BSBFIA401 Prepare financial reports Assignment, Australian

Prepare financial reports Assignment -

TASK 1 -

1. Explain the Accounting Entity Assumption.

2. What is Fixed Asset register and why does a company need to maintain an assets register?

3. Explain the function of a journal in the accounting process.

4. What is the journal entry used if the company sold an asset with a loss?

5. Explain unearned income with an example. When should a company recognize income?

6. Give two more examples of the balance day adjustments a company should record before issuing the final financial report at end of accounting periods?

7. Why would a business determine an amount for "Doubtful Debts" and outline the steps that could be taken to calculate the allowance?

8. Prepare the adjustment entry as of 30/06/2012 under the following:

A. On 27 of June 2012, the company paid last week's wage. Wages that are due and not paid:

  • 28th of June 1200
  • 29th of June 1450
  • 30th of June weekend, no wages

B. Rent paid on 1/12/11 for one year $12,000 net of GST, the company accountant recorded all payment as expense on 1/12/11.

C. The company is required to issue a bank guarantee for one year, bank withheld $20,000 on 31/12/2011 from the company bank account with interest of 4.5% that will be calculated monthly and will be paid at the maturity date.

D. On 30/04/12, the company signed a monthly maintenance service contract for $500 each month; the company policy is to receive the 1st six months in advance. The company received $3000 on 30th of April 2012. Company accountant recorded the following entry on the 30th of April:

Date

Details

Dr

Cr

30/04/12

Cash at Bank

$3000



Income received in advance


$3000

E. According to the balance sheet, the inventory was $223,500. At the end of the financial year stock take, you have been advised that the inventory value is only $210,000.

F. On 30/06/2012, the company aged receivables which have a total of $306,400. The company estimated 2% of 90 days receivable and 10% of over 90 days will not be able to be collected.

Aged Receivable Summary 30/6/2013

Total Due

0-30 days

31-60 days

61-90 days

91-120 days

$311,400

$220,000

$60,000

$18,000

$16,400

Q9. Prepare journal entries for disposal of fixed assets

  • Company sold Equipment worth $120,000 for $50,000. Depreciation recorded at the rate of 20% yearly for 3 years.
  • Motor vehicle purchased for $80,000 was sold for $20,000 after usage of 2 years at rate of 25% yearly

TASK 2 -

Deprecation of Assets:

Straight line method: On 1/12/ 2011, a company purchased a machine costing $1,750. It is expected to have 5 years estimated useful life and value of $250 at the end of the 5th Year

  • Prepare the deprecation schedule for the life of the asset.
  • Record the depreciation journal entries at the end of financial year for year 1 only.

Double -Declining balance method: A business purchased cleaning equipment in 2008 for $8,500 and is depreciated by the double declining method for an expected life of 12 years. Original salvage value was estimated to be $2,500 at the end of 12 years.

  • Prepare the deprecation schedule for the life of the asset.
  • What is the book value of the cleaning equipment at the end of 2014?

Sum of the Digits method: A machine costing $5,000 was purchased on 01/07/2011. The expected resale value at the end of its five-year useful life is $1,000.

  • Prepare the depreciation schedule for the life of the asset.
  • Record the depreciation journal entries at the end of financial year 30/06/2012.

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