Provide the journal entries necessary to account

Assignment Help Accounting Basics
Reference no: EM131035338

Question no 1

On 15 sep 2012 tweed ltd acquired land on a remote island at a cost 100000. The land was held for future development as a resort when transport to the island was made available .At each reporting date ,Tweed ltd made the following assessments of the net selling price of the land and the value of land to the business if kept for future use:

Date                                            net selling price                            vale in use

31 December 2012                 110000                                     130000                      

30 June 2013                        90000                                       120000      

31 December 2013                 80000                                       90000

30 June 2014                        120000                                     110000

Required

(a) At what amount should the land be recorded in the statement of financial position (balance sheet) of Tweed Ltd for each reporting date ?

(b) Assume that on 30 september 2014 the government cancelled all the plans to provide transport to the island. There is no prospect of resort of selling the island . The cost of Tweet ltd of developing transport exceeds the present value expected future benefits of operating the resort. How should Tweet Ltd account for this event.?

Question no 2

Wastewater limited acquired an item of plant on 1 July 2012 for 3660000.when the item of plant was acquired ,it was initially assessed as having life of 10000 hours .During the reporting period ending 30 June 2013 then plant was operated for 3000 hours.

At 1 July 2013 the plant had a remaining useful life of 7000 hours .On 1 July 2013 the plant underwent a major upgrading costing 234600. Management believes that this upgrade will add a further 2000 hours of operating time to the plants life. During the reporting period ended 30 June 2014 the plant was operated for 4000 hours.

On 1 July 201 4 The plant underwent a further major upgrade ,the cost which amounted to 344900,and this added the further 3100 hours operating life. During the reporting period ending 30 June 2015 the plant was operated for 3800 hours.

Required

Prepare all the journal entries that wastewater limited would prepare for the years ending 30 June 2013,30 June 2014 and 30 June 2015 to account for the acquisition expenditure and depreciation on the assets.

Question no 3

Petersen Ltd has the following land and building in its financial statements as at 30 June 2014 .

                                                                                                                         $

Residential land ,at cost                                                           1000000

Factory land ,At valuation 2011                                                 900000

Building ,at valuation 2010                                                        800000

Accumulated depreciation                                                         (100000)

At 30 June 2014, the balance of the revaluation surplus is $400000,of which $300000 relates to the factory land and $100000 to the buildings. On this same date , independent Valuation of then land and building are obtained. In relation to above assets ,the assessed fair value at 30 June 2014 are :

                                                                                                                       $

Residential land ,previously recorded at cost                                            110000

Factory land ,previously revalued in 2011                                                   700000

Buildings ,previously revalued in 2010                                                         900000

Required

Provide the journal entries to account for the revaluation on 30 June 2014. Petersen Ltd classifies the residential land and the factory land as different classes of assets.

Question no 4

Nat ltd purchases a 100 per cent interest in Angourie Ltd . The cost of the acquisition is $1400000 plus associated legal cost of $70000.
As at the date of acquisition , the statement of financial position of Angourie ltd shows.

                                                                                           $                    $                       $

Assets

Current assets

Cash                                                                               20000

Accounts receivable                                     80000

Provisions for doubtful debt                            (10000)         70000

Inventory                                                                       100000

Total Current assets                                                                   190000

Non current assets

Land and building at cost                              850000

Accumulated depreciation land and building       (150000)      700000

Pland and equipment                                    510000

Accumulated dep plant and equipment             (100000)       410000

Total non current assets                                                           1110000

Total assets                                                                                 1300000

 Liabilities

Current liabilities

Accounts payable                                                           90000

Band overdraft                                                               20000

Total current liabilitis                                                                 110000

Non current liabilities

Bank loan                                                                      190000

Total liabilities 300000

 NET ASSETS          =1000000

Additional information

(a) The asssets and liabilities of Angourie ltd are fairly stated except land and buildings , which have a fair value of 800000$.

(b) Angourie Ltd has a brand name that is not recognised on the statement of financial position ant that has a fair value of $50000.

(c) There are no contingent liabilities.

Required

(a) Determine , for accounting purpose , the amount of goodwill tha has been acquired by Nat Ltd.

(b) Why do you think that Nat Ltd would have been prepared to pay for goodwill?

(c) Can Nat Ltd revalue the goodwill upwards in as subsequent period ?

Question no 5

On 1 July 2014 Kiama Ltd issues $5 million in five years debentures that pay interest each six months at coupon rate 8 per cent . At the time of issuing the securities , the market requires a rate of 10 per cent . The interest expenses is calculated using the effective interest metod.

Required

(a) Determine the issue price.

(b) Provide the journal entries at
(1) 1 July 2014
(2) 30 June 2015
(3) 30 June 2016

Question no 6

On 1 July 2015, Flyer Ltd decides to lease an aeroplane from finance Ltd . The term of the lease is 20 years . The implicit interest rate in the lease is 10 per cent .It is expected that the aeroplane will be scrapped at the end of the lease term. The fair value of the aeroplane at the commencement of the lease is 2428400$ . the lease is non cancellable ,returns the aeroplane to finance Ltd at the end of the lease , and requires a lease payment of 300000$on inception of the lease (on 1 July 2015) and the lease payments of 250000$ on 30 June each year(starting 30 June 2016) . There is no residual payment required.

Required

(a) Provide the entries for the lease in the books of Flyer Ltd as at 1 July 2015.

(b) Provide the entries for the lease in the books of Finance Ltd as at 1 July 2015.

(c) Provide the journal entries in the books of Flyer Ltd for the final year of the lease (that is ,the entry in 20 years time)

(d) Provide the journal entries in the books of Finance Ltd for the final year of the lease (that is ,the entry in 20 years time)

Question no 7

Shelley Ltd pays its salaries fortnightly in arrears . The next pay date is Thursday 2 July . The fortnightly salary is $30000 of which $10000 is retained to pay then Australian Taxation Office on behalf of the employees .Payments to the ATO are made every second Monday , with the next payment being made on Monday 6 July. Shelley Ltd reporting period ends on 30 June .

Required
Provide the journal entries in the books of Shelley Ltd for:
(a) 30 June
(b) 2 July
(c) 6 July

Question no 8

Brighton Ltd issue a prospects inviting the public to subscribes for 10 Million ordinary shares each $2 each. The terms of then issue are at $1 is to be paid on application and the remaining $1 within in 1 month of allotment .

Application are received for 12 million shares during july 2015 . The directors allot 10 million shares on 5 august 2015. All the applicants receives share an a pro tara basis . the amounts payable on allotment arfe due by 5 september 2015.
By 5 september 2015 the holders of two million shares have failed to pay the amounts due on allotment . The directors forfeit the shares on 10 september 2015. The shares are resold on 15 september as fully paid . An amount of 1.80$ per share received .

Required

Provide the journal entries necessary to account for the above transactions and events.

Please provide the reference as well thanks. and it should be in havard style

Reference no: EM131035338

Questions Cloud

Domestic and international airline consolidation : Airline mergers have increased in the twenty first century. Cite one recent US or European example and discuss the forces driving both domestic and international airline consolidation.
Management to conduct a survey of employee satisfaction : Suppose you are an HR professional who convinced your company's management to conduct a survey of employee satisfaction. Your budget was limited, and you could not afford a test that went into great detail. Suggest numerous ways you might begin to ma..
Describe the relationship-unfair to employers : Have you ever been part of an agency relationship as an employee, employer, etc.? Describe the relationship, even if it was implied. Also, explain why the doctrine of respondeat superior is fair or unfair to employers.
What methods of assessment did your organization use : Let's consider the different methods of assessment and how they are used in organizations. Think about a position recently filled in your organizations. What methods of assessment did your organization use? Of those methods use, which ones were relie..
Provide the journal entries necessary to account : Provide the journal entries necessary to account for the above transactions and events and provide the journal entries to account for the revaluation on 30 June 2014. Petersen Ltd classifies the residential land and the factory land as different c..
Factors that will be taken into consideration by the ato : LAWS20060 Taxation Law of Australia - Discuss the factors that will be taken into consideration by the ATO in determining if Jojois conducting a business or not and their likely decision.
Words for the dissertation on the topic : How much will cost to write 6000 words for the dissertation on the topic:"The positive influence of cultural diversity at the workplace"?
Find a significant increase in mean life : Vigorous exercise helps people live several years longer (on the average). Whether mild activities like slow walking extend life is not clear. Suppose that the added life expectancy from regular slow walking is just 2 months. A statistical test is..
Midst of a union fight and the employees : Zellico, Inc., is in the midst of a union fight and the employees eventually go on strike. The union later gives an unconditional request for reinstatement to the employer, but the employer refuses to reinstate them and give employees a wage incre..

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  Hci inc understated its ending inventory by 6000 in 2006

hci inc. understated its ending inventory by 6000 in 2006. assume hci inc. has a 25 percent income tax rate. which of

  The credit balance instead been a debit balance

The credit balance instead been a debit balance.

  Respond to the following the merits of gantt charts lies in

respond to the following the advantage of gantt charts lies in their linkage to the project schedule baseline. explain

  Impairment in value prior to transfer

Assuming no impairment in value prior to transfer, assets transferred by a parent company to another entity it has created should be recorded by the newly created entity at the assets:

  Tomas and saturn are partners who share income in the

tomas and saturn are partners who share income in the ratio of 31. their capital balances are 40000 and 60000

  Police plan to enforce speed limits near the local

police plan to enforce speed limits near the local elementary school by using radar traps at two different locations

  What events create permanent differences

What events create permanent differences? What effect do these have on the determination of income taxes payable? Of deferred income taxes?

  Compare and contrast the gasb standards setting process

Discuss the rationale for GASB requiring raw sets of financial statements, each with a different measurement focus and basis for accounting for government activities. Do you agree with this rationale or not? Explain why.

  Determining owner capital account

Also, owner withdrawals during 2009 totaled $48,000. Assuming no other changes to owner's capital, the balance in the owner's capital account at the end of 2009 would be:

  Thomas company has total fixed costs of 360000 and variable

thomas company has total fixed costs of 360000 and variable costs of 14 per unit. if the unit sales price is reduced

  Nitkse company purchased at a cost of 10500 and used 3500

nitkse company purchased at a cost of 10500 and used 3500 kg of materials during may. nitkses standard cost of

  Would you recommend the acceptance of this proposal why or

clark paints the production department has been investigating possible ways to trim total production costs. one

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd