Mock Assessment 1 Flashcards
closing inventory is valued at 190,000
DR INVENTORY 190,000
CR COS 190,000
Debenture interest should be accrued
DR FINANCE COST
CR FINANCIAL LIABILITY
The land was purchased several years ago when the company moved premises.
At the year-end the land was valued at its fair value of £1,800,000 by Super Surveyors.
The directors wish to incorporate this in the financial statements.
DR PPE LAND
CR REVALUATION GAIN
Current year corporation tax is estimated at £250,000.
DR TAX 250,000
CR TAX PAYABLE 250,000
Tax Payable
DR TAX PAYABLE
CR TAX
Adjustment for overprovision
Depreciation for the year needs to be provided on the basis of: Buildings 50 years SL 20% Admin 20% Distrib 60% COS Plant and equipment 25% RB 100% COS
DR ADMIN DR DISTRIBUTION DR COS CR ACC DEP BUILDINGS CR ACC DEP P+E
The allowance for irrecoverable debts should be adjusted to 6% of trade receivables.
DR Admin Costs
CR ALLOWANCE FOR IRRECOVABLE DEBTS
increase in allowance for irrevocable Debts
A government grant of £60,000 for capital expenditure on plant and equipment
is due to be received.
DR ACCRUED INCOME
CR DEFFERED INCOME
Government Grant Received
DR DEFFERED INCOME
CR COS
Transfer of government grant over useful life of asset
Deferred tax should be increased by £12,000.
DR TAX
CR DEFERRED TAX
Increase in deferred tax
Trade Receivables Working
Trade Receivables +
Accrued income
Prepayments
Adjustment in irrecoverable debts
Trade Payable working
Trade payables
accruals
