Reference no: EM133082680
BSBFIA401 Prepare financial reports - Sydney Metro College
Assessment Task: Asset register project
Task summary
For this assessment task you are required to prepare journal entries according to standard practice to record the purchase of assets, depreciation expense, and accumulated depreciation.
Instructions
Carefully read the following:
Andrew, the owner of Andrew's Slabs, purchased a bench planer (Asset No. 346) from Mullum Machineryon 1st July 2016 that cost $18,000. It is expected to produce 5,000 items during its life in the workshop. At the end of its working life, its scrap value will be $1,000.
The machine has been operating for two years. Its production in each of those years has been 800 and 1000 units respectively. It is being depreciated on the units of production method. Balance day is 30 June each year.
On the 1st of July 2016, Andrew also purchased a standing drill (Asset No. 348) from Danny's Drills. It cost $5,000 and will be used daily in the Workshop for a variety of purposes. The equipment has a useful life of 4 years and a residual value of $800. The straight-line deprecation method is used for this asset.
Complete the following activities in the Asset Register Worksheet:
1. Prepare journal entries according to standard practice to record the purchase of assets, depreciation expense and accumulated depreciation for the years ended 30 June 2017 and 2018. Show your workings for the depreciation calculation.
2. Prepare asset registers for the two items.
3. Prepare the correcting journal entries for the following:
a) Sold goods on credit to Lennox Furniture for $3,300 (including GST of $300) and incorrectly posted the item from the Credit Sales Journal by debiting Kingscliff Kitchens.
b) Timber worth $880 (including GST) purchased on credit from Shady Timber Mill was incorrectly debited to Purchases.
c) A cheque for $1,210 received for a kitchen bench slab was incorrectly posted from the cash receipts journal as a credit to the Sales account.
d) The bank column of the cash receipts journal was over added by $30, but the individual receipts were correctly entered and posted.
4. Calculate the following, taking into consideration the relevant procedures set out in the company's Financial Policy and Procedures:
At the end of March, there is an overdue debt of $550 (including GST) that has been outstanding for 92 days. The amount is owed by Domestic Bliss for furniture renovation.
The debt was transferred to a debt collection agency, but the debt was not paid.
Record these transactions in the table provided in the Worksheet.
Show the general ledger entries you would make to record this bad debt.
At the end of June, there is a debt of $990 that has been owed for 65 days. The amount is owed by Tables and Chairs. How would you show this on the end of year reports?
Attachment:- Prepare financial reports.rar