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SCHEME OF WORK
WEEK:
1. Revision of SS1 work/ Amorization and depletion of fixed assets.
2. Straight Line method of depreciation-Meaning, formula, advantages, depreciation schedule and working exercise.
3. Reducing/ Diminishing Balance method- meaning, formula, format and working exercise.
4. Revaluation and Sum of the year digits methods- meaning, format and working exercise.
5. Provisions for Bad debts and doubtful debts - meaning, factors, differences between bad debts and doubtful debts with working exercise.
6. Bad debts and provision for doubtful debts recovered with working exercise, Provision for Discount Received and Allowed, Meaning and accounting entries.
7. Prepayments and Accounts- definition, prepaid income and Expenditure, Accrued income and expenditure, Distinction between the terms and ledger entries.
8. Prepayments and Accruals working exercise.
9. Preparation of Final accounts with Adjustment, trading, profit and loss Accounts.
10. Preparation of final accounts with Adjustment Balance sheet.
11. Revision

TOPIC: Amortization and depletion of fixed assets
REFERENCE BOOK
a. Essential Book Keeping for S.S.S by O.A. Longe
b. Simplified Book keeping Accounting for S.S.S. by F.C. Olatunji
c. Book keeping and account for S.S.S. students in West Africa by Lanre Akinpelu

BEHAVIOURAL OBJECTIVES: At the end of the lesson, student should be able to:
a. Define depreciation

TOPIC: Depreciation of Assets
REFERENCE BOOK
a. Essential Book Keeping for S.S.S by O.A. Longe
b. Simplified Book keeping Accounting for S.S.S. by F.C. Olatunji
c. Book keeping and account for S.S.S. students in West Africa by Lanre Akinpelu

BEHAVIOURAL OBJECTIVES: At the end of the lesson, student should be able to:
a. Define depreciation
b. State the causes of depreciation
c. List elements of depreciation

CONTENT
Definition
Depreciation can be defined as reduction in the economic service potentials of a fixed asset as a result of wears, tears, usage and passage of time.
Reasons for charging depreciation
a. To reduce tax payable on profit of the company
b. For the replacement of the asset at the end of its useful life
c. To spread the cots of the asset over its useful life.

Cause of Depreciation
a. Physical factors: this is a natural factor that may lead to depreciation in the quality or value of an asset
b. Wear and Tear: This is as a result of excessive use of an asset. It is the main factor in diminishing value of machinery, M/v or vehicles and plant
c. Obsolescence: this occurs through a better inventor or latter economic inversion that made previous manufactured model to be uneconomical or much older in turning out a better output e.g. the ears produced in the 40s compared with latest models of the 90s.
d. Fluctuation in Prices: This is another important factor regarded as economic factor. Where there is a general change in the prices of depreciation asset or foreign exchange rates.
e. Passage of time: Depreciation occurs in some assets with the effusion or time e.g. leaseholds, patents and copyrights
f. Depletion: Some natural resources like gold, oil or tin deposits become worthless when the deposits have been depleted.
g. Inadequacy: As a result of expansion in the productive capacity of company, an asset may become too small or inadequate and thus required replacement for bigger ones.

Elements of Depreciation
a. Original cost: The cost incurred in purchasing the assets.
b. Estimated value: This is the scrap value. The amount which can be recovered when it is sold.
c. Estimated useful life: The expected number of years through which an asset can last.

EVALUATION:
a. Define depreciation
b. State and explain five(5) causes of depreciation

ASSIGNMENT:
a. Mention three(3) reasons for charging depreciation
b. State three(3) elements of depreciation
c. Identify three(3) causes of depreciation

TOPIC: Depreciation of Assets
REFERENCE BOOK
a. Essential Book Keeping for S.S.S 2 by O.A. Longe
b. Simplified Book keeping Accounting for S.S.S. by F.C. Olatunji
c. Book keeping and account for S.S.S. students in West Africa by Lanre Akinpelu

SUBTOPIC: Accounting Entries for Depreciation of fixed assets.
BEHAVIOURAL OBJECTIVES: At the end of the lesson, student should be able to prepare depreciation account.

CONTENT
The cost of a machine is 10,000. The residual value is 4,000. It is expected to last for 4 years. Use the straight line method to prepare the deprecation schedule and the necessary accounting entries.

view solution below
https://skydrive.live.com/P.mvc#!/view. ... =documents

EVALUATION: State the accounting entries for depreciation account

ASSIGNMENT: Essential financial accounting pg 140 Exercise 142

TOPIC: Depreciation
REFERENCE BOOK
a. Essential Book Keeping for S.S.S by O.A. Longe
b. Simplified Book keeping Accounting for S.S.S. by F.C. Olatunji
c. Book keeping and account for S.S.S. students in West Africa by Lanre Akinpelu


SUBTOPIC: Sales of Fixed Assets
BEHAVIOURAL OBJECTIVES: At the end of the lesson, students should be able to prepare the accounts on sales of fixed Assets.

CONTENT: Sale of fixed Assets
When assets are sold, during the trading period, there will be either profit or loss
Accounting entries.

The following accounts will be opened:
a. Asset a/c
b. Provision for depreciation a/c
c. Assets disposal a/c
d. Profit & Loss a/c
- Cost price of asset:
Dr Asset disposal A/c
Cr Asset A/c
- Accumulated Depreciation
Dr. Provision for Dep. a/c
Cr Asset disposal a/c
- Remittance received on disposal
Dr Cash book
Cr Assets Disposal a/c
- Profit on Sales of Assets
Dr Assets Disposal a/c
Cr profit and loss a/c
- Loss on sales of assets
Dr Profit & loss a/c
Cr Assets disposal a/c
Examples
A machine cost 15,000 and is to be depreciated at 20% for 4years on straight line basis. It was disposed off for 5,500 at end of 4th year. Prepare the necessary accounts using the old method.

view calculation below
https://docs.google.com/leaf?id=0Bz3Mh6 ... 5&hl=en_US

EVALUATION: State the accounts to open in the preparation of sales of fixed assets.

ASSIGNMENT:
Essential financial accounting page 140 Exercise 14.1A

TOPIC: Reserves & Provision
REFERENCE BOOK
a. Essential Book Keeping for S.S.S by O.A. Longe
b. Simplified Book keeping Accounting for S.S.S. by F.C. Olatunji
c. Book keeping and account for S.S.S. students in West Africa by Lanre Akinpelu


SUBTOPIC: Definition & Meaning of Reserves & Provision
BEHAVIOURAL OBJECTIVES: At the end of the lesson, students should be able to.
a. Define reserves and provision
b. State the differences between reserves and provision

CONTENT: Definition of Reserves
Reserves are amount set aside out of profit and other surpluses which are not designed to meet any liability of losses but are retained in the business in order to strengthen the financial position of a business.

Provisions:
They are set aside out of profit to provide for depreciation, renewals elimination in the value of asset of which the amount can not be determined with substantial accuracy. Examples include: provision for depreciation, provision for doubtful debts, provision for discount allowances.

Bad debts:
These are debts which have become irrecoverable. It will appear on the debit side of p & l a/c as a charge. It occurs as a result of the inability of the a/c of debtors in the balance sheet. It is treated as expenses in p & l a/c.

Provision for doubtful debts
This is on estimated expense for bad debts, which can not be calculated with substantial accuracy. This is charged to the p & l as an expense is therefore debited.

Differences between reserves & provisions:
a. Reserves are set aside to strengthen the financial position of the business while provision are set aside for specific purposes.
b. Reserves are not used to meet any liability while provisions are designed to meet any known liability.
c. Reserves are appropriation of the profit while provision is a charge against profit.
d. Reserves appear in the p & l appropriation a/c while provision appear in the p & l a/c

EVALUATION: Define reserves and provisions (b) give at least 2 examples each

ASSIGNMENT
a. Explain the following terms;
a. Provision for bad debts
b. Bad debts
b. State three (3) differences between reserves and provisions

TOPIC: Provision for Bad Debts
REFERENCE BOOK
a. Essential Book Keeping for S.S.S by O.A. Longe
b. Simplified Book keeping Accounting for S.S.S. by F.C. Olatunji
c. Book keeping and account for S.S.S. students in West Africa by Lanre Akinpelu


SUBTOPIC: Provision for Bad debts
BEHAVIOURAL OBJECTIVES: At the end of the lesson student should be able to:
a. Define bad debts
b. Prepare bad debts accounts

CONTENT: Definition
Bad debts are debts which have become irrecoverable. It will appear on the debit side of profit and loss account as a charge. It will reduce the account of debtors in the balance sheet.

Provision for doubtful debts
This is an estimated expense for bad debts, which can not be calculated with substantial accuracy. This is charged to the profit and loss as an expenses.

The following accounts will be opened
a. Bad debts a/c
b. Provision for doubtful debts
c. Profit and loss a/c
d. Balance sheet
Example:
A business started trading on 1/1/99 during the two (2) years ended 31/12/99 & 2000 the following debts were written off to bad debts a/c on the dates stated

15th June 1999 Segun 200
30th October 1999 Bimpe 300
15th December 1999 Ayo 450
23rd May 2000 Kehinde 150
31st August 2000 Ilesanmi 400
30th December 2000 Joy 400
On 31/12/99, the total debtors remaining were 30,000. It was decided to make provision for doubtful debts of 1,500 on 31/12/2000, the total debtors remaining were 25,000. It was decided to make provision for doubtful debts to 2,440. You are required to prepare the necessary accounts

view bad debt account
https://docs.google.com/leaf?id=0Bz3Mh6 ... l&hl=en_US

EVALUATION: Explain bad debts and provisions

ASSIGNMENT: Essential financial accounting. Exercise 13.2A

TOPIC: Bad Debts & Provision. Discount Allowed
REFERENCE BOOK
a. Essential Book Keeping for S.S.S by O.A. Longe
b. Simplified Book keeping Accounting for S.S.S. by F.C. Olatunji
c. Book keeping and account for S.S.S. students in West Africa by Lanre Akinpelu



SUBTOPIC: Provision for discounts
BEHAVIOURAL OBJECTIVES: At the end of the lesson students should be able to:
a. Define provision for discount on debtors
b. Post the items to the ledger
c. Post the items to the balance sheet

CONTENT: Provision for discount on debtors
This is a charge made against profit in order to provide for an expected loss in the form shape of discount that will have to be allowed to the firms debtors on payments of their a/cs. It should be calculated on the net amount of debtors after deducting any provision for doubtful debts.

Examples
The debtors balance as at 31st Dec. are 20,000. A bad debts provision of 10% is made and also a discount provision of 10%. The discounts allowed during the year amounted to 700. The discounts provision on 1st January was 800
Show the necessary account to record this transaction

view workings below
https://docs.google.com/leaf?id=0Bz3Mh6 ... j&hl=en_US

EVALUATION: Explain the term discount allow and provision for discount allowed.

ASSIGNMENT: Essential financial accounting. Exercise 13.3A page 122.

TOPIC: Bad debts & provisions
REFERENCE BOOK
a. Essential Book Keeping for S.S.S by O.A. Longe
b. Simplified Book keeping Accounting for S.S.S. by F.C. Olatunji
c. Book keeping and account for S.S.S. students in West Africa by Lanre Akinpelu



SUBTOPIC: Provision for discount received
BEHAVIOURAL OBJECTIVES: At the end of the lesson, students should be able to:
a. Define provision for discount on creditors
b. Prepare provision for discount on creditors account.

CONTENT: Provision for discount on creditors
This is an addition to the profits provide for those discounts expected to be received on payment of the firm's creditors.

Accounting Entries
Provision for discount received
Dr - provision for discount received a/c
Cr - profit and loss a/c

Example:
On 1st January, the provision for discount on creditors was N2,000. The discounts received during the year amounted to N2,100. The creditors at 31st December was N12,000 and a new provision of 20% is required. Show the ledger, profit and loss a/c and balance sheet.

view workings below
https://docs.google.com/leaf?id=0Bz3Mh6 ... z&hl=en_US

EVALUATION: Explain the term discount received and provision for discount received.

ASSIGNMENT: Essential financial accounting. Exercise 13.4A page 122

TOPIC: Treatment of provision in the balance sheet
REFERENCE BOOK
a. Essential Book Keeping for S.S.S by O.A. Longe
b. Simplified Book keeping Accounting for S.S.S. by F.C. Olatunji
c. Book keeping and account for S.S.S. students in West Africa by Lanre Akinpelu


SUBTOPIC: Treatment of provision in the balance sheet
BEHAVIOURAL OBJECTIVES: At the end of the lesson, students should be able to post the items to the balance sheet.

view content below
https://docs.google.com/leaf?id=0Bz3Mh6 ... 5&hl=en_US

EVALUATION: Differentiate between provision for bad debts and provision for discounts on creditors.

ASSIGNMENT: Exercise 13.3 Essential accounts