Titanium Ltd is a company that distributes sport equipment and was incorporated on 1 January 2019 The following information relates Titanium Ltd: Titanium Ltd EXTRACT FROM TRIAL BALANCE ON 01 JANUARY 2020 DEBIT $ CREDIT $ Land and Buildings (at cost) 1 000 000 Office equipment (at cost) 420 000 Accumulated depreciation on office equipment 70 000 Vehicles (at cost) 220 000 Accumulated depreciation on vehicles 49 500 Titanium Ltd EXTRACT FROM ACCOUNTING POLICY Property, Plant and Equipment Asset Measuremen t model Depreciation (method) Depreciatio n (write-off period) Expected residual value Land & buildings Revaluation Not applicable Not applicable Not applicable Office equipment Cost Straight-line 6 years None Vehicles Cost Straight-line 4 years 10% of cost Additional information: Land and Buildings were originally purchased on 01 January 2019 and have never been revalued. The company appointed a sworn appraiser, Aron Nandago, on 30 November 2020 to perform a revaluation. On this date, Aron estimated the fair value of the building at $ 1 300 000. All office equipment was purchased on 1 January 2019. During the current year, the company became aware that equipment with an original cost of $ 120 000 is no longer used. This equipment was sold on 30 June 2020 for $ 80 000. The company’s role delivery vehicle was also purchased on 01 January 2019. The rapid expansion of the company’s operations resulted in the need for an additional vehicle. The new vehicle was purchased on 1 October 2020 for $ 253 000. Required: A) Prepare the extracted statement of financial position as at 31 December 2020, showing only the property plant and equipment. Comparative figures are required?
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.
QUESTION 3
Titanium Ltd is a company that distributes sport equipment and was incorporated on 1 January 2019
The following information relates Titanium Ltd:
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Titanium Ltd EXTRACT FROM |
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DEBIT $ |
CREDIT $ |
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Land and Buildings (at cost) |
1 000 000 |
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Office equipment (at cost) |
420 000 |
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70 000 |
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Vehicles (at cost) |
220 000 |
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Accumulated depreciation on vehicles |
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49 500 |
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Titanium Ltd EXTRACT FROM ACCOUNTING POLICY |
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Property, Plant and Equipment |
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Asset |
Measuremen t model |
Depreciation (method) |
Depreciatio n (write-off period) |
Expected residual value |
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Land & buildings |
Revaluation |
Not applicable |
Not applicable |
Not applicable |
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Office equipment |
Cost |
Straight-line |
6 years |
None |
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Vehicles |
Cost |
Straight-line |
4 years |
10% of cost |
Additional information:
- Land and Buildings were originally purchased on 01 January 2019 and have never been revalued. The company appointed a sworn appraiser, Aron Nandago, on 30 November 2020 to perform a revaluation. On this date, Aron estimated the fair value of the building at $ 1 300 000.
- All office equipment was purchased on 1 January 2019. During the current year, the company became aware that equipment with an original cost of $ 120 000 is no longer used. This equipment was sold on 30 June 2020 for $ 80 000.
- The company’s role delivery vehicle was also purchased on 01 January 2019. The rapid expansion of the company’s operations resulted in the need for an additional vehicle. The new vehicle was purchased on 1 October 2020 for $ 253 000.
Required:
A) Prepare the extracted statement of financial position as at 31 December 2020, showing only the property plant and equipment. Comparative figures are required?
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