Accounting Assignment: Analysis of Spanish Company Financials

This accounting assignment analyzes the balance sheet of a Spanish company, requiring the student to categorize each item according to the Chart of Accounts and create the closing entry. The assignment includes a detailed chart of accounts, the closing entry with debits and credits, and answers to questions regarding asset valuation, depreciation, and impairment losses. The student calculates the cost of acquisition and annual amortization fees for a printer, determines impairment losses for different cameras, and records patent revaluation transactions. The document includes a bibliography of relevant accounting literature.

Running head: ACCOUNTING
Accounting
Name of the Student:
Name of the University:
Author’s Note:

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Table of Contents
Chart of accounts:............................................................................................................................2
Closing entry:...................................................................................................................................3
Answer to question 1:......................................................................................................................4
Answer to question 2:......................................................................................................................5
Answer to question 3:......................................................................................................................6
Bibliography:...................................................................................................................................7

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Chart of accounts:
Chart of Accounts
Account
Code Account Names
1-0000 Assets
1-0010 Banks
1-0020 Stock of goods
1-0030 Impairment loses
1-0040 Debtors-Client
1-0050 Short-Term investments
1-0060 Short-term investments (shares)
1-0070 Non-current assets
1-0071 Intangible fixed assets:
1-0072 Industrial Propriety
1-0073 Cumulative depreciation II
1-0080 Tangible fixed assets:
1-0081 Constructions
1-0082 ICT Equipment.
1-0083 Furniture
1-0084 Transport
1-0085 Cumulative depreciation IM
2-0000 Liabilities
2-0010 Current liability
2-0020 Short-term debts
2-0030 Short-term debts to institutions.
2-0040 Suppliers
2-0050 Creditors
2-0060 Liquidity:
2-0061 Banks
2-0070 Non-current liability
2-0071 Long-term debts
2-0072 Long-term debt to institutions.
3-0000 Equity
3-0010 Equity capital:
3-0020 Capital Social
3-0030 Legal reserve
3-0040 Profit and Loss

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Closing entry:
General Journal
Details Code Debit
Amount Credit Amount
Industrial property 1-0072 € 40.50
Construction 1-0081 € 3,900.00
ICT Equipment 1-0082 € 9.00
Furniture 1-0083 € 70.00
Transport 1-0084 € 35.00
Stock of goods 1-0020 € 62.00
Debtors client 1-0040 € 236.20
Short terms investment 1-0050 € 9.00
Bank 1-0010 € 225.00
Cumulative depreciation II 1-0073 € 5.00
Cumulative depreciation IM 1-0085 € 122.00
Impairment loss 1-0030 € 1.15
Long term debt to institutions 2-0072 € 710.00
Short term debt to
institutions 2-0030 € 38.00
Suppliers 2-0040 € 200.00
Creditors 2-0050 € 3.56
Capital social 3-0020 € 3,000.00
Legal reserve 3-0030 € 348.18
Profit and loss 3-0040 € 158.81
(To record the closing entry)

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Answer to question 1:
Computation of cost of acquisition
Cost of the printer € 25,000.000
Cost of installation and assembly € 3,000.000
Cost of transportation and delivery € 1,150.000
Total initial cost of acquisition € 29,150.000
Annual amortization fees:
Capitalized cost of printer € 29,150.000
Less: Cost of rehabilitation € 5,000.000
Depreciable amount € 24,150.000
Expected life of the printer 10
Annual amortization fees (24150/10) € 2,415.000
Daily maintenance cost:
Cost of maintenance per month € 250.000
Daily maintenance costs (250/30) € 8.333

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Answer to question 2:
Camera 1:
Cost of the asset € 1,750
Less: Depreciation for the last 3 years (1750*20%*3) € 1,050
Carrying amount as at the end of 2020 € 700
Less: Recoverable amount € 575
Impairment loss € 125
Camera 2:
Cost € 3,500
Less: Depreciation for the last 3 years (3500*20%*3) € 2,100
Carrying amount as at the end of 2020 € 1,400
Less: Recoverable amount € 1,500
Impairment loss NIL
As the recoverable amount is higher than the carrying amount
there will be no impairment loss.
Camera 3:
Cost € 1,950
Less: Depreciation for the last 3 years (1950*20%*3) € 1,170
Carrying amount as at the end of 2020 € 780
Less: Recoverable amount € 750
Impairment loss € 30
The difference of carrying amount and the recoverable amount
is considered as the impairment loss, as the carrying amount is
higher than the recoverable amount.
Camera 3:
Cost € 4,550
Less: Depreciation for the last 3 years (4550*20%*3) € 2,730
Carrying amount as at the end of 2020 € 1,820
Less: Recoverable amount € 2,200
Impairment loss NIL
As the recoverable amount is higher than the carrying amount
there will be no impairment loss.

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Answer to question 3:
Date Details Debit
Amount
Credit
Amount
1-Mar-16 Patent € 7,500
Bank € 7,500
(To record the transaction of acquisition of
patent as on the date of acquisition)
31-Dec-
16 Patent € 1,500
Revaluation Surplus (9000-7500) € 1,500
(To record the effect of revaluation of Patent)
31-Dec-
17 Revaluation Surplus (9000-8000) € 8,000
Patent € 8,000
(To record the effect of revaluation of Patent)

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Bibliography:
Cheung, E., Evans, E. and Wright, S., 2008. The adoption of IFRS in Australia: The case of
AASB 138 (IAS 38) Intangible Assets. Australian Accounting Review, 18(3), pp.248-256.
Glaum, M., Schmidt, P., Street, D.L. and Vogel, S., 2013. Compliance with IFRS 3-and IAS 36-
required disclosures across 17 European countries: company-and country-level
determinants. Accounting and business research, 43(3), pp.163-204.
Lapointe-Antunes, P. and Moore, J., 2013. The implementation of IAS 16 and IAS 41 at Andrew
Peller Limited. Accounting Education, 22(3), pp.268-281.
Svoboda, P. and Bohušová, H., 2017. Amendments to IAS 16 and IAS 41: Are there any
differences between plant and animal from a financial reporting point of view?. Acta
Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 65(1), pp.327-337.