BSBFIA401: Asset Accounting - Depreciation, Disposal, and Registers

This assignment solution covers the preparation of fixed asset register worksheets, a fixed asset register summary, general journal entries, general ledger accounts, and extracts of financial statements (income statement and balance sheet) related to machinery assets. It includes calculations for depreciation using both straight-line and reducing balance methods, as well as the accounting treatment for the disposal of an asset, including the calculation of gain or loss on disposal. The solution also demonstrates the application of units-of-use depreciation method for a motor vehicle, calculating depreciation expense based on kilometers traveled. The assignment is designed to assess understanding of asset accounting principles and practices.

Unit Assessment Guide
Assessment Cover Sheet
QUESTION 1 - Asset Register Worksheets, Depreciation, Disposal of
Assets
Magic Mondo purchased two Machines for cash, which were both installed ready
for use on 1 January 20x2.
Machine 1 cost $41,998 ($38,180 + $3,818 GST) and had a residual value of
$1,100 ($1,000 + $100 GST) and is depreciated at 20% pa straight line.
Machine 2 cost $88,000 ($80,000 + $8,000 GST) with a residual value of nil and
is depreciated at 25% pa reducing balance.
Magic Mondo has a 30 June balance date
On 1 May 20x3 machine 1 was sold for cash $22,000 ($20,000 + $2,000 GST)
On 1 May 20x3 machine 3 was purchased for cash, delivered and installed at a
total cost of $60,379 ($54,890 + $5,489 GST) with a residual value of $5,379
($4,890 + $489 GST) and is depreciated at 30% pa reducing balance.
REQUIRED:
Prepare for the years ended 30 June 20x2 and 20x3 the following:
 Fixed asset register worksheets for all machines showing depreciation,
accumulated depreciation and written-down value as well as the disposal
details where applicable
NOTE: Round all depreciation calculations to the nearest whole
dollar.
 Prepare a Fixed Asset Register Summary for 20x2 and 20x3 General journals for all entries including original purchase of assets,
balance day adjustments (depreciation), additional depreciation entries to
date of sale, disposal journals (all) and closing journals (depreciation & gain
or loss on disposal).
NOTE: all entries (even bank entries) are to be recorded in General
Journal format.
 Post all General Journal entries to the relevant General Ledger accounts
included in the answer booklet
Prepare for the year ended 30 June 20x3:
Unit code: BSBFIA401 Created: 10/08/2015 [ 1 of 1 0 ]

Unit Assessment Guide
 extracts of the Financial Statements (Income Statement and Balance
Sheet) for 20x3 year only
sssssHINT: Under the Diminishing Balance Method - the residual value is not deducted from the
asset’s cost to calculate depreciation charges – it only affects depreciation charges when the
asset’s WDV equals the residual value which will occur towards the end of the useful life of an
asset; at which time a balancing charge will be required for depreciation expense so the asset
does not get depreciated below its residual value amount. Hence N/A has been inserted in the
Diminishing balance worksheets. Start depreciating these assets from their cost which is their
Opening Carrying Amount i.e. WDV
ANSWER BOOKLET - Assessment 2 of 3 - Question 1
DEPRECIATION WORKSHEETS
MACHINE 1 MACHINE 2
MACHINE 3
Diminishing Balance Depreciation Method
Asset Description: Machin
e 3
Asset cost incl. Installation 54890
Less Residual value 4890
Depreciable Amount $ 50000
Rate pa _____30___ % on opening WDV (i.e. carrying amount)
Date Openin
g Dep'n Accum
-ulated Closing
Unit code: BSBFIA401 Created: 10/08/2015 [ 2 of 1 0 ]
Machine 2
$
30 June 20x2
30 June 20x3
Diminishing Balance Depreciation Method
Asset Description:
Rate pa ____25____ % on opening WDV (i.e. carrying amt)
Asset cost incl. Installation 80000
Less Residual value 0
Depreciable Amount 80000
Accum-
ulated
Dep'n
Closing
Carrying
Amount (WDV)
Date
Opening
Carrying
Amount
Dep'n
Exp Current
Year
10000 70000
70000 17500 27500 52500
80000 10000
Asset Description:Machine 1
$
30 June
20x2
1 May 20x3
Straight-line Depreciation M ethod
Asset cost incl. Installation 38180
Accum-ulated
Dep'n
Rate pa ____20____ % on depreciable amt
Less Residual value 1000
Depreciable Amount 37180
Deprec $ 7436 p.a.
Date
Asset
Cost
Dep'n
Exp Current
Year
Closing
Carrying
Amount
33462 6197 9915 27265
37180 3718 3718 33462

Unit Assessment Guide
Carryin
g
Amoun
t
Exp
Curren
t Year
Dep'n Carryin
g
Amoun
t (WDV)
30 June 20x3 50000 2500 2500 47500
Unit code: BSBFIA401 Created: 10/08/2015 [ 3 of 1 0 ]

Unit Assessment Guide
Answer - QUESTION 1 (Cont.) FIXED ASSET (i.e Non-Current Asset) REGISTER SUMMARY
YEAR 1 - 20x2
COST ACCUMULATED DEPRECIATION WDV
Asset
Descriptio
n
asset
#/ Asset
Category
Deprec
Metho
d
Deprec
Rate Op Bal
Addition
s during
Year
Acqn
Date
Disposal
s
Closin
g Cost Op bal Deprec
Exp CY
Accum
Dep -
Disposal
s
Accum
Deprec
- Cl
bal
CLOSIN
G WDV
serial #
Machine 1 1 Machinery SLM 20% 38180 1 Jan 20x2 - 38180 0 3718 - 3718 34462
Machine 2 2 Machinery DBM 25% 80000 1 Jan 20x2 - 80000 0 10000 - 10000 70000
Totals 11818
0 13718 13718 104462
YEAR 2 - 20x3
COST ACCUMULATED DEPRECIATION WDV
Asset
Description
asset #/ Asset
Category
Deprec
Method
Deprec
Rate Op Bal
Addition
s during
Year
Acqn
Date
Disposal
s
Closing
Cost Op bal Deprec
Exp CY
Accum
Dep -
Disposal
s
Accum
Deprec -
Cl bal
CLOSIN
G WDV
serial #
Machine 1 0001 Machinery SLM 20% 38180 - 38180 0 3718 6197 9915 0 0
Machine 2 0002 Machinery DBM 25% 80000 - - 80000 10000 17500 27500 52500
Machine 3 0003 Machinery DBM 30% 0 54890 1 May
20x3 - 54890 2500 2500 52390
Totals 13489
0 26197 30000 104890
Unit code: BSBFIA401 Created: 10/08/2015 [ 4 of 1 0 ]

Unit Assessment Guide
Answer - QUESTION 1 (Cont.)
General Journal of Magic Mondo.
GJ 1
1/1/20x2 Machinery A/c. 118180
GST Paid A/c. 11818
Cash at Bank A/c. 129998
30/6/20x2 Depreciation- Machinery A/c. 13718
Accumulated Depreciation- Machinery A/c. 13718
30/6/20x2 Profit & Loss A/c. 13718
Depreciation- Machinery A/c. 13718
1/5/20x3 Depreciation- Machinery A/c. 6197
Accumulated Depreciation- Machinery A/c. 6197
1/5/20x3 Disposal- Machinery A/c. 28265
Accumulated Depreciation- Machinery A/c. 9915
Machinery A/c. 38180
Cash at Bank A/c. 22000
Loss on Disposal - Machinery A/c. 8265
Disposal- Machinery A/c. 28265
GST Collected A/c. 2000
1/5/20x3 Machinery A/c. 54890
GST Paid A/c. 5489
Cash at Bank A/c. 60379
30/6/20x3 Depreciation- Machinery A/c. 20000
Accumulated Depreciation- Machinery A/c. 20000
30/6/20x3 Profit & Loss A/c. 34462
Depreciation- Machinery A/c. 26197
Loss on Disposal - Machinery A/c. 8265
Answer - QUESTION 1 (Cont.)
Unit code: BSBFIA401 Created: 10/08/2015 [ 5 of 1 0 ]

Unit Assessment Guide
Answer - QUESTION 1 (Cont.)
Machinery
Date Particulars Date Particulars Amount
1/1/20x2 To, Cash at Bank 118180 30/6/20x2 By, Balance c/d 118180
118180 118180
1/7/20x3 To, Balance b/d 118180 1/5/20x3 By, Disposal - Machinery A/c. 38180
1/5/20x3 To, Cash at Bank A/c. 54890 30/6/20x3 By, Balance c/d 134890
173070 173070
Extract General Ledger of Magic Mondo (Cont.)
Accumulated Depreciation - Machinery
Date Particulars Date Particulars Amount
30/6/20x2 To, Balance c/d. 13718 30/6/20x2 By, Depreciation- Machinery A/c. 13718
13718 13718
1/5/20x3 To, Machinery A/c. 9915 1/7/20x3 By, Balance b/d 13718
30/6/20x3 To, Balance c/d 30000 1/5/20x3 By, Depreciation- Machinery A/c. 6197
30/6/20x3 By, Depreciation- Machinery A/c. 20000
39915 39915
Depreciation - Machinery
Date Particulars Date Particulars Amount
30/6/20x2 To, Accumulated-Depreciation A/c. 13718 30/6/20x2 By, Profit & Loss A/c. 13718
13718 13718
1/5/20x3 To, Accumulated-Depreciation A/c. 6197 30/6/20x3 By, Profit & Loss A/c. 26197
30/6/20x3 To, Accumulated-Depreciation A/c. 20000
26197 26197
Unit code: BSBFIA401 Created: 10/08/2015 [ 6 of 1 0 ]

Unit Assessment Guide
Disposal - Machinery
Date Particulars Date Particulars Amount
1/5/20x3 To, Machinery 28265 1/5/20x3 By, Cash at Bank A/c. 20000
Loss on Disposal - Machinery 8265
28265 28265
*Cross out incorrect word Loss on Disposal - Machinery
Date Particulars Date Particulars Amount
1/5/20x3 To, Disposal - Machinery A/c. 826
5 30/6/20x3 By, Profit & Loss A/c. 8265
826
5 8265
Answer - QUESTION 1 (Cont.)
Extract Financial Statements of Magic Mondo
Extract Income Statement of Magic Mondo . . . . . . . . .
for the year ended 30 June 20x3
Income
Less : expense
Depreciation $26197
Total Expenses $26197
Net profit
Extract Balance Sheet of Magic Mondo . . . . . . .
as at 30 June 20x3
Machinery $173070
Unit code: BSBFIA401 Created: 10/08/2015 [ 7 of 1 0 ]

Unit Assessment Guide
Less- accumulated depreciation $39915
Book Value $133155
Total Asset $133155
Adjusted Trial balance
Magic Mondo for the yearend 30th June 20x3
Account Title Debit Credit
Accumulated Depreciation $26197
Depreciation $26197
Total $26197 $26197
Unit code: BSBFIA401 Created: 10/08/2015 [ 8 of 1 0 ]

Unit Assessment Guide
QUESTION 2 - Units of Use Depreciation Method
Hogwartz bought a motor vehicle costing $50,600 ($46,000 + $4,600 GST) for cash on 13 February 20x1.
The asset had a residual value of $2,200 ($2,000 + $200 GST). It is depreciated using the units-of-use
method based on a total useful life in kms of 200,000kms.
The kms travelled in the first three years were:
20x1 18,000
20x2 48,500
20x3 52,400
REQUIRED:
Complete the asset register worksheet below for the years ended 30 June 20x1, 20x2 and 20x3
Answer Template:
Units of Use Depreciation Method
Asset
Asset cost incl. Installation $50600
Less Residual value $2200
= Depreciable amount $48400
Preset total units of use: _200000______Kms (i.e. useful life in
kms)
Depreciation cost for 1km $ 4 using
depreciable amount
Date
Units
used
(Kms
travel'd
)
Asset
Cost
Deprec'n
Exp
(current)
Accum-
ulated
Deprec'
n
Closing
Carryin
g
Amount
20x1 18000 $48400 $4356 $4356 $44044
20x2 48500 $48400 $11737 $16090 $32310
20x3 52400 $48400 $12681 $28771 $19629
Unit code: BSBFIA401 Created: 10/08/2015 [ 9 of 1 0 ]

Unit Assessment Guide
Assessment Cover Sheet
:
Question 1 – Comprehensive Question comprising an original Trial Balance with a few
straightforward Balance Day Adjustments. Students will be required to:
 Prepare General Journal entries for Balance Day Adjustments
 Prepare Closing General Journal entries for Revenue and expense accounts and drawings (after
allowing for Balance Day Adjustments )
 Post the Closing Journal entries to Trading, P&L and Capital General Ledger accounts (“T” a/c
format)
 Prepare an Income Statement
 Prepare a Balance Sheet
 Prepare an after adjustment and closing journal Trial Balance
Question 2 – Balance Day Adjustment Question covering accruals and prepayments of expenses and
incomes. This question requires the calculation of the amounts to be used for the Balance Day
Adjustment entries given the dates of receipts, payments and the details of the invoices or expenses to
be accrued.
General Journal entries will be required for theses Balance Day Adjustments and posting both balance
day adjustments and closing general journals to the Salaries and Wages general Ledger account will
also be required.
Unit code: BSBFIA401 Created: 10/08/2015 [ 10 of 1 0 ]