en relación con los perfiles
8.2. CUADRO DE COMPETENCIAS DEFINITIVO
Motor vehicles at cost 10,000
Accumulated depreciation of motor vehicles 4,000
During the year to 30 September 20X6, the following transactions occurred:
31 Jan. 20X6 Bought a motor van (plant number M V11) costing $9,000
24 Apr. 20X6 Sold a motor van (plant number MV05) for $500, which had originally cost $4,000 in January 20X3
During the year to 30 September 20X7, the following transactions occurred:
20 Feb. 20X7 Bought a motor van (plant number M V12) costing $12,000
31 Aug. 20X7 Traded-in van bought on 31 January 20X6 (plant number M V11) for a new van (plant number M V13) costing $14,000. The trade-in allowance was $7,400.
ACCOUNTING FOR NON-CURRENT ASSETS 163 FUNDAMENTALS OF FINANCIAL ACCOUNTING
ABC Ltd accounts for depreciation on its motor vehicles at a rate of 25 per cent per annum using the reducing-balance method. It is company policy to make a full year’s charge against all assets held at the end of its fi nancial year (30 September).
Requirements
Insert the missing fi gures into the ledger accounts below to record the above transactions, showing the values that will be transferred to the company’s income statement and statement of fi nancial position at the end of each of the fi nancial years to 30 September 20X6 and 20X7.
Motor vehicles at cost
$ $
1.10.X5 Balance b/d 24.04.X6 Disposal
31.01.X6 Bank 30.09.X6 Balance c/d
1.10.X6 Balance b/d 31.08.X7 Disposal
20.02X7 Bank
31.08.X7 Bank
Disposal 30.09.X7 Balance c/d
1.10.X7 Balance b/d
Motor vehicles – accumulated depreciation
$ $
24.04.X6 Disposal [W1] 1.10.X5 Balance b/d
30.09.X6 Balance c/d 30.09.X6 Income statement [W2]
31.08.X7 Disposal [W3] 1.10.X6 Balance b/d
30.09.X7 Balance c/d 30.09.X7 Income statement [W4]
1.10.X7 Balance b/d
ACCOUNTING FOR NON-CURRENT ASSETS
REVISION QUESTIONS C2 164
Workings
$ % $
W1 Year ended
30 Sep. 20X3
Year ended
30 Sep. 20X4
Year ended
30 Sep. 20X5
Total
W2 Depreciation
y/e 30.09.X6
W3 Depreciation (disposal)
y/e 30.09.X7
W4 Depreciation
y/e 30.09.X7
Motor vehicles – disposal
$ $
24.04.X6 Motor vehicles cost 24.04.X6 Motor vehicles –
accumulated depreciation
Bank
30.09.X6 Income statement
31.08.X7 Motor vehicle cost 31.08.X7 Motor vehicle –
accumulated depreciation
30.09.X7 Income statement Motor vehicle cost
ACCOUNTING FOR NON-CURRENT ASSETS 165 FUNDAMENTALS OF FINANCIAL ACCOUNTING
Question 3
ABC Ltd prepares fi nancial statements to 31 December each year. On 1 January 20X5, it had the following balances on its non-current assets accounts:
Debit Credit
$ $
Motor vehicles at cost 15,000
Plant and equipment at cost 24,000
Motor vehicles – accumulated depreciation 9,000
Plant and equipment – accumulated depreciation 10,500
During the year to 31 December 20X5, the following transactions took place:
(i) purchased a new machine on 1 February at a cost of $7,500;
(ii) installed offi ce equipment in its offi ce building on 14 March at a cost of $11,500;
(iii) sold equipment on 1 April for $2,000. It had originally been purchased on 1 January 20X1 for $5,600;
(iv) sold a motor vehicle on 31 July for $3,400 that had been purchased on 1 August 20X2 for $9,400, including $100 annual vehicle licence tax and $300 warranty against mechanical defects for 2 years;
(v) purchased a motor vehicle on 1 August for $10,000, including $500 delivery, $100 annual vehicle licence tax and $400 extended warranty against mechanical defects for 3 years;
(vi) carried out major repairs to some equipment on 1 October costing $15,000. This included a new motor costing $5,000, which increased the effi ciency of the equip-ment by 200 per cent.
The company accounts for a full year’s depreciation on non-current assets held at the end of each year using the following methods and rates:
Motor vehicles 25% per annum, reducing balance
Plant and equipment 20% per annum, straight line
Requirements
(a) Insert the missing fi gures for the transactions numbered (i)–(vi) above in the ledger accounts of ABC Ltd and account for depreciation as appropriate for the year ended 31 December 20X5.
(b) Insert the missing fi gures in the extract from the income statement for the year ended 31 December 20X5 in respect of the above transactions.
ACCOUNTING FOR NON-CURRENT ASSETS
ACCOUNTING FOR NON-CURRENT ASSETS 167 FUNDAMENTALS OF FINANCIAL ACCOUNTING
Plant and equipment – disposal
$ $
Motor vehicles –disposal
$ $
(b) Income statement extract – year ended December 20X5
$
Question 4
SBJ’s non-current asset register gives the cost and accumulated depreciation to date for every non-current asset held by the company. Prior to charging depreciation for 20X4, the total carrying amount of all non-current assets on the register at 31 December 20X4 was
$147,500. At the same date, the non-current asset accounts in the nominal ledger showed the following balances:
Cost to date Accumulated Depreciation
($) ($)
Motor vehicles 48,000 12,000
Plant and machinery 120,000 30,000
Offi ce equipment 27,500 7,500
ACCOUNTING FOR NON-CURRENT ASSETS
REVISION QUESTIONS C2 168
You are told that
(i) An item of plant costing $30,000 has been sold for $23,500 during 20X4. The loss on disposal was $800. No entries have been made for this disposal in the nominal ledger, but the asset has been removed from the non-current asset register.
(ii) A motor car was purchased on 1 October 20X4 and correctly recorded in the nominal
The vehicle has not been entered in the non-current asset register.
(iii) Offi ce equipment was purchased during 20X4, and entered on the non-current asset register but not in the nominal ledger. Until the omission can be investigated fully, its cost is deemed to be the difference between the balances on the non-current asset reg-ister and the nominal ledger at 31 December 20X4 (prior to charging depreciation for the year).
(iv) Depreciation for 20X4 is to be charged as follows:
Motor vehicles 25% per annum straight line on an actual time basis
Plant and machinery 10% per annum straight line, with a full year’s depreciation in the year of purchase
Offi ce equipment 10% per annum reducing balance, with a full year’s depreciation in the year of purchase
Requirements
(a) Insert the balances at 31 December 20X4 for cost and depreciation to date on the three non-current asset accounts in the nominal ledger (prior to the charging of depreciation for 20X4).
Motor vehicles $
List price Less : 20%
Add : sales tax 17.5%
Add : Cost of painting name
Amount to add to non-current asset register
ACCOUNTING FOR NON-CURRENT ASSETS 169 FUNDAMENTALS OF FINANCIAL ACCOUNTING
Plant and machinery Cost ($) Accumulated depreciation ($)
Balance as per nominal ledger
Less: Disposal
Offi ce equipment
Revised nominal ledger balances Cost ($)
Accumulated
depreciation ($) Carrying amount ($)
Motor vehicles
Plant and machinery
Offi ce equipment
Revised non-current asset register
(b) Insert the depreciation for each class of non-current asset for 20X4.
Depreciation for 20X4
Motor vehicles $
(rounded)
Plant and machinery
Offi ce equipment
ACCOUNTING FOR NON-CURRENT ASSETS
REVISION QUESTIONS C2 170
Question 5
Your organisation maintains a non-current asset register that contained the following details at 1 April 20X7:
Buildings are depreciated at 2.5 per cent per annum on cost. The cost of small tools is esti-mated annually, the value at 31 March 20X8 being $800. Plant is depreciated at 7.5 per cent per annum on cost, and offi ce equipment is depreciated at 7.5 per cent per annum on cost.
During the year ended 31 March 20X8, the following transactions occurred:
(i) Machine E was purchased by cheque for $17,000.
(ii) Machine C was sold for $13,000 to A Jones, on credit.
(iii) The computer memory was upgraded by the manufacturer at a cost of $2,000.
(iv) The scanner was repaired at a cost of $300.
(v) Machine F was purchased by cheque for $42,300 including sales tax at 17.5 per cent. The purchase price included delivery and installation of $1,200 plus sales tax, and a 1-year maintenance contract of $2,000 plus sales tax.
(vi) The total on the non-current asset register at 1 April 20X7 was compared with the ledger accounts, and it was discovered that one of the printers had been passed to a supplier in part-payment of his debt during December 20X6, but had never been removed from the non-current asset register. The cost of the printer was $400 and depreciation of $200 had been charged up to 1 April 20X6.
Notes :
1. Ignore sales tax on all items except for those in transaction (v).
2. The organisation’s policy is to charge a full year’s depreciation in the year of purchase.
ACCOUNTING FOR NON-CURRENT ASSETS 171 FUNDAMENTALS OF FINANCIAL ACCOUNTING
Requirements
(a) Insert the fi gures in the non-current asset accounts (at cost) and the accumulated depreciation accounts for each of the above categories of non-current asset, commenc-ing with the totals in the non-current asset register on 1 April 20X7. Make entries for additions, disposals, adjustments and depreciation for the year ended 31 March 20X8.
Ledger Accounts
ACCOUNTING FOR NON-CURRENT ASSETS
ACCOUNTING FOR NON-CURRENT ASSETS ________. The purpose of depreciation is to ___ the cost of a non-current asset over its _________ and thus match the ___ of an asset in a period with the ____________.
It is an example of the application of the ___ convention.
(b) A transport company started business on 1 January 20X7 and purchased truck A for
$80,000. Truck A was destroyed in a road accident on 1 March 20X8 and the insur-ance company paid out $60,000 to the transport company.
On 1 April 20X8, truck B was purchased for $90,000.
On 1 July 20X8, car C was purchased for $20,000.
On 1 August 20X9, car C was traded in for car D, which cost $25,000, less a part-exchange allowance on car C of $15,000.
The depreciation policy of the company is:
● depreciate trucks at 40 per cent each year on a reducing-balance basis;
● depreciate cars at 25 per cent each year using a straight-line basis;
● assume a residual value for cars of 10 per cent of the original cost;
● if a vehicle is owned for part of a year, calculate depreciation according to the number of months for which the vehicle is owned.
The year end of the company is 31 December.
Including entries for each relevant year, and working to the nearest $, write up the fol-lowing accounts using the ledger accounts provided.
Motor vehicles at cost
ACCOUNTING FOR NON-CURRENT ASSETS
REVISION QUESTIONS C2 174
Accumulated depreciation on motor vehicles
20X7 $ 20X7 $
Dec. Balance c/d Dec. Depreciation charge – Income statement
20X8 20X8
Jan. Balance b/d
Dec. Balance c/d Dec. Depreciation charge – Income statement
20X9 20X9
Jan. Balance b/d
Dec. Balance c/d Dec. Depreciation charge – Income statement
Disposal of motor vehicles
20X8 $ 20X8 $
20X9 20X9
ACCOUNTING FOR NON-CURRENT ASSETS 175 FUNDAMENTALS OF FINANCIAL ACCOUNTING
Workings: Depreciation
Year acquired Truck A Truck B Car C Car D Total ($)
20X7 20X8 20X8 20X9
($) ($) ($) ($)
80,000 90,000 20,000 25,000
Depreciation charge 20X7
Depreciation charge 20X8
Written back on disposal
Depreciation charge 20X9
Written back on disposal
Balances c/d
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177
Solution 1
1.1 Answer: (D)
The carrying amount of the disposed asset needs to be deducted from the non-current asset register. The asset was sold for $1,250 less than its carrying amount, thus its carrying amount must have been $4,000 $1,250 $5,250.
The balance can be calculated as follows:
$
Balance on the register 67,460
Less: carrying amount of the disposed asset (5,250) 62,210
1.2 The profi t or loss on disposal is the difference between the carrying amount at the