Practice Simulation Unit 5
sainty
Registered Posts: 21 New contributor 🐸
does anyone know how to do the second part of Task 1 in this simulation. the answers don't make any sense. i've read over the tutorial and can do all the exercises, including the workbook but this has me totally confused. this isn't the way i learnt how to do disposal, acquisition and depreciation of fixed assets in class.
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Comments
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No of pratice similuation
please let us know the no for it as there are so many.0 -
It is D1895 FRA, Task 1 part 2.
Thanks0 -
Journals are notes that show how an unusual transaction is recorded in the main ledger. It will have a date, the amount (must balance), which accounts are debited and credited and a description of an explanation of that transaction
Task 1 second part : - Prepare journals to record the acquisition and disposal in the main ledger.
Example of a Journal
Debit Credit
1 January 2008 Bank 10,000
Motor Car 2,000
Capital 12,000
Introduction of the capital in the business.
Acquisition:Here you are given two invoices one of which is a purchase of Cash Register. It is important to understand that this invoice has not yet been paid.
You need to demonstrate an understanding what amounts will be debited and credited to which accounts.
Cost of register = where will you debit or credit this amount and to which a/c?
Vat = where will you debit or credit this amount and to which a/c?
Total = where will you debit or credit this amount and to which a/c?
Give your explanation for recording this transaction in the main ledger?
Disposal:
Here you are given a memo informing you that a motor car has been sold and you need to demonstrate how you will record this in the main ledger. All the details of the car that has been disposed will be found in the Fixed Asset Register. The details that you will require is the
Original cost of the car, ????? Where will you debit or credit this amount and to which a/c?
Accumulated Depreciation ???? where will you debit or credit this amount and to which a/c?
Part Exchange Amount ??? where will you debit or credit this amount and to which a/c?
Don't forget to write your narrative - explanation of why you have to record this transaction in the main ledger.0 -
what is confusing me is the answer to this task, the "T" accounts don't make sense; i.e.Motor Vehicles Accumulated depreciation show an amount of £8064 to be credited to the Disposals Acc but it is not recorded in the Disposals Account, Motor Vehicles Cost Account shows an amount of £12600 to be debited to the Disposals Acc but it is not recorded in the Disposals Acc. The Disposals Acc shows a debit of £4536 and a credit of £3000, what has happened to £12600 and £8064, why is £4536 in the Disposals Acc. our tutor has taught us that £12600 and £8064 should be in the Disposals Acc, ie the original cost of the vehicle being disposed of and the accumulated depreciation. Totall Confused????0
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Unfortunately this is the problem will always occur when answers are given to students and is not the answer the way the students were taught. That does not mean that the answer is wrong but the person who wrote the answer is short cutting the answer.
The way that your tutor has taught you is absolutely correct because you are correctly demonstrating your understanding of the double entry bookkeeping.
If you debit £12600 in the disposal a/c (from the MV@cost) and Credit £8064 for the accumulated depreciation and then balance off the account – what do you get?
A debit balance of £4536
This balance that was posted to the disposal a/c was worked out in the Journal. If you go and examine the answer for disposal journal – the journal says that it will credit £12600 the motor vehicle at cost a/c and then debit £8064 to the MV accumulated depreciation a/c and the debit balance of £ 4536 will be debited to the Disposal account. This is the same answer as if you had carried the instructions in the above paragraph.
I hope this explanation will make sense but your tutor’s way is correct and if you were to answer your skills test answer like you were taught you will definitely found competent.0 -
It might help.
First thing first
acquisition of fixed assets in question it says invoice has not been therefore it must recorded in sundry creditors for both fixed assets
total amount for cash register should be £2820
Sundry creditors credit 2820
VAT debit 420
fixed assets[cash reg] Dr 2400
Sundry creditors credit 14080
fixed assets OLD van Cr 3000
VAT Dr 2520
fixed asset new van Dr 14400
selling expenses Dr 160
now if you can understand how to record acquisition of fixed assets if you have than we will go further
sorry if you think it does not make sense.0 -
Thank you for taking the time to help me with my query.:001_smile:0
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It confused me as well, but once I figured out the workings it's actually a lot more straight forward way of doing things. I also managed to get hold of some older text books,and this is the way that the entries were shown in it.0
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