ACC305 Management Accounting-statements and show workings and relevant

Task:

Question 1

Requirement:

Explain how the grant will be dealt with in the financial statements and show workings and relevant entries in Income Statement and Balance sheet for the year ended 31 Dec 2018 if:

(i) the grant is treated as deferred income

(ii) the grant is deducted from the cost of the asset.

Question 2

Required:

A .Clearly show cost, accumulated depreciation and carrying value of the machinery as of 1 Jan 2016 before revaluation. Show accounting entries on 1 Jan 2016 when plant is revalued.

B – Show accounting entries on disposal of the machinery on 1 Jan 2019.

Question 3

Required:

a. At what amount should Norwel record the acquisition cost of the machine?

b. How much depreciation expense should Norwel record in 2019 and in 2020?

 
c. At what amount will the machine be reported in Norwel’s statement of financial position at December 31, 2020?

d. During 2021, Norwel’s circuit board business is experiencing significant competition from companies with more advanced low-heat circuit boards. As a result, at June 30, 2021, Norwel conducts an impairment evaluation of the stamping machine purchased in 2019. Norwel determines that value-in-use for the machine is estimated to be €15,200 and the fair value of the machine less costs to sell, based on prices in the re-sale market, to be €13,400. Prepare the journal entry to record an impairment, if any, on the stamping machine.

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