1. Prepare a spreadsheet with following columns. Assume company follows IFRS. DESCRIPTION LAND BUILDING MACHINE OTHER Determine the amounts that should be included in the Land, Building, and Machinery accounts. If the cost does not fall under one of these accounts, indicate the account it should be debited to in the “other” category. Show calculations. 2. Assume on January 1, 2021 they decided to trade their Machine for a NEW machine. As part of this trade, the company (Stuff Inc.) also paid $10,600 in cash. Assume that the old machine had a market value of $58,000 on January 1, 2021 (the date of the trade). The NEW machine has a market value of $68,650. Double declining balance Depreciation method was used for the old machine assuming an original useful life of 5 years. Show all calculations including Depreciation of the old machine, Prepare the journal entry on January 1, 2021 to record the trade.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
1. Prepare a spreadsheet with following columns. Assume company follows IFRS.
DESCRIPTION LAND BUILDING MACHINE OTHER
Determine the amounts that should be included in the Land, Building, and Machinery accounts. If the cost does not fall under one of these accounts, indicate the account it should be debited to in the “other” category. Show calculations.
2. Assume on January 1, 2021 they decided to trade their Machine for a NEW machine.
As part of this trade, the company (Stuff Inc.) also paid $10,600 in cash. Assume that the old machine had a market value of $58,000 on January 1, 2021 (the date of the trade). The NEW machine has a market value of $68,650. Double declining balance
Prepare the
![On January 1, 2019 Stuff Inc. acquired land with a very old building on it to build a new plant.
They made a $25,000 down payment and signed a non-interest bearing note for $300,000
that is due with 2 instalment payments of $150,000 each at the end of the next 2 years. An
interest rate of 10% is implicit in the purchase price.
On January 1, 2019 they paid their lawyer $1,300 to perform a title search on the property.
On January 15, 2019 they paid a local demolition crew $12,000 to demolish the existing
building. Stuff Inc. was able to recover $5,800 from materials salvaged.
They began construction on February 1, 2019 and construction was completed by August 1,
2019. They had everything ready to start operations on August 1, 2019.
On March 1, 2019 Machinery was purchased for $95,000 to manufacture "stuff". The
Machinery was purchased with discount terms 2/10 n 30. There was an additional delivery
fee of $500.
On January 20, the Municipality paid Stuff Inc. a grant of $25,000 to help with the construction.
The company also paid for the following additional expenditures during the year:
Landscaping, trees and shrubs (assume permanent in nature)
Storage costs (due to construction not completed as scheduled)
Machinery assembly and installation (on July 31)
Building construction costs
Interest costs for 2019 fiscal year covering period February 1 to Dec 31
(construction loan signed on February 1, 2019)
Insurance coverage for the building relating to a 18-month period
(Insurance coverage started and paid for on February 1, 2019)
Architects fees to help with the design of the building
18,750
3,700
3,600
515,000
10,620
4,880
5,950](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb14f0b73-9388-4659-aaf9-c492506194fc%2F93f40c04-401f-48e3-852e-be355ffbf8a8%2F75iczht_processed.png&w=3840&q=75)
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