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Assignment 1. Distinguish between capital and revenue expenditure Titobiloluwa Ltd took delivery of an equipment on 1 April 2018, the beginning of its financial year. The list price of the equipment was N359,999 but Titibiloluwa Ltd was able to negotiate a price of N350,000 with the supplier. However, the supplier charged an additional N15,000 to install and test the equipment. The supplier offered a 5% discount if Titobiloluwa Ltd paid for the equipment and the additional installation costs within seven days. Titobiloluwa Ltd was able to take advantage of this additional discount. The installation of special electrical wiring for the computer cost N5,100. after initial testing certain modifications costing N2200 proved necessary. Titobiloluwa Ltd insured the machine against fire and theft at a cost of N3,500 per annum. A maintenance agreement was entered into with ABC company. Under this agreement, ABC plc promised to provide 24 hour breakdown cover for one year. The cost of the maintenance agreement was N40,000. Required: Calculate the acquisition cost of the equipment to Titobiloluwa Ltd during the financial year ended 31st March, 2019. 2. A business started trading on 1 January 2016. during the two years ended 31 December 2016 and 2017 the following debts were written off to the Bad Debts Account on the dates stated: 31 August 2016 Kemi N8,500 30 September 2016 Adeola N14,000 28 February 2017 Lejoka N18,000 31 August 2017 Kolapo N6,000 30 November 2017 Onaolapo N25,000 On 31 December 2016, there had been a total debtors remaining of N450,000. it was decided to make a provision for doubtful debts of N55,000. a On 31 December 2017, there had been a total debtors remaining of N473,000. it was decided to make a provision for doubtful debts of N60,000. Required: Show the i. Bad debts Account and the provision for Doubtful Debts Account for each of the two years ii. Relevant extracts from the statement of financial position as at 31 Dec. 2016 and 2017 a Assignment 1. Distinguish between capital and revenue expenditure Titobiloluwa Ltd took delivery of an equipment on 1 April 2018, the beginning of its financial year. The list price of the equipment was N359,999 but Titibiloluwa Ltd was able to negotiate a price of N350,000 with the supplier. However, the supplier charged an additional N15,000 to install and test the equipment. The supplier offered a 5% discount if Titobiloluwa Ltd paid for the equipment and the additional installation costs within seven days. Titobiloluwa Ltd was able to take advantage of this additional discount. The installation of special electrical wiring for the computer cost N5,100. after initial testing certain modifications costing N2200 proved necessary. Titobiloluwa Ltd insured the machine against fire and theft at a cost of N3,500 per annum. A maintenance agreement was entered into with ABC company. Under this agreement, ABC plc promised to provide 24 hour breakdown cover for one year. The cost of the maintenance agreement was N40,000. Required: Calculate the acquisition cost of the equipment to Titobiloluwa Ltd during the financial year ended 31st March, 2019. 121 December