Page 1 of 2 STELLA MARIS POLYTECHNIC UNIVERSITY PRINCIPLES OF ACCOUNTING II (ACCT 102) ASSIGNMENT # 1 ATTEMPT ALL QUESTIONS ALL QUESTIONS MUST BE ANSWERED IN A COPY BOOK. 1. The following trial...

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STELLA MARIS POLYTECHNIC UNIVERSITY
PRINCIPLES OF ACCOUNTING II (ACCT 102)
ASSIGNMENT # 1

ATTEMPT ALL QUESTIONS
ALL QUESTIONS MUST BE ANSWERED IN A COPY BOOK.
1. The following trial balance was extracted from the books of Collins; a sole
trader, as at 31 December 2016:
Debit
US$
Credit
US$
Inventories, 1 January XXXXXXXXXX,000
Bank 151,680
Cash in hand 14,080
Payables 336,200
Receivables 195,280
Commissions Received 70,000
Insurance Expense 7,680
Bad Debts Expense 1,040
Returns Inwards 2,240
Returns Outwards 15,680
Sales 2,939,920
Furniture 44,160
Telephone Expense 1,360
Rent Expense 4,040
Salaries Expense 113,480
Electricity Expense 3,640
Purchases 2,739,400
Postages Expense 5,520
Advertising Expense 5,080
Capital 644,960
Motor Vans 37,080
Premises 200,000
4,006,760 4,006,760
Additional Information:
(i) The Inventories as at 31 December 2016 was US$431,480
(ii) Write off depreciation as follows: Premises at 5% Motor van US$8,000
Furniture at 10%
(iii) Prepaid rate is US$600 accrued telephone is L$880
(iv) Make provision of US$12,000 for i
ecoverable and doubtful debts.
Requirement: You are required to prepare
a) Statement of profit or loss for the year ended 31 December 2016
) Statement of financial position as at 31 December 2016.
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2. The table below shows the data relating to three employees of Westwoods
Ltd for the month ending 31 December 2016
Name Standard hours
expected
Actual hours
worked
Rate per hour($)
Satta XXXXXXXXXX
Massa XXXXXXXXXX
Deddeh XXXXXXXXXX
Included in the conditions of service of Westwood Ltd for the above named
members of staff are the following:
a) Rent allowance of 10% of the basic salary
) Transportation allowance equal to 20% of the basic salary
c) Social security contributions is 5% and
d) Personal income tax is at a rate of 15%.
You are required to:
i. Prepare Payroll work sheet, showing the basic pay, deductions,
and net salary of each staff under the Halsey Premium incentive
plan of remuneration.
ii. Prepare journal entries to record the associated accrued payroll
cost and the subsequent payment.
3. Kamara Incorporated purchased one plant and machinery on 1 January
2014 for US$ 200,000. It has an estimated useful life of five years with a
salvage value of US$40,000
You are required to:
i. Calculate the depreciation charge and accumulated
depreciation for each year from 1 January 2014 to 31 December
2016 using the straight-line method.
ii. Calculate the depreciation charge and accumulated
depreciation for each year from 1 January 2014 to 31 December
2016 using the reducing balance line method.
4. Answer the below questions
a) State TWO characteristics of non-cu
ent assets.
) Give FOUR examples of non-cu
ent assets
c) List THREE components of the cost of a non-cu
ent asset
d) State two methods for depreciating non-cu
ent assets
5. Clearly distinguish between the following terms
a) Payslip and payroll
) Gross pay and Net pay
c) Bonus and Overtime
Answered Same DayApr 12, 2022

Solution

Sandeep answered on Apr 13 2022
9 Votes
Ans 4 a)
Two character sticks of non-cu
ent assets - Noncu
ent assets are defined as assets which have useful or productive life of more than 12 months or 1 year. These assets are usually in the nature of fixed assets or long term which are used for producing goods/products for selling and realising cash. Such assets have to be depreciated over their useful life which is predetermined by the management of company in consultation with the technical department or as established by the regulatory department.
Two important character sticks of Non-Cu
ent assets –
1) These are assets which are used beyond 1 accounting period form business purposes for deriving probable future economic benefit from using them in production process and selling the output.
2) Unlike Cu
ent assets these cannot be converted into cash readily because of long term commitment.
Ans 4 b)
FOUR examples of non-cu
ent assets –
Long term Investment
Tangible Fixed assets – Property, plant and equipment, Computers, Trucks, Building
Goodwill
Intangibles assets – Patents, Copyright, IP rights...
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