Question

In: Accounting

4.-A manufacturing company sold a machine in 2018 with a profit of 80,000 TL to buy...

4.-A manufacturing company sold a machine in 2018 with a profit of 80,000 TL to buy a new one and transferred the profit to the account of special funds.

-The company then purchased a new machine on 01.09.2018 with a price of 300,000 TL + 18% VAT. 20.000 TL + 18% VAT has been paid for the transportation and assembly of the machine to the enterprise.

- The entity used a loan of 300,000 TL on 01.09.2018 for the purchase of this machine. The loan has a 24-month term and an annual interest rate of 14%. The loan repayment schedule is as follows:

31 August 2019 150.000 TL principal + interest

31 August 2020 150.000 TL principal + interest

The machine's service life is 5 years and the enterprise has decided to use the straight-line method for machines.

REQUESTED:                                                                                                                              30 points

Write the balances of the accounts related to this transaction as of 31.12.2018 and 31.12.2019 in the table below.

HPP.                                           ACCOUNT NAME                                                                        BALANCES                                                                                          

NO                                                                                                                       2018                                  2019                           

                                        

                                                                                                 DEBT                      DUE                 DEBT           DUE

181 Income Accruals

253 Plant Machinery and Devices

257 Accumulated Depreciations

300 Bank Loans

303 Uzun Vd. Krd. Mother. Installments and Interests

381 Expense Accruals

400 Bank Loans

549 Special Funds

642 Interest Income

730 General Production Expenses (Depreciation Expense)

780 Financing Expenses

Solutions

Expert Solution

2018 Special fund - profit on sale of old machinery 80000 TL
All amount are in TL
COST VAT TOTAL
01/09/2018 Purchase of New machinery 300000 54000 354000
Transportaion and assembly cost 20000 3600 23600
TOTAL 320000 57600 377600
Note Transportation and assembley cost is related to purchase of machinery
and hence it should be capitalised.
01/09/2018 Loan for machinery 300000
Term 24 months
Interest 14%
Machine repayment schedule Principal Interest TOTAL
31/08/2019 150.000 TL principal + interest 150000 42000 192000
31/08/2020 150.000 TL principal + interes 150000 21000 171000
300000 63000 363000
For second year the interest will be for 150000 TL since one pricipal is repayed
Machine cost 320000
Machine service Life 5 Years
Depreciation under stright line method for each year 64000
value in TL
HPP NO ACCOUNT NAME DEBIT/CREDIT BALANCES
2018 2019
181 Income accruals
253 Plant and machinery and devices DR 320000 320000
257 Accumulated depreciation CR 64000 128000
300 Bank Loans CR 150000 0
303 Uzun.Vd.Krd.Mother Instalment and interest CR 42000 21000
381 Expenses accruals
400 Bank Loans CR 150000 0
549 Special funds CR 8000
642 Interest income
730 General Production expenses (depreciation) DR 64000 64000
780 Finance expenses 42000 21000

ekkarill92 answered 1 year ago
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