The following trial balance has been extracted from the books of ABC Co. as at 30 June 20X8: Plant and machinery 112660 Office furniture and equipment 80000 Accumulated depreciation -plant and machinery 24610 Accumulated depreciation-office furniture and equipment 9060 Inventory 25600 Petty cash 1500 Accounts receivable 13960 GST paid 67300 Accounts payable 15200 GST collected 83000 Bank (overdraft) 11230 Sales 831600 Commission income 5200 Cost of goods sold 555860 Advertising- products 3090 Salaries-office staff 109530 Light and power 11800 Rent expense 72000 Insurance 11310 Postage and stationery 9150 Repairs and maintenance 10020 Bad debts 3060 Discount allowed 1040 Drawings 13620 Capital 121600 1101500 1101500 The following adjustments are required as at 30 June 20X8: Inventory on hand as per stock take 30.6.20X8 $27600 Salaries to be accrued $550 Insurance prepaid $1050 Write-off of a further bad debt inclusive of GST is required $836 Depreciation to be provided: · plant and machinery · office furniture and equipment $12850 $11250 plss calculate Trading and profit and loss accounts as they would appear in the general ledger Adjusted trial balance plss send the same within 30 mi
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
The following
|
Plant and machinery |
112660 |
|
|
Office furniture and equipment
|
80000 |
|
|
|
|
24610 |
|
Accumulated depreciation-office furniture and equipment
|
|
9060 |
|
Inventory |
25600 |
|
|
Petty cash |
1500 |
|
|
|
13960 |
|
|
GST paid |
67300 |
|
|
Accounts payable |
|
15200 |
|
GST collected |
|
83000 |
|
Bank (overdraft) |
|
11230 |
|
Sales |
|
831600 |
|
Commission income |
|
5200 |
|
Cost of goods sold |
555860 |
|
|
Advertising- products |
3090 |
|
|
Salaries-office staff |
109530 |
|
|
Light and power |
11800 |
|
|
Rent expense |
72000 |
|
|
Insurance |
11310 |
|
|
Postage and stationery |
9150 |
|
|
Repairs and maintenance |
10020 |
|
|
|
3060 |
|
|
Discount allowed |
1040 |
|
|
Drawings
|
13620 |
|
|
Capital |
|
121600 |
|
|
1101500 |
1101500 |
The following adjustments are required as at 30 June 20X8:
|
Inventory on hand as per stock take 30.6.20X8 |
$27600 |
|
Salaries to be accrued |
$550 |
|
Insurance prepaid |
$1050 |
|
Write-off of a further bad debt inclusive of GST is required |
$836 |
|
Depreciation to be provided: · plant and machinery · office furniture and equipment |
|
|
$12850 |
|
|
$11250 |
plss calculate
- Trading and
profit and loss accounts as they would appear in the general ledger - Adjusted trial balance
plss send the same within 30 mins
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