Acquisition of Non-Current Assets and Entities Dissertation

Acquisition of Non-Current Assets and Entities

A CC T1 0 zero 6

EXAMPLE: TOPIC four - REMEDY

FINANCIAL ACCOUNTING 1

PROGRAM COORDINATORS: CHEE FEI CHANG PREPARED BY: SCOTT COPELAND

FA 1 – PHUONG EXAMPLE: TOPIC 4 SOLUTION

CASE STUDY 4 – ACQUISITION OF NON-CURRENT ASSETS AND ENTITIES

By the end of his adventures in ADA Phuong had chosen to purchase a fresh Standard Diesel powered Delivery Van. Phuong conservatively estimates the delivery truck should provide him rewards for at least another 5 years at which period he will be able to receive a trade in of $2, 000 on an upgraded van. Since noted in topic 1 the delivery van was purchased about June 25. The relevant entrance Phuong manufactured was June 25 Delivery Van GST Outlays Money 22, 500 2, 2 hundred 24, two hundred

Following your discussion in Topic a couple of and the importance of following accounting standards Phuong has reviewed the order he made and the way this individual recorded that. At the time of purchasing the van Phuong spent an additional $8, 800 (including GST) on add-ons and imprevisto items related to the truck on the advice of the dealer. To account for these Phuong had built a second entrance as follows Summer 25 Truck Purchase Expenses GST Items Cash eight, 000 800 8, 800

The additional expenditure can be broken down as follows (all items outlined are net of GST)  Full wash and detailing with the vehicle including the application of pinstriping in Phuong's company colours. $300  Stamp Obligation and Federal government Taxes. $600  A set of upgraded mild truck tyres that are designed to previous twice as very long as our factory supplied tyres. $480  A a fridge and heat tank14956 which allows Phuong to deliver his catering foodstuff at the ideal temperature. $4000  Highway Assistance Bundle. $520 (Guarantees a auto technician will be available24 hours every day, 7 days a week to correct any physical faults for 24 months)  GPS Navigation Unit that allow Phuong to locate his next delivery point more efficiently. $1200  An upgraded postponement, interruption package to allow the van to deal with extra weight of the refrigeration and heating unit. $900

a couple of

FA one particular – PHUONG CASE STUDY: MATTER 4 OPTION

Required 1 ) Prepare the General Journal access to correctly record the purchase of the Delivery Van and the associated costs. installment payments on your Comment on the effect of saving the order as Phuong originally did in comparison to the method required by standards. Phuong has been quite happy with improvement of the sales of his The Hot Products sauce and is also thinking about increasing his businesses. Phuong has already established some talks with people this individual knows in the retail sector and it appears there are potential gains to get made from producing the spices himself and expanding his range. To be able to achieve this Phuong has come program two alternatives. The first is to find some sort of financing that will let him get the different property he demands and retain the services of extra personnel to produce and bottle the number of gravies. Phuong provides managed to determine a company which has repossessed various assets by failed business and is consequently offering them at a reasonably good value. Of those property available Phuong is hoping to acquire a Marinade Extraction Unit that is capable of turning fresh create into a form useable in the sauces, a bottle sterilisation and filling up plant, an inventory of a glass bottles which were designed for fizzy drinks but are a suitable size pertaining to his sauces and a small warehouse and land deal in a lately developed commercial area. Phuong organised to get an independent valuation of the products he is considering and the record has identified the good values for each item happen to be: Sauce Unit - $17, 000, Bottle of wine Plant -- $23, 000, Inventory - $6, 1000 net realisable value and Warehouse and Land -- $60, 500. Following a lot of intense discussion with the company representative Phuong has decided to pay $94, 400 intended for the property. Phuong will likely need to borrow the complete amount help to make this order. Required a few. Prepare the typical Journal admittance to record the purchase of this group of assets. Ensure you show every...