ACCOUNTING FOR FIXED ASSERTS (A CASE STUDY OF COCA-COCA BOTTLING COMPANY PLC 9TH MILE CORNER)

1.0INTRODUCTION 1.1BACKGROUND OF THE STUDY Fixed Assets are those assets of a business which are of material value, like property, plant and equipment and other assets with relatively permanent life acquired by the enterprise for use in production or supply of goods or instructed with intention of being used on a continuing  basis or for administrative purpose and many include items held for the resale or for conversion into cash in the ordinary source of business. However, there are other long lived assets which we cannot see such ones are classified as in tangible assets. They are: Goodwill, trademark.  Be it tangible or intangible all fixed assets represent a bundle of future services which are paid for in advance and used subsequently in the process of generating revenue. Basically, in a bottling company, there are only three important stages to note down in records of the company as it relates to the fixed assets in liquidation.  They are: -The stage of acquisition of the fixed assets -The stage of provision for depreciation of fixed assets -The third stage is the time of the period when the assets must have been useless for the company, then the management can then decide to sell if off and make replacement.
For better understanding of the accounting treatment of fixed assets, its acquisition, depreciation and disposal the researcher has chosen the traditional “T” account to illustrate this point. Whenever an assets is acquired by a firm, the cost of the assets is always debited to that asset account in the firm’s books and the corresponding entry, will be to credit the cash or bank account. At the same time, when the asset must have been deemed useless, then it can be sold out as scrap.  The cost of the disposal will be credited to the asset account while the cash or bank account of the firm will be debited.  The assets depreciation account is equally created. On this, the cost of disposal is debited and the total depreciation by the assets as at the date of disposal credited. The third account is the disposal account.  On this the cost of the assets is debited while the total amount realized from the depreciation will be credited. Also to be credited is the profit and loss on the disposal. At this point, a typical example of purchase depreciation and final disposal of an asset (machine) use din production will  be illustrated using  a ‘T’ account.
MACHINE ACCOUNT Jan.  2000  cost    xxx      Balance  c/dxx xx 
MACHINERY DEPRECIATION To machinery Disposal A/Cxx                                 xx                Balance b/d                   xx       xx
MACHINERY DISPOSAL A/C Machine cost xx  bank (Disposal)                          xx        Machine Dep (D/C)                  xx  Gain on disposal   xx  loss on disposal                           xx                                xx       xx
this ‘T’ account to a part from producing the correct figure is also extremely easy to follow. PROPERTY, PLNT AND EQUIPMENT The cost of an item, property, plant and equipment comprises to purchase price, including import duties and non-refundable purchase, taxes and any directly attributable costs of bringing the assets to working condition for its intended use.  Usually trade discounts and rebates deducted in arising at such purchase price when a fixed assets in purchased and non-cash consideration is also given, the cost of the asset is the cash and plus the fair market value of the non-cash consideration. Lost represents the net sacrifice made or be made whether the sacrifice is parting with cash or parting with any other things of value in acquiring the fixed asset and getting it to a condition it can be used. The acquisition of a fixed asset in recorded simply by debiting the related fixed assets at cost account and crediting either bank or the suppliers account. However, certain costs associated with fixed assets should be written off immediately through the profit and loss account and should never be shown as part of the cost of the fixed assets. In the experience of the researcher, the warning sign as adopted by the Coca-Cola bottling company is the letter’s re’ 4.   In other words, replacement.  Repairs and renewal to fixed assets are expenses. Thus the cost of the machine is debited to fixed assets but the cost of replacing the engine of an existing vehicle is an expense that is debited to profit and loss account of the Coca-Cola bottling company plc 9th mile corner Enugu
TABLE OF CONTENTS
Title pageApproval pageDedicationProposalAcknowledgementTable of contents
CHAPTER ONE1.0Introduciton1.1background1.2Statement of problems1.3The objective of the study1.4Significance of the study1.5Scope and limitations of the study1.6Time1.7Definition of terms1.8Hypothesis
CHAPTER TWO2.0Literature review2.1Components of acquisition of cost2.2Recognition of interest on deferred payment contracts2.3Components of cost of self constructed property2.4Consideration other than cash2.5Amount substituted for historical cost2.6Requirement and disposal2.7Depreciation of fixed assets2.8Causes of depreciation2.9Provision for depreciation as allocation of cost.2.10Main method of calculating provision for depreciation2.11Accounting treatment of depreciation
CHAPTER THREE3.0Research method and methodology3.1Research methods used3.2Descriptions of respondents3.3Determination of sample size
CHAPTER FOUR4.0PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA
CHAPTER FIVE5.0Summary of findings conclusions and recommendation5.1Summary of finding5.2Conclusion5.3RecommendationBibliographyAppendix