EXERCISE 6.

1
(Journal)
-------- ------ December 16 ------------------- ---------------
(1) 228 Vehicles 14,000 (to pay in June 2005)
(1) 173 Supplier of L.T fixed assets 14,000
-------- ------ ----------------------------------------------- ------------------- ---------------
(2) 435 Customers doubtful debts 15,000
(2) 430 Customers 15,000
-------- ------ ----------------------------------------------- ------------------- ---------------
(2) 694 allocation provision bad debts 15,000
(2) 490 provision for bad debts 15,000
-------- ------ December 19 ------------------- ---------------
(3) 328 Office supplies 5,000
(3) 572 Banks 5,000
-------- ------ December 24 ------------------- ---------------
(4) 430 Customers 9,750
(4) 700 Sales 9,750
-------- ------ December 28 ------------------- ---------------
(5) 650 Loses on bad debits 15,000
(5) 435 Customers doubtful debts 15,000
-------- ------ ----------------------------------------------- ------------------- ---------------
(5) 490 Provision on bad debts 15,000
(5) 794 Applic.on prov. for bad debts 15,000
-------- ------ December 29 ------------------- ---------------
(6) 627 Advertising, publicity & Public relat. 5,000
(6) 570 Cash 5,000
-------- ------ ----------------------------------------------- ------------------- ---------------
(7) 430 Customers 15,000
(7) 435 Customers doubtful debts 15,000
-------- ------ ----------------------------------------------- ------------------- ---------------
(7) 490 Provision on bad debts 15,000
(7) 794 Applic.on prov. for bad debts 15,000
-------- ------ ----------------------------------------------- ------------------- ---------------
(8) 460 Advances on salaries 1,000
(8) 572 Banks 1,000
-------- ------ December 31 ------------------- ---------------
(9) 650 Loses on bad debits 8,500
(9) 435 Customers doubtful debts 8,500
-------- ------ ----------------------------------------------- ------------------- ---------------
(9) 490 Provision on bad debts 8,500
(9) 794 Applic.on prov. for bad debts 8,500
-------- ------ ----------------------------------------------- ------------------- ---------------
(9) 572 Banks 1,500
(9) 435 Customers doubtful debts 1,500
-------- ------ ----------------------------------------------- ------------------- ---------------
(9) 490 Provision on bad debts 1,500
(9) 794 Applic.on prov. for bad debts 1,500
-------- ------ Adjustments ------------------- ---------------
(a) 640 Wages and Salaries 12,000
(a) 465 Salaries pending payment 12,000
-------- ------ ----------------------------------------------- ------------------- ---------------
(b) 682 Depreciation of tangible fixed asset 2,500 (5% of buildings;2821 Acc)
(b) 221 Buildings 2,500
-------- ------ ----------------------------------------------- ------------------- ---------------
(b) 682 Depreciation of tangible fixed asset 1,500 (10% ;2826 Acc)
(b) 226 Furnishings 1,500
-------- ------ ----------------------------------------------- ------------------- ---------------
© 610 Diff. between Op.&clos. Invent 0
© 300 Commercial goods 0
-------- ------ ----------------------------------------------- ------------------- ---------------
(d) 129 Profit and loss 4,000
(d) 682 Depreciation of fixed tangible assets 4,000
-------- ------ ----------------------------------------------- ------------------- ---------------
(d) 129 Profit and Loss 5,000
(d) 627 Advertising, publicity and public relations 5,000
-------- ------ ----------------------------------------------- ------------------- ---------------
(d) 129 Profit and Loss 65,000
(d) 694 Allocation to provisioin for bad debts 65,000
-------- ------ ----------------------------------------------- ------------------- ---------------
(d) 129 Profit and Loss 120,000
(d) 600 Purchase of commercial goods 120,000
-------- ------ ----------------------------------------------- ------------------- ---------------
(d) 129 Profit and Loss 10,000
(d) 642 Emloyers' social security 10,000
-------- ------ ----------------------------------------------- ------------------- ---------------
(d) 129 Profit and Loss 10,000
(d) 625 Insurance premiums 10,000
-------- ------ ----------------------------------------------- ------------------- ---------------
(d) 129 Profit and Loss 23,500
(d) 650 Losses from bad debts 23,500
-------- ------ ----------------------------------------------- ------------------- ---------------
(d) 129 Profit and Loss 0
(d) 610 Differences between opening and closing inv 0
-------- ------ ----------------------------------------------- ------------------- ---------------
(d) 129 Profit and Loss 47,000
(d) 640 Wages and salaries 47,000
-------- ------ ----------------------------------------------- ------------------- ---------------
(d) 700 Sales of commercial goods 259,750
(d) 129 Profit and Loss 259,750
-------- ------ ----------------------------------------------- ------------------- ---------------
(d) 794 Application of provision for def 40,000
(d) 129 Profit and Loss 40,000

T129 = 4.000 (682) + 5.000 (627) + 65.000 (694) + 120.000 (600) + 10.000 (642) + 10.000 (625) +
+ 23.500 (650) + 47.000 (640) -259.750 (700) -40.000 (794) = -15.250
EXERCISE 6.1
Adjusted trial balance Unadjusted trial balance
Debit Credit Debit Credit
100 Share capital 143,000 143,000
173 Suppliers of long-term fixed assets 74,000 60,000
220 Land and natural assets 20,000 20,000
221 Buildings 47,500 50,000
226 Furnishings 13,500 15,000
300 Inventories 100,000 100,000
435 Customers doubtful debts 20,000 50,000
572 Banks checking acc. 20,500 30,000
490 Provision for bad debts 25,000 50,000
600 Purchases of commercial goods 120,000 120,000 120,000
625 Insurance premiums 10,000 10,000 10,000
640 Wages and salaries 47,000 47,000 35,000
642 Employer's Social Security costs 10,000 10,000 10,000
694 Allocation to provision for bad debts 65,000 65,000 50,000
700 Sales on commercial goods 259,750 259,750 250,000
430 Customers 104,750 90,000
400 Suppliers 77,000 77,000
228 Vehicles 14,000 580,000 580,000
627 Advertising, publicity and public relations 5,000 5,000
328 Office supplies 5,000
460 Advances on salaries 1,000
465 Salaries pending payment 12,000
650 Losses from bad debts 23,500 23,500
610 Differences between op. & clos inventory 0 0
794 Application for provision for defaults 40,000 40,000
682 Depreciation of fixed tangible assets 4,000 4,000
129 Profit and Losses 15,250

930,500 930,500
682 Depreciation of tangible fixed asset
627 Advertising, publicity and public relatio
694 Allocation to provision for bad debts
600 Purchase of commercial goods
642 Empoyers' social security cost
625 Insurance Premiums
650 Losses from bad debts
610 Difference between opening and colosi
640 Wages and salaries

700 Sales of commercial goods

794 Application of provision for defaults
 4000
5000
65000
120000
10000
10000
23500
0
47000
-15250
259750
40000
EXERCISE 6.1

BALANCE SHEET as of December 31, 1995

(in $)

ASSETS LIABILITIES & EQUITIES

Current Assets 310,000 Short Term Liabilities

Banks 30,000 Suppliers
Inventories 100,000 Wages
Provision for b.d 50,000 Social Security costs
Cash 130,000 Insurance premiums

Non current Assets 85,000 Long Term Liabilities

Suppliers L.T
Land 20,000
Buildings 50,000 Equity
Furnishings 15,000 Share Capital
Customers b.d

Year's Profit

TOTAL ASSETS 395,000 TOTAL LIABILITIES & EQUITY

 132,000
77,000
35,000
10,000
10,000

0
60,000

143,000
143,000

L LIABILITIES & EQUITY 275,000