Exercise 14.

1 Purchase of a non-current asset - Knibs and Pens

a

General Journal

Date Details Debit $ Credit $

Explanatio
n

Explanatio
n

Explanatio
n

© Simmons & Hardy 1 Cambridge University Press, 2019

e

Accounting assumption
Explanation

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Exercise 14.2 Purchase of a non-current asset - Matt’s Mowers

Definition

General Journal

Date Details Debit $ Credit $

Explanatio
n

MATT’S MOWERS
Balance Sheet (extract) as at 30 April 2025

$ $
Current Assets

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Exercise 14.3 Depreciation methods - Kristine’s Kites
a

General Journal

Date Details Debit $ Credit $

Accounting assumption
Explanation

Explanatio
n

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d

Explanatio
n

Explanatio
n

© Simmons & Hardy 5 Cambridge University Press, 2019

Exercise 14.4 Reducing balance depreciation - Benanee Rubber

Assumption

Calculation

Depreciation of Van – year ended 30 June 2025 $

General Journal

Date Details Debit $ Credit $

BENANEE RUBBER
Balance Sheet (extract) as at 30 June 2025

$ $
Non-Current Assets

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e

Calculation

Depreciation of Van – year ended 30 June 2026 $

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Exercise 14.5 Reducing balance depreciation - Heavenly Designs

a
Calculation

Depreciation of Computers $

General Journal

Date Details Debit $ Credit $

HEAVENLY DESIGNS
Balance Sheet (extract) as at 30 June 2026

$ $
Non-Current Assets

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d
Explanatio
n

e
Qualitative characteristic
Explanation

f
Calculation

Year of purchase

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© Simmons & Hardy 10 Cambridge University Press, 2019
Exercise 14.6 Comparing depreciation methods - Babyland

Reason

Reason

Information
Justification

Calculation

Depreciation of Shop equipment – straight-line method $

Calculation

Depreciation of Shop equipment – straight-balance method $

© Simmons & Hardy 11 Cambridge University Press, 2019

f
Explanatio
n

Straight-line Reducing Balance Profit

Historical Carryin
Year Acc. Carrying Dep. Acc. Dep. Higher
Cost g
Dep. Value Expense Dep. Expense (Lower)
Value
2026
2027
2028
2029
2030

© Simmons & Hardy 12 Cambridge University Press, 2019

Exercise 14.7 Graphing depreciation - Justinian Printing

Photocopiers

Depreciation method
Justification

Office equipment

Depreciation method
Justification

Line A

Represents
Justification

Line B

Represents
Justification

Historical cost of Photocopiers $

© Simmons & Hardy 13 Cambridge University Press, 2019

d
Discussion

Explanatio
n

© Simmons & Hardy 14 Cambridge University Press, 2019

Exercise 14.8 Cash sale of a non-current asset - Party Pots

General Journal

Date Details Debit $ Credit $

General Ledger
Van (A)

Date Cross-reference Amount $ Date Cross-reference Amount $

Aug. 1 Balance 24 000

Accumulated depreciation of Van (–A)

Date Cross-reference Amount $ Date Cross-reference Amount $

Aug. 1 Balance 19 000

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 Disposal of Van
Date Cross-reference Amount $ Date Cross-reference Amount $

Loss on Disposal of Van (E)

Date Cross-reference Amount $ Date Cross-reference Amount $

Explanatio
n

Explanatio
n

© Simmons & Hardy 16 Cambridge University Press, 2019

Exercise 14.9 Cash sale of a non-current asset - Triffic Toys

Calculation

Carrying value $

General Journal

Date Details Debit $ Credit $

© Simmons & Hardy 17 Cambridge University Press, 2019

c

General Ledger
Fittings (A)

Date Cross-reference Amount $ Date Cross-reference Amount $

Jan. 1 Balance 36 000

Accumulated depreciation of Fittings (–A)

Date Cross-reference Amount $ Date Cross-reference Amount $

Jan. 1 Balance 32 800

Disposal of Fittings

Date Cross-reference Amount $ Date Cross-reference Amount $

Profit on Disposal of Fittings (R)

Date Cross-reference Amount $ Date Cross-reference Amount $

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d
Reason 1

Reason 2

TRIFFIC TOYS
Income Statement (extract) for quarter ended 31 March 2025

$ $
Other revenue

30 April 2025

Calculation
Accumulated depreciation $

Carrying value $

Profit (Loss) on Disposal $

30 June 2025

Calculation
Accumulated depreciation $

Carrying value $

Profit (Loss) on Disposal $

© Simmons & Hardy 19 Cambridge University Press, 2019

Exercise 14.10 Cash sale of a non-current asset - Vicki’s Vinyls

Explanatio
n

Calculation

Profit (Loss) on Disposal of Furniture $

Explanatio
n

VICKI’S VINYLS
Income Statement (extract) for October 2025

$ $
Other expenses

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e

General Journal

Date Details Debit $ Credit $

© Simmons & Hardy 21 Cambridge University Press, 2019

Exercise 14.11 Trade-in of a non-current asset - Swing Seats

Definition

General Journal

Date Details Debit $ Credit $

General Ledger
Van (A)

Date Cross-reference Amount $ Date Cross-reference Amount $

May 1 Balance 30 000

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 Accumulated depreciation of Van (–A)

Date Cross-reference Amount $ Date Cross-reference Amount $

May 1 Balance 20 000

Disposal of Van

Date Cross-reference Amount $ Date Cross-reference Amount $

Loss on Disposal of Van

Date Cross-reference Amount $ Date Cross-reference Amount $

Bank
Date Cross-reference Amount $ Date Cross-reference Amount $

Definition

Cause 1
Cause 2

© Simmons & Hardy 23 Cambridge University Press, 2019

Exercise 14.12 Trade-in of a non-current asset - Quilts Inc.

General Journal

Date Details Debit $ Credit $

General Ledger
Cash register

Date Cross-reference Amount $ Date Cross-reference Amount $

June 1 Balance 4 000

© Simmons & Hardy 24 Cambridge University Press, 2019

 Disposal of Cash register
Date Cross-reference Amount $ Date Cross-reference Amount $

Bank

Date Cross-reference Amount $ Date Cross-reference Amount $

Explanatio
n

Explanatio
n

© Simmons & Hardy 25 Cambridge University Press, 2019

Exercise 14.13 Disposal of a non-current asset and financial reports -
Kyabram Kites.

a/c

General Journal

Date Details Debit $ Credit $

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b

KYABRAM KITES
Post-adjustment Trial Balance as at 30 June 2025

Account Debit $ Credit $

Total

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d
KYABRAM KITES
Income Statement for June 2025

$ $
Revenue

Less Cost of Goods Sold

Gross Profit

Adjusted Gross Profit

Add Other revenue

Less Other expenses

Net Profit

Action 1

Action 2

© Simmons & Hardy 28 Cambridge University Press, 2019

f

Straight-line method: 10%

Calculation

Depreciation expense $
Profit: Higher (Lower)

Straight-line method: 7%

Calculation

Depreciation expense $
Profit: Higher (Lower)

Explanatio
n

Explanatio
n

© Simmons & Hardy 29 Cambridge University Press, 2019

i

KYABRAM KITES
Balance Sheet as at 30 June 2025

$ $ $ $
Current Assets Current Liabilities

Non-Current
Assets

Non-Current
Liabilities

Owner’s equity

Total Assets Total Equities

© Simmons & Hardy 30 Cambridge University Press, 2019