Test%202%20solution%20-%20no%20marks

Test%202%20solution%20-%20no%20marks - Test 2 SUGGESTED...

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Question 1 1.1 (4 marks) Depreciation on new equipment: (R100 000 – R10 000) ÷ 6 x 4/12 = R5 000 Depreciation on older equipment: R80 000 ÷ 2 = R40 000 Total depreciation expense: R5 000 + R40 000 = R45 000 1.2. (2 marks) Residual value is the estimated selling price today of the asset if it were in the same condition as it is expected to be at the end of its useful life, less estimated costs to sell 1.3 (1 mark) R450 000 – R80 000 – R45 000 = R325 000 1.4 (3 marks) 31/3/10 DR Impairment expense 10 000 CR Accumulated impairment: Equipment 10 000 Workings Carrying value: R325 000 Recoverable amount: Higher of VIU and NSP VIU = R310 000 NSP = R315 000 RA higher of VIU and NSP = R315 000 Impairment = R10 000 2. (3 marks) 31/3/10 DR Bank (R12 000 x 20%) 2 400 DR Bad debts expense (R12 000 x 80%) 9 600 CR Trade receivables R12 000 If done using two journal entries, for both credits to trade receivables 3.1 (3 marks) DR Bad debts expense 16 400 CR Allowance for doubtful debts 16 400 (R340 000 – R12 000) x 5% 3.2 (2 marks) Zuzu’s Petals: Statement of Financial Position (extract) as at 31 March 2010 Current assets: R Trade receivables (R340k – R12k – R16.4k) 311 600
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Test%202%20solution%20-%20no%20marks - Test 2 SUGGESTED...

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