CI Ltd purchased a plant on 1 April 2010 for 39600 GST incl At that time the

Ci ltd purchased a plant on 1 april 2010 for 39600

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Question 25CI Ltd purchased a plant on 1 April 2010 for $39,600 (GST incl). At that time the plant had anestimated useful life of five years and an estimated residual value of $6,000. The plant wasdepreciated on a reducing basis at the rate of 40%On 5 October 2013 the plant was considered obsolete and the company sold it for cash of $2,200(GST incl).Required:Record the general journal entries necessary to record the use of the plant until 5 October and itssubsequent disposal.Question 26Canyon Industries Ltd purchased a plant & equipment item on 1 April 2009 for $36,000. Theequipment has an estimated useful life of five years and an estimated residual value of $6,000. Thecompany uses the straight line method of depreciation.On 30 June 2010 Canyon Industries reduces the useful life of the item of plant to two more years.The residual value is unchanged.Required:Calculate the depreciation for the 30 June 2011 financial yearQuestion 27The owner of a small business provides you with the following information:Assets at start $60,000, Liabilities $20,000Assets at end $80,000, Liabilities $25,000During the year the owner contributed additional capital of $4,000 During the year the owner withdrew $10,000 Required:Calculate the profit/loss for the business for the year? 12
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Question 28As a result of an industrial accident, Tandy Ltd has contaminated the land on which it operates. TandyLtd has a widely published environmental policy in which it undertakes to clean up all contaminationthat it causes. The entity has a record of honouring this policyShould the clean-up costs be recorded as a liability?Question 29A business entity had beginning inventory of $360,000 and sales of $1,640,000 (90% on credit) for aperiod. Cost of goods available for sale was $1,220,000 while the gross profit margin was 60% ofsales. Calculate the amount of ending inventory.Question 30Damages awarded against Tandy Ltd resulting from a court case decided on 26 June 2015. The judgeannounced that the amount of damages will be set at a future date, expected to be in September2015. Tandy has received advice from lawyers that the amount of damages could be anythingbetween $20,000 and $7 million.Should the damages be recorded as a liability?Question 31ABC LtdIncome StatementFor the year ended 30 June 2015$$Sales6,300,000Less Cost of Sales4,125,233Gross Profit2,174,767Add Miscellaneous IncomeGain on disposal motor vehicle5,000Commission Income10,000Interest Revenue24,00039,0002,213,767Less Operating ExpensesOperating Expenses1,372,264 13
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Depreciation motor vehicle 27,000 Depreciation equipment 72,000 Interest expense 91,845 1,563,109 Net Profit 650,658 Templeton Ltd Comparative Balance Sheets 30 June 2008 2007 $ $ Non Current Assets Land 500,000 500,000 Buildings 700,000 700,000 Equipment 1,129,000 720,000 Accumulated Depreciation (432,000) (360,000) Motor Vehicles 190,000 165,000 Accumulated Depreciation (51,200) (46,200) Total Non Current Assets 2,035,800 1,678,800
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