Question

The balances for Grose Ltd at 16 April are:

Accounts receivable			$49 350
Allowance for doubtful debts			(5 800)
						$43 550

If an account for $1200 is written off on 15 June, what is the estimated realisable value of accounts receivable after the write-off? (Ignore any GST adjustment for the purposes of this question.)

a

$42 350

b

$43 550

c

$44 750

d

$48 150

2]

At 30 June 2019, the financial statements of McMaster Ltd showed a building with a cost (net of GST) of $270,000 and accumulated depreciation of $137,000. The business uses the straight-line method to depreciate the building. When acquired, the building's useful life was estimated at 30 years and its residual value at $54,000. On 1 January 2020, McMaster Ltd made structural improvements to the building costing $85,000 (net of GST). Although the capacity of the building was unchanged, it is estimated that the improvements will extend the useful life of the building to 40 years, rather than the 30 years originally estimated. No change is expected in the residual value.

A.

Calculate the number of years the building had been depreciated to 30 June 2019. (Round intermediate answer & final answer to 0 decimal places, e.g. 5,275.)

Number of years

Ans

3] Green Pastures has acquired equipment and incurred the following expenses.

		$
Gross invoice price, net of GST, subject to terms of 5/10, n/30)		46 500
Transportation costs to get equipment to factory		3 200
Speeding ticket incurred by company driver while delivering equipment to the factory		120
Cost to repair wall damaged during installation		1 200
Special permit to allow wide load on freeway		600

The equipment should be recorded in Green Pastures’ records at:

a

$46 500.

b

$49 700.

c

$50 300.

d

$51 500.

Answer 1

The estimated realisable value of the accounts receivable after the written off for grose ltd.

(A) $ 42350

Reason: bad debts has to be written off first and then the provision has to be deducted from the receivables

2.The number of years the building has been depreciated till 30 june 2019 is 19.02 years

calculation: $270000-$54000/30=$7200

$137000/$7200=19.02 years

3.The equipment should be recorded in green pastures records at (c) $50300

calculation:$46500+$3200+$600