Bank Cash

Question 1.1 Bank balance 31/12 16380 Book balance 31/12

Deposit in transit 17150 Service charge

Correction book error

Adjusted bank balance 33530 Adjusted book balance

Cash 3000
unearned service revenu 3000
service to be provided, paid in advance on 26/12
Q 1.2

Unearned service revenu 250

Service revenu 250
Adjustment on 31/12

Prepaid insurrance 2400

Cash 2400
Payment of insurrance on 31/11
Q 1.3

Insurrance expense 100

Prepaid insurrance 100
Adjustment on 31/12

Investment in stock 5000

Cash 5000
Purchase of stock on 12/12

Cash 3360
Investment in stock 3000
Q 1.4

Gain on sale of investement 360

Sale of purchased stock on 24/12

Investment in stock 280

Unrealized gain on investment 280
Adjustment on 31/12

Note receivable 100000

Service revenu 100000
Services performed on 01/11
Q 1.5

Interest receivable 986.30

Interest revenu 986.30
Adjustment on 31/12
Cash
33690

-40
-120

33530
Gross sales 900000
Of which 300000 on credit
of which 280000 paid with 2% discount
20000 still outstanding
Of which 200000 paid with credit card with 3% fee to credit card corporation
Of which 400000 paid in cash

Q 2.1 Net sales 894400

Uncollectible account expense 3000

Q 2.2
Allowance for unc. Acc. Exp. 3000

Before adjustment
Accounts receivable 20500
Allowance 1000
Q 2.3
Adjustment
Uncollectibe acc. Exp. 3650
Allow. For unc. Acc. Exp. 3650

a) NRV 17500
b) NRV 15850
d corporation
 Beginning 100 units at 10 for a total of 1000
Purchase 400 units at 11 for a total of 4400
Sale 350 units at 15 for a total of 5250
Purchase 150 units at 12 for a total of 1800

Cash 5250
Question 3.1

Sales revenu 5250

COGS 3780
Inventory 3780

Inventory 1800
Accounts payable 1800
Question 3.2

Purchase on 14/03

Accounts payable 1800

Cash 1764
Purchase discounts 36
Payment on 21/03

Net sales= 5250

Q 3.3 COGS= 3780
Gross profit= 1470

units in inventory 300

price/unit 11.4
Q 3.4

Inventory value 3420

on
on 2-Mar
on 14-Mar
Share Capital

Initial Public offering($6 per share) 475000 2,850,000.00

Second Share Issue($6 per share) 380000 2,280,000.00
Share divident par value 359,000.00
Share Capital 5,489,000.00

Additional Paid in Capital

Initial Public offering ($8-$6) 475000 950,000.00
Second Share Issue($10-$6 ) 380000 1,520,000.00
Treasuary share sales($10-$7.25) 40000 110,000.00
Share Divident 282,150.00
Paid-in capital in excess of par-ordinary 2,862,150.00

Retained Earnings
Net income 1000000
Cash dividends -600000
Share dividends -641250
Retained earnings (deficit) -241250

Treasury Shares
Treasury share purchase -( 60000 @$7.25) 60000
Treasury share sales - (40000 @$10) 40000
Treasury Shares -145000

Total share holder equity 7,964,900.00

Date Account Title & Explanation DEBIT CREDIT
Feb-13 Cash (5400 x $6) 32400
Share capital (5400 x $4) 21600
Paid-in capital in excess of par ordinary 10800

Jun-07 Retained earning 210

Dividend payable (310 * 0.7) 210

Jun-24 Dividands Payable 210

Cash 210

Aug-09 retained earning

(6500+5400 x10% x 7) 8330
Share capital
(6500+5400 x10% x 4) 4760
Paid-in capital in excess of par ordinary 3570

Oct-26 Treasuary shares (500 x$8) 4000

Cash 4000

Nov-20 Cash (200 x 13) 2600

Treasuray shares (200 x8) 1600
Paid-in capital from treasury share transaction 1000
Date ACCOUNT TITLES &EXPLANATIONS DEBT CREDIT
20X6
Oct-31 Notes Receivables - Buy Low food 36000
Sales Revenue 36000

Dec-31 Interest Receivables (36000 x.065 x 2/12) 390

Interest revenue 390

20X7
Jan-31 Cash ( with 3 months interst) 36585
Note receivable 36000
Interest receivable 390
Iinterest revenu 195

Feb-18 Note Receivable - Dutton Market 7400

Account Receivable - Dutton Market 7400

Feb-19 Cash 7300

Financing expense 100
Notes receivable - Dutton market 7400

Nov-11 Notes Receivable - Street Provisions 16400

Cash 16400

Dec-31 Interst receivable (16400*0,095*(50/365)) 213

Interest Revenue 213

REQ 2
20X7 20X6
Current Assets
Note receivable 16400 3600
Interest Receivable 213 390
Interst 6.50%
Months 2