Northrise University

30029 Kitwe - Ndola Dual Carriage Highway. P.O Box 240271, Ndola, Zambia.

ASSIGNMENT COVER SHEET

Student ID: 1905504

Student Name: Patrick Chibabula

Course Code: ACC205

Course Title: Financial Accounting 2

Instructor Name: Dr. Norman Kachamba

Essay/Assignment Title: Assignment 1

Due Date: 6th March 2020

Declaration:
I acknowledge that submitting this document binds me to the following:
To the best of my knowledge, I assert that no part of this assignment has been copied from the work of anyone else, be it another stude
or any other author or from any source except where due credit is given in the text below or has been written for me by someone else
except where the relevant instructors and authorities have explicitly permitted such collaboration .

SIGNATURE: P. Chibabula

Instructor’s Comments:

GRADE [ ]
 A) The depreciation table for the next five years using the straight line methord.

Data
 Cost of the machine = 66000
 Carring Value = 6000
 Useful life = 10years

Depreciation for each year

 Dep:  Accum:  Carrying

 Date  Details  Cost Charge Dep Value
 31/10/2008 Printing Machine  66000 6000  6000  600000

 31/10/2009 Printing Machine 60000  6000 12000  54000

 31/10/2010 Printing Machine  54000 6000  18000  48000

 31/10/2011 Printing Machine  48000  6000  24000  42000

 31/10/2012 Printing Machine  42000  6000  30000  36000

B) Formulatin a depreciation table for the next five years using the reducing balance

methord

Data
 Cost of the machine = 66000
 Carring Value = 6000
 Useful life = 10years
Depreciation rate;

Dep:  Dep:  Accum:  Carrying

 Date  Details  Cost Rate Charge Dep Value

 31/10/2008 Printing Machine  66000 14058 14058 51942

 31/10/2009 Printing Machine 51942 11063.646 25121.646 40878.354

 31/10/2010 Printing Machine 40878.354 5028.03754 30149.6835 35850.31646

 31/10/2011 Printing Machine 35850.31646 7528.5665 37678.25 28321.75

 31/10/2012 Printing Machine 28321.75 5947.5675 43625.8175 22374.1825

C) Formulatin a depreciation table for the next five years using the unit of production

balance methord

Data
 Cost of the machine = 66000
 Carring Value = 6000
 Useful life = 10years
 First we are going to start by calculating the cost per one unit of production and illustrate the

information in the table below.

Cost Per Unit of Production

Cost
 Unit Of Per  Dep:  Accum:  Carrying
 Date  Details Cost Production Unit Charge Dep Value

 31/10/2008 Machine 66000 15400000 0.0006 9240 9240 56760

0.0006
 31/10/2009 Machine 56760 13600000 8160 17400 48600
0.0006
 31/10/2010 Machine 48600 11200000 6720 24120 41880
0.0006
 31/10/2011 Machine 41880 12500000 7500 31620 34380
0.0006
 31/10/2012 Machine 34380 12500000 7500 39120 26880

As at 31 December 2008, Stargazer Limited owns a machine that originally

cost $77,000. The accumulated depreciation as at 31 December 2008 is
$64,000. Provide the journal entries for the disposal of the machine under
the following circumstance:
(a) It is discarded as scrap without any value
(b) It is sold at its carrying amount, $13,000
(c) It is sold for $20,000
(d) It is sold for $10,000
(e) It is exchanged with another machine. The trade in value of the old
machine is RM23,000 and the cost of the new machine is $55,000.
Therefore the informatin below will present the journal entrie under the conditions as
expressed above.
 a) The machine is discarded as scrap without any value
 Details  Debit’ $  Credit’ $
 Accumulated Depreciation  77,000  
 Machine Account    77,000

b) It is sold at it’s carrying amount 13,000

 Details  Debit’ $  Credit’ $

 Accumulated Depreciation  64,000  
 Disposal account  13,000  
 Machine Account    13,000
 Cash account or Bank account  13,000  

c) The machine was sold for 20,000

 Details  Debit’ $  Credit’ $
 Accumulated Depreciation  64,000  
 Cash or Bank Account  20,000  
 Machine Asset    77,000
 Gain on Disposal of machine    7,000

d) The machine was sold for $10,000

 Details  Debit  Credit
 Cash or Bank  10,000  
 Accumulated Depreciation  64,000  
 Loss on disposal of machines  5,000  
 Machine asset    77,000

e) Exchanged with another machine

     

     

     
     
     
 Achibald’s Balance Sheet as at 31st December 2009 
 Date  Details  Cost  Acc: Dep  Carrying Value
 31/10/2009  Non Current Assets      
   Computer system  15000    15000
   Goodwill  68000    68000
   Land and Building  110000    110000
   Computer software  18000    18000
   Furniture & Fittings  243000    243000
   Plant and Equipment  309000    309000
   Computer printers  25000    25000
   Cost      877000
  Add; Current Assets      
   Electricity Prepaid    15000  
   Receivables    370000  
   Prepaiments    295000  
   Inventory (R&F)    237000  
   Cash in Hand    3000  920000
   Total Assets      1797000
  Financed by      
  Capital    600000  
  Non Current Liabilities      
  Factory Machine  84000    
  Long term loan  250000    
  Current liabilities      
  Bank overdraft  203000    
  Payable  419000  956000  
     155600  
  Add; Returned Earning    241000  1797000 
  Assets and Liabilities     1797000 
       
       
       
         
Question 2 Part C

D) The depreciation table for the next eight years using the straight line methord.

Data
 Cost of the machine = $180,000
 Carring Value = $8,000
 Useful life = 8years

Depreciation for each year

 Dep:  Accumulated:
 Date  Details  Cost Charge Dep  Carrying Value
31/10/2010  Machine  180,000 21,500   21,500  158,500
31/10/2011 Machine  158,000 21,500   43,000  137,000
31/10/2012 Machine  137,000 21,500   64,500  115,500
31/10/2013 Machine  115,000 21,500   86,000  94,000
31/10/2014 Machine  94,000 21,500   107,500  72,500
31/10/2015 Machine  72,500 21,500   129,500  51,500
31/10/2016 Machine  51,000 21,500   150,500  29,500
31/10/2017 Machine  29,500 21,500   172000  8000

I) The depreciation expense for the third year of the machine’s life according to the
table above is; = $21500
II) The accumulated depreciation for the asset after five years according to the table
above is given as = $107,500
III) And the asset’s carrying value after five years = $72,500
 E) The depreciation table for the next eight years using the double declining balance.

Data
 Cost of the machine = $180,000
 Carring Value = $8,000
 Useful life = 8years

 Dep:  Accumulated:
 Date  Details  Cost*Rate Charge Dep  Carrying Value

31/10/2010  Machine  180,000*25% 45,000  45,000  135,000

 
31/10/2011 Machine 135,000*25% 33750  78,750  101,250

31/10/2012 Machine  101,250*25% 25312.5   104,062.5  75,937.5

31/10/2013 Machine 75,937.5*25%  18,984.38   123,046.88  56,953.12

31/10/2014 Machine 56,953.12*25% 14238.28  137,285.16  42,714.84

31/10/2015 Machine  42,714.84*25% 10678.71  147,963.87  32036.13

31/10/2016 Machine  32036.13*25% 8009.033  155,972.9025  24,027.097

31/10/2017 Machine  24,027.100*25% 6006.7743  161979.6768  18020.3257

I) The Depreciation expense for third year according to th information in the table

above is given as = $25312.5

II) $25312.5 and the accumulated amount about which is $107,500 in comparison the

accumulated amount is approximately three times bigger the charge

C) Carrying amount = $8000 for straight line and $18020.3257 for declining balance.
Income statement for the year ended 31st June 2010 
 Date  Details  Kwacha  Kwacha
 30/06/2010  Sales    280’000
  Less Cost of sales     160’000
   Gross Profit    120’000
   Add: Other Incomes    
   Royalties received    1’700
      121’700
   Less: Expenses    
   Salaries and Wages  37’000
   Loan interest  4’000
   Insurance  2’000
   Telephone & Postage  1,500
   Rent and Rates  12’400
   Heat and lighting  3’700
   Equipment Repairs  1’600
   Depreciation  3’200
   Motor Vehicle: Dep  4’500
   Running Costs  1’700
   Accounting & Audit  3’400
   Bad Debts  800 75800
   Net Profit   45900