PRACTICAL LECTURE 1
Topic 1: Intangible and tangible fixed assets
Exercise 1a
STARS4ANIMALS plc: accounting period 20X0
GIVEN:
STARS4ANIMALS plc is a company specialised in the purchase and sale of animal feed. When farmers
buy large quantities, the feeds are delivered to farms located within a radius of 100 km.
REQUIRED:
Record all journal entries that result from the following information in the journal of
STARS4ANIMALS plc for the accounting year 20X0 (including end-of-period entries, if necessary).
The closing date of the accounting period is December 31.
01/04/20X0: DIV 20X0/013 (notarial act d.d. 01/04/20X0)
STARS4ANIMALS plc acquires a building for an amount of 900 000,00 EUR. Regarding the transfer of
ownership, 90 000,00 EUR in registration fees will also be charged in relation to the purchase of this
building. The full amount must be transferred to the notary's bank account.
In this case, no VAT is applicable regarding the purchase of this building.
The management body of STARS4ANIMALS plc decides to depreciate the building over a period of
25 years employing the declining balance method. The residual value of the building is estimated at
250 000,00 EUR. The declining balance rate to be applied is 5,39 %.
N° Acc. n° D Acc. n° C Description D C
1
, 05/04/20X0: PI 20X0/034
The notary charges a fee for completing all formalities relating to the acquisition of the building:
10 000,00 EUR + 21 % VAT.
N° Acc. n° D Acc. n° C Description D C
31/12/20X0: DIV 20X0/057
N° Acc. n° D Acc. n° C Description D C
Additional exercise:
Complete the attached extracts from the balance sheet, income statement and notes for accounting
period 20X0.
Note: the solution to these completed financial statements will be made available via Toledo due to
insufficient time during the tutorial to work this out in full.
2
, BALANCE SHEET AFTER APPROPRIATION
Codes Period Previous period
ASSETS
FIXED ASSETS 21/29
Intangible fixed assets 21
Tangible fixed assets 22/27
Land and buildings 22
Plant, machinery and equipment 23
Furniture and vehicles 24
Leasing 25
Other tangible fixed assets 26
Assets under construction and advance payments 27
Financial fixed assets 28
Affiliated companies 280/1
Participating interests 280
Amounts receivable 281
Other companies linked by participating interests 282/3
Participating interests 282
Amounts receivable 283
Other financial fixed assets 284/8
Shares 284
Amounts receivable and cash guarantees 285/8
Amounts receivable after more than one year 29
Trade debtors 290
Other amounts receivable 291
3
, INCOME STATEMENT
Codes Period Previous period
Operating revenues 70/76A
Sales 70
Inventories of finished goods and work and
contracts in progress: increase (decrease) 71
Produced fixed assets 72
Other operating revenues 74
Non-recurring operating revenues 76A
Operating expenses 60/66A
Goods for resale, raw materials and consumables 60
Purchases 600/8
Inventories: decrease (increase) 609
Services and other goods 61
Remuneration, social security and pensions 62
Depreciation and amortisation of and other
amounts written off on intangible and tangible
fixed assets 630
Amounts written off on inventories, contracts in
progress and trade debtors: additions (write-backs) 631/4
Provisions for liabilities and expenses:
appropriations (uses and write-backs) 635/8
Other operating expenses 640/8
Non-recurring operating expenses 66A
Operating profit (loss) 9901
Financial revenues 75/76B
Recurring financial revenues 75
Revenues from financial fixed assets 750
Revenues from current assets 751
Other financial revenues 752/9
Non-recurring financial revenues 76B
Financial expenses 65/66B
Recurring financial expenses 65
Debt expenses 650
Amounts written off on current assets other than
inventories, contracts in progress and trade
debtors: additions (write-backs) 651
Other financial expenses 652/9
Non-recurring financial expenses 66B
Profit (Loss) of the period before taxes 9903
4
Topic 1: Intangible and tangible fixed assets
Exercise 1a
STARS4ANIMALS plc: accounting period 20X0
GIVEN:
STARS4ANIMALS plc is a company specialised in the purchase and sale of animal feed. When farmers
buy large quantities, the feeds are delivered to farms located within a radius of 100 km.
REQUIRED:
Record all journal entries that result from the following information in the journal of
STARS4ANIMALS plc for the accounting year 20X0 (including end-of-period entries, if necessary).
The closing date of the accounting period is December 31.
01/04/20X0: DIV 20X0/013 (notarial act d.d. 01/04/20X0)
STARS4ANIMALS plc acquires a building for an amount of 900 000,00 EUR. Regarding the transfer of
ownership, 90 000,00 EUR in registration fees will also be charged in relation to the purchase of this
building. The full amount must be transferred to the notary's bank account.
In this case, no VAT is applicable regarding the purchase of this building.
The management body of STARS4ANIMALS plc decides to depreciate the building over a period of
25 years employing the declining balance method. The residual value of the building is estimated at
250 000,00 EUR. The declining balance rate to be applied is 5,39 %.
N° Acc. n° D Acc. n° C Description D C
1
, 05/04/20X0: PI 20X0/034
The notary charges a fee for completing all formalities relating to the acquisition of the building:
10 000,00 EUR + 21 % VAT.
N° Acc. n° D Acc. n° C Description D C
31/12/20X0: DIV 20X0/057
N° Acc. n° D Acc. n° C Description D C
Additional exercise:
Complete the attached extracts from the balance sheet, income statement and notes for accounting
period 20X0.
Note: the solution to these completed financial statements will be made available via Toledo due to
insufficient time during the tutorial to work this out in full.
2
, BALANCE SHEET AFTER APPROPRIATION
Codes Period Previous period
ASSETS
FIXED ASSETS 21/29
Intangible fixed assets 21
Tangible fixed assets 22/27
Land and buildings 22
Plant, machinery and equipment 23
Furniture and vehicles 24
Leasing 25
Other tangible fixed assets 26
Assets under construction and advance payments 27
Financial fixed assets 28
Affiliated companies 280/1
Participating interests 280
Amounts receivable 281
Other companies linked by participating interests 282/3
Participating interests 282
Amounts receivable 283
Other financial fixed assets 284/8
Shares 284
Amounts receivable and cash guarantees 285/8
Amounts receivable after more than one year 29
Trade debtors 290
Other amounts receivable 291
3
, INCOME STATEMENT
Codes Period Previous period
Operating revenues 70/76A
Sales 70
Inventories of finished goods and work and
contracts in progress: increase (decrease) 71
Produced fixed assets 72
Other operating revenues 74
Non-recurring operating revenues 76A
Operating expenses 60/66A
Goods for resale, raw materials and consumables 60
Purchases 600/8
Inventories: decrease (increase) 609
Services and other goods 61
Remuneration, social security and pensions 62
Depreciation and amortisation of and other
amounts written off on intangible and tangible
fixed assets 630
Amounts written off on inventories, contracts in
progress and trade debtors: additions (write-backs) 631/4
Provisions for liabilities and expenses:
appropriations (uses and write-backs) 635/8
Other operating expenses 640/8
Non-recurring operating expenses 66A
Operating profit (loss) 9901
Financial revenues 75/76B
Recurring financial revenues 75
Revenues from financial fixed assets 750
Revenues from current assets 751
Other financial revenues 752/9
Non-recurring financial revenues 76B
Financial expenses 65/66B
Recurring financial expenses 65
Debt expenses 650
Amounts written off on current assets other than
inventories, contracts in progress and trade
debtors: additions (write-backs) 651
Other financial expenses 652/9
Non-recurring financial expenses 66B
Profit (Loss) of the period before taxes 9903
4
