A company bought a new laptop for Engr. Reyes – their new employee. The laptop was advertised to have an economic life of 8 years and at that point, it would cost 10% of its original price. Find the book value of the asset at its 4th year if it cost P35,000 initially.
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.
A company bought a new laptop for Engr. Reyes – their new employee. The
laptop was advertised to have an economic life of 8 years and at that point, it
would cost 10% of its original price. Find the book value of the asset at its 4th year
if it cost P35,000 initially.
2. A machine has first cost of P13,000, an estimated life of 15 years, and an
estimated salvage value of P1,000. Using the straight-line formula, find:
a.) the annual depreciation charge
b.) the annual depreciation rate expressed as a percentage
c.) the book value at the end 9 year.
3. A construction company decided to acquire a new delivery truck costing
P1,200,000. The said truck is projected to last for 12 years and at that point it
would cost P140,000. Find the book value at its 7th year if it is
sinking fund method at i=6.5%.
4. A plant erected to manufacture socks has a first cost of P10,000,000 with an
estimated salvage value of P100,000 at the end of 25 years. Find its appraised
value to the nearest P100 by the sinking fund method, assuming an interest rate
at 6% at the end of:
a.) 10 years
b.) 20 years
5. The relief holder of a gas set was from Japan CIF Manila at P280,000.
Brokerage, bank charges and arrestre cost P500. Foundation and installation
costs amount to P28,000, and other incidental expenses were P25,000. After 20
years, the salvage value of the equipment is expected to be P50,000. Using
straight line depreciation, find the appraisal value of the equipment at the end of:
a.) 5 years b.) 15 years
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