ACCT6003 Case Study: Accounting for Shares, Debentures, and Impairment

This assignment provides a detailed solution to an accounting case study, focusing on shares, debentures, and non-current assets. The solution outlines the process of calculating the market values of assets, including buildings and equipment, and determining impairment losses. It includes journal entries for impairment losses, depreciation, and the purchase of plant. The solution covers journal entries for share applications, allotments, calls, forfeited shares, reissued shares, and the transfer of money to ordinary share capital. This document provides a comprehensive guide to understanding the accounting principles involved in these financial transactions, offering a practical application of accounting standards and procedures. The solution is designed to assist students in understanding and applying accounting principles to real-world scenarios.

Transcript
Thank you for giving me this time to make this presentation.
Question 1
First of all, once given the book values of assets and their accumulated depreciation over the years, we
should less the accumulated depreciation for each asset from the book value so that we can arrive at
the market values of these assets. This is therefore done for both Buildings and Equipment. This will
enable us to find the total adjusted carrying amount. We then less the total recoverable amount from
this adjusted carrying amount to arrive at this impairment loss.
We will then allocate this impairment loss to the assets and then subtract the allocated losses from the
asset carrying amount. What we get here at the end is the new adjusted carrying amount for each asset.
Journal entries: For impairment loss, debit impairment loss a/c and credit accumulated impairment loss
a/c. For asset depreciation, debit depreciation on respective asset a/c and credit accumulated
depreciation.
Question 2
These are the journal entries for purchase of plant, its calculated depreciation over the said period,
revaluation surplus and revaluation loss as at 31 December 2019 as well as revaluation gain and loss as
at 30 June 2020.
Question 3.
Journal entries for the share application, share allotment and share call. Here are also journal entries for
the forfeited shares as well as the reissued shares. Finally, there are journal entries for the transfer of
the received money into ordinary share capital. Thank you.