Part 3
1
EXERCISE 22
On 1 June 2011 the firm CPC from The Hague purchases a € 35,700 (including 19% VAT)
delivery van for small deliveries. The purchase was made on credit.
The monthly depreciation on the truck is 1.5% of the purchase price.
In the ledger of CPC the following accounts are found:
003 Delivery van
110 Bank
140 Creditors
180 VAT reclaimable
433 Depreciation costs
CPC draws up the profit and loss account on a monthly basis.
a.
b.
Give all the journal entries resulting from the van purchase for June 2011.
Draw up accounts 003 and 433 for 2001 (including the closure on 31 December
2001).
EXERCISE 23
On the trial balance sheet as on 31 December 2010 of FSR from Rotterdam, the following
accounts are seen, int. al.:
Debit
001
Store premises
€ 1,446,000
002
Store equipment
€
83,350
003
Vehicles
€
108,750
401
Depreciation costs store premises
€ …………
402
Depreciation costs store equipment
€ …………
403
Depreciation costs vehicles
€ …………
Further information:
-
On the store premises every year 4% of the purchase price (€ 1,800,000) is
depreciated.
On the store equipment every year € 27,000 is depreciated.
On 1 January 2009 the two cars were purchased for € 97,500 (VAT excluded)
each. It was decided to depreciate the cars each month using equal amounts, where
the amount is calculated on an expected 4 year durability and residual value of
€ 7,500 per car.
The depreciation costs are booked monthly; for December 2010 the bookings still have to be
made. In 2010 no purchases or sales of non-current assets were made.
Questions:
a.
Calculate the balances on the accounts 401, 402 and 403, as on 1 December 2010.
b.
Give the journal entries for the depreciation costs of December 2010.
c.
Calculate the book value of the store premises, the store equipment and the vehicles as
on 31 December 2010.
2
EXERCISE 24
On the trial balance as on 31 November 2011 of the industrial firm Forum the following is
seen:
001
011
400
Cars
Depreciation cars
Depreciation costs cars
Debit
€ 360,000
Credit
€ 144,000
€ 79,200
The depreciation is 24% per year of the purchase price. The depreciation is booked monthly,
and bookings up to November 2011 have been made.
a.
b.
Journalize the depreciation costs for December 2011.
Calculate the book value of the cars as at 31 December 2011.
EXERCISE 25
Part A
At founding on 1 January 2011, a company purchased a building for € 600,000. Present the
journal entries at the end of the financial year 2011 for the depreciation of € 18,000, if:
a.
b.
only the accounts ‘040 Buildings’ and ‘435 Depreciation costs buildings’ is used.
next to the accounts of a. the account ‘015 Depreciation buildings’ is used.
Part B
On a trial balance sheet as on 1 December the following accounts are found (int. al.):
040
045
430
Buses
Depreciation buses
Depreciation costs buses
Debit
€ 800,000
Credit
€280,000
€ 88,000
The depreciation costs are 12% of the purchase price of the buses, per year, but bookings are
made monthly.
a.
b.
c.
How old are the buses on 1 December?
Give the journal entry of the depreciation costs for December. This entry had not yet
been made.
What is the lifetime of the buses (in months)? There is no residual value.
3
Part C
On 1 January 2011, the balance on the ledger account 020 Office equipment is € 175,000. The
office equipment was originally purchased for € 250,000. It is decided to register the
cumulative depreciation separately in the ledger on a (to be opened) account 025 Depreciation
Office equipment.
1.
2.
3.
Journalize the opening of the new account.
The depreciation on the office equipment is 20% per year of the purchase price. There
also is an account 4.. Depreciation costs office equipment.
How old is the office equipment on 1 January 2011?
Draw up the extended trial balance for the three accounts as on 31 December 2011.
EXERCISE 26
On the trial balance as on 1 December 2011 of Paagman from The Hague, the following is
seen:
001
011
400
900
Delivery truck
Depreciation delivery trucks
Depreciation costs delivery trucks
Incidental returns
€ 196,000 (debit)
€ 88,000 (credit)
€ 40,400 (debit)
The depreciation on the delivery trucks is booked monthly and amounts 2% of the purchase
price of the trucks present on the first day of the month.
At the end of December 2011 a new delivery truck is purchased. Paagman trades in one of the
old trucks. The invoice shows:
Price new delivery truck
less: resale value old truck
VAT 19%
To be paid
€
€
€
94,000
22,000
72,000
13,680
85,680
The old truck was originally purchased for € 64,000, excluding VAT, while the cumulative
deprecation on 30 November 2011 was € 44,000.
a. Journalize the depreciation costs for the month November 2011.
b. Give the journal entry resulting from the mentioned trade.
c. Calculate the values of the accounts 001 and 011 on the balance sheet of 31 December
2011.
4
EXERCISE 27
On the balance sheet as on 31 May 2011 of the firm Zevenheuvelen from Nijmegen the
following assets are presented:
001 Buildings
011 Depreciation buildings
€ 5,760,000
€ 605,000
€ 5,155,000
002 Office equipment
€ 1,125,000
012 Depreciation office equipment € 416,250
€ 708,750
005 Other non-current assets
€
450,000
On a yearly basis 6% of purchase price of the buildings and 24% of the purchase price of the
office equipment is depreciated. On the investments and divestments made during a month,
half of the depreciation percentage is used.
The other assets are linearly depreciated in five years. On the ledger account 005 Other noncurrent assets 40% has been depreciated as per 31 May 2011.
Per 1 June 2011 the management of Zevenheuvelen decides to also register the cumulative
depreciation on the Other non-current assets separately in the ledger. For this, the account
‘015 Depreciaton other assets’ is created.
A
B
Give the journal entry needed for the change per 1 June 2011 so that the purchase
price and the cumulative depreciation on other non-current assets can be registered
separately.
Give the journal entries for the depreciation on the different tangible non-current
assets over June 2011.
N.B. The following accounts are used:
431 Depreciation costs buildings
432 Depreciation costs office equipment
435 Depreciation costs other non-current assets
5
EXERCISE 28
At the industrial firm Knegt & co from ‘s Gravenhage invoices of purchased goods are
received a short period of time after the receipt of the goods. This is why in the ledger of the
firm the account 1.. Invoices receivable (or invoices to receive) is used. On 1 January 2012
the account balance is € 62,800 (Fixed Transfer Price).The sold goods and the invoices are
sent to the supplier at the same time.
On 31 January 2012 the administration includes the following book totals:
1 Warehouse receipts book
€ 416,000 FTP
2 Register received invoices
€ 440,000 purchase price excl. 19% VAT (FTP € 448,000)
3 Register sent invoices
€ 552,000 selling price excl. 19% VAT
4 Warehouse deliveries book
€ 432,000 FTP
The following ledger accounts are in use:
1.. Creditors
1.. Debtors
1.. VAT reclaimable
1.. VAT payable
7.. Stock of goods
7.. Price differences
8.. Cost of goods sold
8.. Sales
Of all sent invoices in the period the goods were delivered as well.
Questions:
a.
Journalize the above book totals for Knegt & co.
b.
Calculate the balance of account 1.. Invoices receivable as on 31 January 2012.
c.
What account is complemented by the balance on account 1.. Invoices receivable?
EXERCISE 29
In commercial enterprise DTD purchased goods are booked at the fixed transfer price on the
ledger account 7.. Goods.
Because the order in which the goods and invoices are received differs, the company uses the
ledger accounts 1.. Invoices receivable (or Invoices to receive) against FTP and 7.. Goods
receivable (or Goods to receive) against purchase prices. The sold goods and invoices to the
customers are sent at the same time.
For March 2011 the following facts have been registered:
Purchases day book:
Received invoices
VAT 19%
€ 380,000
€ 72,200
€ 452,200
Warehouse receipts book:
Received goods
€ 352,000 (FTP)
6
Sales day book
Invoiced
VAT 19%
€ 450,000
€ 85,500
€ 535,500
Warehouse deliveries book
€ 376,000
Synchronization register received invoices and goods
Total FTP-value
Total invoice value (or purchase price value)
€ 320,000
€ 312,000
The administration includes a.o. the following ledger accounts:
1.. Creditors
1.. Debtors
1.. VAT reclaimable
1.. VAT payable
7.. Stock of goods
7.. Price discrepancies
8.. Cost of goods sold
8.. Sales
Present the journal entries resulting from the mentioned facts.
EXERCISE 30
In the ledger of company Dre Hazes from Vinkeveen the following accounts are seen (int.
al.):
1.. Invoices receivable
1.. Debtors
1.. Creditors
1.. VAT reclaimable
1.. VAT payable
7.. Stock of goods
7.. Goods receivable
7.. Price discrepancies purchases
8.. Cost of goods sold
8.. Sales
€ 228,000 (credit)
€ 768,000
€ 96,000 (debit)
€ 9,000
The receipt of the invoices is journalized against the invoice price, using the information from
the Register received invoices.
The receipt of goods in the warehouse is booked against the FTP, using the information from
the Register received goods.
At the end of each month discrepancies between the invoice price and the FTP, for all batches
where both the goods and the invoices have been received in that month, are booked on
account 7..Price discrepancies purchases.
7
In the Register sent invoices both the amounts on the outbound invoices and the amounts
converted to FTP are registered. All batches that are invoiced in a certain month are delivered
in the same month (meaning: invoices and goods are sent to customers at the same time).
Account for 19% VAT.
For January 2012 the following information has been collected:
1.
2.
3.
4.
Total amount invoices, including VAT, according to the Register received
invoices: € 380,800.
Total amount invoices, including VAT, according to the Register sent invoices:
€ 714,000. The FTP value of the invoiced, and also delivered goods is € 480,000.
The Register received goods totals € 340,000.
Synchronization of purchases:
Invoice price of batches for which the invoices and the goods have been
received € 308,000 excl. VAT. The FTP of the batches is € 488,000.
Synchronization of the Register received goods and the Register received invoices at the end
of January gives that:
Invoice price of batches of which invoices and goods have been received: € 308,000 excl
VAT. The FTP of these batches is € 488,000.
(The information from the Synchronization can also be given as follows:
“Synchronization of the Register received goods and the Register received invoices at the end
of January gives that:
i) from several received invoices the goods have not been received, for a total invoice amount
(excluding VAT) of € 108,000, and ii) from several received goods the invoices have not been
received, for a total amount (FTP) of € 80,000.”
Questions:
1
Journalize the facts from point 1, 2 and 3, for Dre Hazes over January 2012.
2
Journalize the synchronization for January 2012.
3
Draw up the ledger accounts 1.. Invoices receivable and 7.. Goods receivable, using the
January 2012 journal entries from question 1.
EXERCISE 31
In the ledger of WASNEEPLUS from Varsseveld the following accounts are found:
1.. Delivered goods
1.. Invoices receivable against FTP (= standard purchase price) invoice price
7.. Stock of goods
7.. Goods receivable against invoice price (= purchase price)
7.. Price discrepancies purchases
7.. Goods deliverable (or goods to deliver)
8
The financial facts for January 2012 are as follows:
1
2
3
4
5
6
Invoices received from suppliers against purchase price € 160,000 excl VAT.
Goods received from suppliers against FTP € 165,000.
Invoices sent to customers against a selling price of € 340,000 excl VAT. The FTP is
€ 260,000.
Goods sent to customers with a FTP of € 220,000.
Synchronization of purchases:
Invoice price of batches of which invoices and goods have been received: € 151,000
excl VAT. The FTP of these batches is € 158,000.
Synchronization of sales:
The FTP of the batches of which the invoices and goods have been sent:
€ 125,000.
Question:
Give the journal entries for WASNEEPLUS and account, when necessary, for
19% VAT.
EXERCISE 32
Since the beginning of 2005 enterprise Tolkamp from Amstelveen rents and uses a warehouse
from the firm PEEBEE Real Estate.
On 1 November 2012 Tolkamp buys the warehouse from PEEBEE for € 900,000, buyer’s
closing costs (the buyer pays the closing costs, like the transfer tax and the cadastral rights) .
The transfer tax is 6% of the purchase price. The cadastral rights are € 5,800. On 1 July 2012
Tolkamp paid € 30,000 to PEEBEE Real Estate. This was the rent for the period 1 July – 31
December 2012. After correcting for the rent paid in advance, the amount owed is paid by
bank on 1 November.
What journal entry for this payment is made by Tolkamp?
A
B
C
Buildings
Cadastral rights
Transitoria
To Bank
Buildings
Transitoria
To Bank
Buildings
To Transitoria
To Bank
€ 954,000
€ 5,800
€ 10,000
€ 969,800
€ 959,800
€ 10,000
€ 969,800
€ 959,800
€ 10,000
€ 949,800
CASE related to questions 2-3
From the beginning of 2005 company BENBO NV from Amstelveen has rented a warehouse
to PEEBEE Real Estate. On 1 November 2012 BENBO NV sells the warehouse, with the
closing costs for the buyer, to PEEBEE for € 900,000. BENBO uses an account ‘Buildings’
that is kept against purchase prices. At the moment of the sale, the book value of the
warehouse is € 800,000, which is 80% of the purchase price. The transfer tax is € 54,000. The
cadastral rights are € 5,800. On 1 July 2012 BENBO received € 30,000 in rental payments
9
from PEEBEE Real Estate, regarding the period 1 July – 31 December 2012. After correcting
for the rent received in advance, the amount owed is received, by bank, by BENBO on 1
November.
2
What is the correct journal entry for BENBO NV, regarding this sale?
A
B
C
3
Bank
Rent paid in advance
To Buildings
To Incidental returns
Bank
Depreciation costs
Rental revenues
To Buildings
To Incidental returns
Bank
Depreciation buildings
Rent received in advance
To Buildings
To Incidental returns
€ 890,000
€ 10,000
€ 800,000
€ 100,000
€ 890,000
€ 200,000
€ 10,000
€ 1,000,000
€ 100,000
€ 890,000
€ 200,000
€ 10,000
€ 1,000,000
€ 100,000
With what amount will the ledger account ‘Buildings’ change following the journal
entry PEEBEE makes for this sale?
A
B
C
€ 949,800
€ 959,800
€ 969,800
End of Case
4
For the firm S. Stevin the following partial trial balance as on 31 December 2011 is
given:
Account nr
011
012
450
980
Account name
Machines
Depreciation machines
Depreciation costs
Miscellaneous revenues and
expenses
Debit
Credit
€ 5,504,000
€ 2,842,440
€ 2,607
On 31 December 2011 machines with a purchase price of € 500,000 are discarded. The
discarded machines have no value for the firm. The book value of the machines was € 54,000.
10
The booking for the discarding of the machines is:
A
B
C
5
Miscellaneous revenues and expenses
To Machines
Depreciation costs
Deprecation machines
To Machines
Miscellaneous revenues and expenses
Depreciation machines
To Machines
€ 54,000
€ 54,000
€ 54,000
€ 446,000
€ 500,000
€ 54,000
€ 446,000
€ 500,000
For the firm IDAV the following partial trial balance sheet as on 31 December 2011 is
given:
Account nr
020
021
Account name
Cars
Depreciation cars
Debit
……….
Credit
€ 35,000
Every year 25% of the Cars’ book value as on 1 January is depreciated. On 31 December
2011 the cars are 2 years old. The depreciations for 2011 have been booked and are processed
in the trial balance sheet of 31 December 2011.
The journal entry for the depreciation of the cars in 2011 is:
A
B
C
Depreciation costs
To Depreciation cars
Depreciation costs
To Depreciation cars
Depreciation costs
To Depreciation cars
€ 20,000
€ 20,000
€ 17,500
€ 17,500
€ 15,000
€ 15,000
6
On 1 March 2011 a car, purchased in 2005 for € 51,600, is replaced. The purchase
price of the new car was € 70,800. The old car was traded in for € 8,000. The payment
by bank of € 62,800 (€ 70,800 – € 8,000) is debited on the account Cars. The ledger
account Cars is kept against book value.
Every year, regardless of the purchase date, 20% of the Cars’ purchase price is
depreciated, until the residual value is zero.
Taxes are ignored.
The journal entry to correct the wrong journal entry of this trade is:
A
Cars
To Incidental revenues and expenses
Depreciation cars
To Cars
To Incidental revenues and expenses
Depreciation cars
Cars
To Bank
To Incidental revenues and expenses
B
C
€ 8,000
€ 8,000
€ 51,600
€ 43,600
€ 8,000
€ 51,600
€ 19,200
€ 62,800
€ 8,000
11
CASE related to questions 7-9
For a firm the following partial trial balance is given:
Buildings
Office equipment
Vehicles
31 December 2011
€ 900,000
€ 130,000
€ 212,000
31 December 2012
€ 870,000
€ 145,000
€ 174,000
The depreciation costs of the non-current assets in 2012 are € 135,000.
The buildings were purchased for € 1,290,000. After this no investments in buildings have
been made. The buildings are linearly depreciated in 40 years, with a residual value of
€ 90,000. On the office equipment € 26,000 was depreciated in 2012. In 2012 no office
equipment or vehicles were sold.
7
When were the buildings purchased?
A
B
C
8
What amount was invested in the other non-current assets in 2012?
A
B
C
9
1 January 1998
1 January 1999
1 January 2000
€ 23,000
€ 41,000
€ 82,000
What is the journal entry for the monthly depreciation costs in 2012?
A
B
C
Depreciation costs
To Depreciation buildings
To Depreciation office equipment
To Depreciation vehicles
Depreciation costs
To Buildings
To Office equipment
To Vehicles
Depreciation costs
To Depreciation non-current assets
End of case
10 In the ledger of the firm Pieter the account ‘Purchases’ is found. On the balance date the
account has a debit balance of € 16,000. This account can be substituted by:
A Goods to receive
B Invoices to receive
C Goods
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11 On the trial balance as on 31 December 2012 of the firm HAJEE, the following accounts
are found:
Goods against standard purchase price
€ 44,000 (Debit)
Price discrepancies purchases
€ 6,500 (Credit)
Result price discrepancies
The account ‘Price discrepancies purchases’ is a non-permanent account.
The invoice price of the goods present on 31 December 2012 is € 42,000.
What preceding journal entry must HAJEE make?
A Price discrepancies purchases
To Result price discrepancies
B Price discrepancies purchases
To Result price discrepancies
C Price discrepancies purchases
To Result price discrepancies
€ 2,000
€ 2,000
€ 4,500
€ 4,500
€ 8,500
€ 8,500
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