FAC1601 ASSESSMENT 3 SEM 2 OF 2024 EXPECTED QUESTIONS AND ANSWERS

FAC1601 ASSESSMENT 3
SEM 2 OF 2024 EXPECTED
QUESTIONS AND
ANSWERS


Question 1: Journal Entries for Transactions
Question: On 1 July 2024, ABC Ltd purchased office equipment for $50,000 on credit from XYZ
Supplies. Prepare the journal entry for this transaction.

Answer:

● Journal Entry:
○ Debit: Office Equipment $50,000
○ Credit: Accounts Payable $50,000

Explanation:

● Office Equipment is an asset account, which increases by $50,000.
● Accounts Payable is a liability account, which also increases by $50,000 because the
purchase was made on credit.

Question 2: Depreciation Calculation
Question: ABC Ltd purchased machinery costing $100,000 with an estimated useful life of 5
years and no residual value. Calculate the annual depreciation using the straight-line method.

Answer:

● Annual Depreciation: Depreciation Expense=Cost of Asset−Residual
ValueUseful Life\text{Depreciation Expense} = \frac{\text{Cost of Asset} - \
text{Residual Value}}{\text{Useful Life}}Depreciation Expense=Useful
LifeCost of Asset−Residual Value Depreciation
Expense=100,000−05=20,000 per year\text{Depreciation Expense} = \
frac{100,000 - 0}{5} = 20,000 \text{ per year}Depreciation
Expense=5100,000−0=20,000 per year