It is also worth noting that any of the items of either operating expense or income can be the missing item for such an item is the balancing figure when we prepare a complete ledger account. it is worth noting that balances carried down (bal c/d) is a business transaction for it carries a monetary value and as we had discussed in level one of this accounting tutorial series, any activity that can be assigned a monetary value is referred to as business transaction. The missing item in the respective expense and income accounts is determined by simply considering all the accounting entries related to that particular operating expense or income which include balance brought forward, cash paid or received, closing figure to profit and loss account and more importantly the balance carried down (bal c/d). Whereas, if the income account has a credit closing balance brought down, it is a case of income in advance. On the other hand if the income account has a debit closing balance brought down, it is a case of accrued income. Whereas, if the expense account has a credit closing balance brought down, it is a case of accrued expense. Such that, if the expense account has a debit closing balance brought down, it is a case of prepaid expense. This items are arrived at by considering the balance brought down at the end of the financial period in the respective operating expense account or operating income account. In this chapter, the focus was establishment of missing items in both the operating expense and operating income accounts which form either prepaid and accrued expenses or accrued and income in advance.
Ii) Prepare closing statement of financial position/balance sheet as at 31/12/17Ĭhapter four was a furtherance of the end of the year adjustments. Its original cost was $100,000 and the accumulated depreciation at the time of sale/disposal was $15,000. Iv) one of the old motor vehicle was disposed at $75,000 on cash. Iii) purchase of new plant and equipment for $200,000 on cash and two motor vehicles at a total cost of $300,000 by check Ii) Depreciation rate for plants and equipment be 5% per annum and the other non-current assets be depreciated at the rate of 10% on reducing balance. ltd management invited an asset valuation agent who recommended the following that all non-current assets be revalued at 10% of the net book value The opening statement of financial position of Your co. Ratable depreciation policy applies and the rate of depreciation pa is 10% per cent at cost. ltd provided you with the following transactional information for its Properties, Plants and Equipment (PPE)ġst/1/2018 Bal b/f-motor vehicles $122,000 machines $520,000 office equipment $300,000Ģnd/1/2018 purchased three motor vehicles at $150,000 each and paid by checkġst/7/2018 purchased office equipment amounting to $200,000 on cashġst/7/2018 disposed one machine which initially had cost $120,000. In other words, the matrix incorporates all types of PPE the firm has and of course it will vary from one firm to the other. It is a detailed explanation of causes of change in carrying amount of PPE at the end of the financial period. PPE schedule is a matrix that summarizes all transactions associated with PPE. At this level, the focus will be on PPE schedule preparation. It is advisable as an entrepreneur/learner to read the IAS-16 document for there is a lot of information pertaining these nature of assets. The key issue of accounting for PPE as guided by IAS-16, is to recognize the assets thereof, determination of their Net Book Value (NBV) also referred to as Carrying Amount (CA), depreciation charges, revaluation and any impairment losses. The main objective of IAS-16 is to guide how non-current assets ( also referred to as properties, plants and equipment-PPE) is maintained in the books of account for the sake of users of financial statement such as investors who wish to discern information about the organization’s investment in its non-current assets and any change occurring over the years.
Non-current asset accounting treatment is governed by International Accounting Standard (IAS) number 16. The subject of non-current assets is wide and its accounting treatment is diverse. Properties Plants And Equipment (PPE) Schedule
0 kommentar(er)
