Accounting 2A Semester Test 2 2024 Memo

FACULTY/COLLEGE College of Business and Economics
SCHOOL School of Accounting
CAMPUSES APK and SWC
MODULE NAME Accounting 2A
MODULE CODE ACT02A2
SEMESTER First Semester
ASSESSMENT OPPORTUNITY, Assessment Opportunity 2
YEAR 2024




SUGGESTED SOLUTION

, QUESTION 1 SUGGESTED SOLUTION


PART A
a)
Impairment loss calculation

Cost: 1 725 000 x  1 500 000

1 September 2020 - 30 June 2021 (1 500 000 x 10% x ) 125 000

1 July 2021 – 30 June 2022 (1 500 000 – 125 000p) x 10% 137 500

1 July 2022 – 30 June 2023 (1 500 000 – 125 000– 137 500p) x 10% 123 750

Accumulated depreciation 386 250p

Therefore: Carrying amount = 1 500 000 – 386 250 1 113 750

Recoverable amount is the higher of fair value less cost to sell or value in use

Fair value less costs to sell = 1 100 000 – 15 000 1 085 000

Value in use= 750 000

Therefore: Impairment loss = 1 113 750 – 1 085 000 28 750p

(10)



PART B
a) General Journal of Courier Ladies Ltd
01 November Dr Depreciation 41 250
2022
Cr Accumulated depreciation 41 250p
Current year depreciation

No impairment loss as CA is less than
RA

Dr Accumulated depreciation 251
250P
Dr Non-Current Assets held for sale 948
750
Cr Machine 1 200
000
Reclassification to NCAHS

30 June 2023 Dr Impairment loss (750 000 – 948 198
750) 750
Cr Non-Current Assets Held for 198
Sale 750p
Remeasurement to fair value less
cost to sell at year end