1. Physical Factors
i) Wear and tear: Some non-current assets depreciate or lose value due to use overtime e.g. machinery and motor vehicles.
ii) Rot/decay/rust: This happens on assets that are not well maintained by the firm e.g. some machines.
2. Economic Factors
i) Inadequacy: Some assets lose value due to them becoming inadequate e.g. when a business grows or expands then some buildings may become inadequate due to space. Also some machines are unable to manufacture a large number of goods.
ii) Obsolescence: Some assets become obsolete due to change in technology or different methods of production e.g. computers.
3. Time Factors
Some assets have a legal fixed time e.g. properties on lease.
4. Depletion
This occurs when some assets have a wasting character due to extraction of raw materials, minerals or oil. Such assets include mines, oil wells, and quarries.
Wilfykil answered the question on February 28, 2019 at 08:30
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Date posted: February 28, 2019. Answers (1)
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The following details for the year ended 31 March 2003 are available. Draw up the trading account of R Sings for that year.
Sh.
Stocks: 1 April 2002 16,523
Returns inwards 1,372
Returns outwards 2,896
Purchases 53,397
Carriage inwards 1,122
Sales 94,600
Stocks: 31 March 2003 14323
Date posted: February 28, 2019. Answers (1)
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A bookkeeper extracted a trial balance on 31 December 2002 that failed to agree by Sh.3, 300, a shortage on the credit side of the trial balance. A suspense account was opened for the difference.
In January 2003 the following errors made in 2003 were found:
(i) Sales daybook had been undercast by Sh.1, 000.
(ii) Sales of Sh.2, 500 to J Church had been debited in error to J Chane account.
(iii) Rent account had been undercast by Sh.700.
(iv) Discounts received account had been under cast by Sh.3, 000.
(v) The sale of a motor vehicle at book value had been credited in error to Sales account Sh.3, 600.
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a) Show the journal entries necessary to correct the errors.
b) Draw up the suspense account after the errors described have been corrected.
Date posted: February 28, 2019. Answers (1)
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Date posted: February 28, 2019. Answers (1)
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A cashier in a firm starts with Sh.2,000 in the month of March (that is the cash float). I n the following week, the following payments are made:
Required:
Prepare a detailed petty cash book showing the balance to be carried forward to the next period and the relevant expense accounts, as they would appear on the General Ledger.
Date posted: February 28, 2019. Answers (1)
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Date posted: February 28, 2019. Answers (1)
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Define the following source documents:
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Date posted: February 28, 2019. Answers (1)
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(Solved)
Write up the following transactions in the books of S Pink:
2003
March 1 Started business with cash Sh.1,000.
“ 2 Bought goods on credit from A Cliks Sh.296.
“ 3 Paid rent by cash Sh.28.
“ 4 Paid Sh.1,000 of the cash of the firm into a bank account.
“ 5 Sold goods on credit to J Simpson Sh.54.
“ 7 Bought stationery Sh.15 paying by cheque.
“ 11 Cash sales Sh.49.
“ 14 Goods returned by us to A Cliks Sh.17.
“ 17 Sold goods on credit to P Lutz Sh.29.
“ 20 Paid for repairs to the building by cash Sh.18.
“ 22 J Simpson returned goods to us Sh.14.
“ 27 Paid A Cliks by cheque Sh.279.
“ 28 Cash purchases Sh.125.
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“ 30 Paid motor expenses in cash Sh.15.
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Date posted: February 28, 2019. Answers (1)
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Date posted: February 28, 2019. Answers (1)
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Date posted: February 28, 2019. Answers (1)
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Write up the asset, capital and liability accounts in the books of M Crash to record the following transactions:
2002
June 1 Started business with Sh.50,000 in the bank.
“ 2 Bought motor van paying by cheque Sh.12,000.
“ 5 Bought Fixtures Sh.4,000 on credit from Office Masters Ltd.
“ 8 Bought a van on credit from Motor Cars Ltd Sh.8,000.
“ 12 Took Sh.1,000 out of the bank and put it into the cash till.
“ 15 Bought Fixtures paying by cash Sh.600.
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“ 21 A loan of Sh.10,000 cash is received from J Marcus.
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Date posted: February 28, 2019. Answers (1)
- H Jumps has the following assets and liabilities as on 30 November 2002:
Creditors Sh.39,500;
Equipment Sh.115,000;
Motor vehicle Sh.62,900;
Stock Sh.61,500;
Debtors Sh.57,700;
Cash at bank...(Solved)
H Jumps has the following assets and liabilities as on 30 November 2002:
Creditors Sh.39,500;
Equipment Sh.115,000;
Motor vehicle Sh.62,900;
Stock Sh.61,500;
Debtors Sh.57,700;
Cash at bank Sh.72,800 and Cash in hand Sh.400.
Compute the balance on the capital account as at 30 November 2002.
During the first week of December 2002, Jump:
a. Bought extra equipment on credit for Sh.13,800.
b. Bought extra stock by cheque Sh.5,700.
c. Paid creditors by cheque Sh.7,900.
d. Received from debtors Sh.8,400 by cheque and Sh.600 by cash.
e. Put in an extra Sh.2,500 cash as capital.
You are to record the above transactions in respective accounts.
Date posted: February 28, 2019. Answers (1)
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Date posted: February 28, 2019. Answers (1)
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Date posted: February 28, 2019. Answers (1)
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Date posted: February 28, 2019. Answers (1)
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D Moody has the following assets and liabilities as on 31 April 2002:
Sh.
Creditors 15,800
Equipment 46,000
Motor Vehicle 25,160
Stock 24,600
Debtors 23,080
Cash at bank 29,120
Cash in hand 160
During the first week of May 2002 Moody:
a. Bought extra equipment on credit for Sh.5,520.
b. Bought extra stock by cheque Sh.2,280.
c. Paid creditors by cheque Sh.3,160.
d. Debtors paid Sh.3,360 by cheque and Sh.240 by cash.
e. Moody put in extra Sh.1,000 cash as capital
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a. Determine the capital as at 1st May 2002.
b. Draw up a statement of financial position after the above transactions have been completed.
Date posted: February 28, 2019. Answers (1)
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Date posted: February 28, 2019. Answers (1)
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Date posted: February 28, 2019. Answers (1)
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(b) A customer places a firm order for goods.
(c) Goods are delivered to the customer.
(d) The customer is invoiced for goods.
(e) The customer pays for the goods.
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Date posted: February 28, 2019. Answers (1)
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Date posted: February 28, 2019. Answers (1)