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Solution:: Non-Current Assets

The document outlines a balance sheet for Alquimia Spanish Restaurant, detailing non-current and current assets, liabilities, and equity, with total assets amounting to £3,253,000 and total equity of £1,300,000. It discusses the annual depreciation of assets, highlighting that the value of assets decreases by £20,000 each year until they are fully depreciated. The activity is identified as yearly depreciation, which spreads the cost of assets over their useful life.

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16 views2 pages

Solution:: Non-Current Assets

The document outlines a balance sheet for Alquimia Spanish Restaurant, detailing non-current and current assets, liabilities, and equity, with total assets amounting to £3,253,000 and total equity of £1,300,000. It discusses the annual depreciation of assets, highlighting that the value of assets decreases by £20,000 each year until they are fully depreciated. The activity is identified as yearly depreciation, which spreads the cost of assets over their useful life.

Uploaded by

nawal zaheer
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Lesson 4 Starter Activity – Build a Balance Sheet for Alquimia Spanish Restaurant

Solution:
Non-current assets
Property, plant and equipment 3,001,000

Current assets
Trade receivables 135,000
Inventories 42,000
Cash 75,000

Total assets 3,253,000

Current liabilities

Net current assets

Non-current liabilities
Trade payables (219,000)
Bank loans (1,734,000)
Total liabilities (1,953,000)

Net assets

Equity
Share capital 450,000
Reserves and retained profit 850,000
Total equity 1,300,000

Year Value of asset recorded on balance Amount depreciated annually


Lesson 4 Starter Activity – Build a Balance Sheet for Alquimia Spanish Restaurant

sheet at end of financial year.

2015 £60,000 20,000

2016 £40,000 20,000

2017 £20,000 20,000

2019 0

1. What has happened to the value of the asset?


The value of assets has been recorded on the balance sheet at the end of the financial year.
The value of assets are depreciated every year with 20,000 depreciation.
2. Why do you think a business does this to its assets?
The business depreciate its assets while the business assets are amortized. The business
spreads the assets costs over the useful life it.
3. What do you think this activity is called?
The activity is called yearly depreciation, as the depreciation is done at the end of the year.

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