closing carrying amount 650 000 1 072 500 115 209.375 67 200 1 904 909.375

    Gross carrying amount 650 000 1 700 000 278 050 617 800 3 245 850
    Accumulated depreciation 0 (627 500) (162 840.652) (550 600) (1 340 940.625)
    Closing carrying amount 650 000 1 072 500 115 209.375 67 200 1 904 909.375

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