Professional Documents
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Ch1-5 Questions
Ch1-5 Questions
Ch1-5 Questions
1.2
State which of the following is an asset, liability or a capital?
Premises Inventory of goods
Cash balance Loan to Mr. X
Fixtures and fittings Payable to owner
Loan from bank Plant and equipment
1.3
Complete the following table
Assets Liabilities Capital
(i) 50 000 10 000 ?
(ii) 60 000 ? 45 000
(iii) ? 5 000 50 000
(iv) 40 000 ? 40 000
(v) ? 20 000 20 000
(vi) 60 000 4 000 ?
1.4
Complete the following table
1.5
Show the effects of each transaction given in the following table
Transactions Assets Liabilities Capital
Owner started business with cash
Bought Furniture for cash
A vehicle bought on credit from XYZ Motors
Cash deposited into bank
Sold furniture on credit to P. Jones
Amount borrowed from bank
Cash paid to XYZ Motors in part payment
Furniture sold for cash
Cash received from P. Jones
Owner withdrew cash for his personal use
Chapter 1 2 Book Keeping and Accounting
1.6
Complete the following table to show the effects of the following transactions.
Transactions Assets Liabilities Capital
Owner started business with cash
Cash deposited into bank
Purchased equipment paying by cheque
A loan received from M. Harry
Purchased furniture on credit from G. Prince
Sold equipment for cash
Repaid part of M Harry loan by cheque
Owner brought his personal vehicle for business use
Cash withdrawn from bank for office use
Cash withdrawn from bank for owner’s personal use
1.7
A sole trader has the following items among its assets, liabilities and capital at the end of January 20X7.
$
Cash 22 000
Inventory 28 000
Receivables 21 000
Machines 20 000
Payables 21 000
Bank loan 10 000
Capital 60 000
The following transactions occurred during the following month.
(i) Purchased inventory for cash $2 000.
(ii) Sold a machine for $3 000 on credit.
(iii) Bought two machines on credit for $5 000.
(iv) Repaid part of bank loan $4 000.
(v) Received $2 000 from a receivable.
(vi) Returned a machine with purchase price of $1 000 and amount was adjusted against the amount owed.
(vii) The owner withdrew $1 000 in cash for his personal use.
REQUIRED
Show the effect of above transactions on assets, liabilities and capital in the form of accounting equation.
1.8
The following balances of assets, liabilities and capital are taken from the books of a sole trader at the end of
October 20X9.
$
Cash at bank 18 000
Inventory 31 000
Receivables 19 000
Vehicles 25 000
Payables 13 000
Bank loan 10 000
Capital 70 000
The following transactions occurred during November 20X9.
(i) Owner invested a further sum of $2 000 into the business.
(ii) Sold inventory for cash $3 000.
(iii) Bought a vehicle on credit $4 000.
(iv) Borrowed a further loan of $2 000 from the bank.
(v) Sold a vehicle for $2 000 on credit.
(vi) Paid payables an amount of $3 000.
(vii) The owner brought his personal vehicle costing $4 000 into the business.
Chapter 1 3 Book Keeping and Accounting
REQUIRED
Show the effect of above transactions on assets, liabilities and capital in the form of accounting equation.
1.9
The following transactions relating to a sole trader are summarised below in the form of an equation.
Assets = Liabilities + Capital
Cash + Inventory + Machines + Furniture = Payables + Equity
(i) 20 000 20 000
(ii) 3 000 3 000
(iii) (2 000) 2 000
(iv) 1 500 (1 000) 500
(v) (400) (400)
(vi) 5 000 5 000
(vii) (1 000) (1 000)
18 100 + 2 000 + 5 000 + 2 000 = 7 600 + 19 500
REQUIRED
Write down a separate sentence to explain nature of each transaction.
1.10
The following transactions relating to a sole trader are summarised below in the form of an equation.
Assets = Liabilities + Capital
Cash + Bank + Machines + Vehicles = Bank loan + Payables + Equity
(i) 30 000 30 000
(ii) 2 000 2 000
(iii) 10 000 10 000
(iv) (1 500) 1 500
(v) (3 000) 3 000
(vi) 2 500 2 500
(vii) 1 000 (1 000)
REQUIRED
Write down a separate sentence to explain nature of each transaction.
1.11
A sole trader Mr. Flint has the following items among its assets, liabilities & capital at 31 December 20X4.
$
Cash 22 000
Inventory 28 000
Receivables 11 000
Machines 25 000
Vehicles 15 000
Payables 21 000
Bank loan 10 000
Capital 70 000
REQUIRED
Prepare a balance sheet as at 31 December 20X4 to show the above assets, liabilities and capital.
1.12
A sole trader Mr. Barry has the following items among its assets, liabilities & capital at 31 December 20X4.
Chapter 1 4 Book Keeping and Accounting
$
Capital 100 000
Premises 50 000
Equipment 17 000
Cash at bank 12 000
Cash in hand 8 000
Loan from Mr. X 10 000
Inventory 18 000
Receivables 14 500
Payables 9 500
REQUIRED
Prepare a balance sheet as at 31 December 20X4 to show the above assets, liabilities and capital.
Chapter 2 5 Accounting for Assets, Liabilities and Capital
2.2
Complete the following table to show the effects of the following transactions.
Account to be Account to be
Transactions
debited credited
Owner started business with cash
Purchased equipment paying by cheque
A loan of $2 000 received from G. Berry
Purchased furniture on credit from G. Prince
Sold equipment for cash
Repaid part of G. Berry loan by cheque
Owner brought his personal vehicle for business use
Cash deposited into bank
Cash withdrawn from bank for office use
Cash withdrawn from bank for owner’s personal use
2.3
20X8
Mar. 01 Started business with cash $30 000, bank $20 000
Mar. 02 Purchased Machinery for cash $8 000
Mar. 02 Purchased vehicles costing $10 000 on credit from ABC motors.
Mar. 03 Furniture costing $5 000 purchased for business and paid from owner’s personal bank account.
Mar. 03 Borrowed a loan from bank of $10 000
Mar. 05 Sold furniture and payment received by cheque $3 000
Mar. 05 Cash withdrawn from the bank for owner’s personal use $700
Mar. 06 Sold a vehicle on credit for $3 500 to Mr. C and received $1 500 cash on spot.
Mar. 07 Cash withdrawn from the bank for office use $600
REQUIRED
(a) Enter the above transactions in the accounts for assets, liabilities and capital for the week ending 7 March
20X8. Also balance off each account at the end of week.
(b) Extract a trial balance as at 7 March 20X8 with the help of balances calculated in accounts
prepared in “a” above.
Chapter 2 6 Accounting for Assets, Liabilities and Capital
2. 4
The following transactions are related to the books of G. Bernard for the 1st week of August 20X4.
20×4
Aug. 01 Owner started business with cash $12 000, building $10 000 and Bank $8 000
Aug. 01 Bought Machinery on credit from XY & Co. $10 000
Aug. 02 Borrowed $12 000 from bank.
Aug. 03 Repaid part of the loan taken from bank $5 000 by cheque.
Aug. 04 Owner paid part of bank loan of $2 000 from his personal bank account
4
Aug. 04 Purchased two vehicles for $10 000, /5 was settled by cheque and remainder paid in cash.
Aug. 05 Cash amounting to $2 000 deposited into bank
Aug. 05 Sold one vehicle for $5 000 on cash
Aug. 07 Cash withdrawn by the owner for his personal use $800
REQUIRED
(a) Write up the accounts for assets, liabilities and capital for the week ending 7 August 20X4.
(b) Prepare a trial balance as at 7 August 20X4 with the help of balances calculated in “a” above.
2.5
Following is a list of transactions given for P. Russell for the 1st week of his business operations.
20X3
Jan. 01 Owner started business with cash $30 000 out of which $12 000 was deposited into the bank
Jan. 02 Purchased vehicles for cash $6 000
1
Jan. 03 Purchased Furniture costing $18 000 from XYZ & Co., /3 was paid by cheque as down payment.
Jan. 03 Borrowed an amount of $20 000 in cash from Mr. X to be paid after two years
Jan. 05 Sold a vehicle on credit to J. Marsh $2 000
Jan. 05 A table purchased for business purposes for $500 taken away by the owner for his private use.
Jan. 06 Paid $4 000 to XYZ & Co. by cheque
Jan. 07 Cash received from J. Marsh $500
Jan. 07 Russell paid XYZ & Co. $1 000 from his personal bank account
REQUIRED
(a) Open accounts for assets, liabilities and capital to record the above transactions.
(b) Extract a trial balance as on 7 January 20X3 with the help of balances calculated in “a” above.
2.6
The following transactions are related to a sole trader for the 1st week of his business.
20X5
Sep. 01 Owner started business with bank $15 000, cash $10 000.
Sep. 02 Purchased equipment for $5 000 and paid by cheque
Sep. 03 Purchased Building for $20 000 from ABC & Co. one fourth was paid immediately by cheque.
Sep. 04 Cash withdrawn from the bank for office use $2 000
Sep. 05 Purchased a vehicle costing $2 000 and paid by the owner from his personal resources.
Sep. 06 Lent $2 000 cash to Mr. C
Sep. 06 Sold some equipment for cash $500
Sep. 06 Owner withdrew cash for his personal use $400
Sep. 07 Received a cheque of $500 from Mr. C as part payment of the loan
REQUIRED
(a) Write up accounts for assets, liabilities and capital to record the above transactions.
(b) Extract a trial balance as on 7 September 20X5 with the help of balances calculated in “a” above.
Chapter 3 7 Accounting for Inventories
3.2
Show the effects of each transaction given below
Transactions A/c to be debited A/c to be credited
Cash purchases
Bought goods on credit from L Hanson
Purchased goods for cash from M McGraw
Bought machinery on credit from R Ponting
Sold goods on credit to L Marshall
Goods sold to K. Anderson and amount was collected by cheque
Goods sold to P. Thorpe for cash
Retuned goods to L Hanson
Goods returned by L Marshall back to us
Returned machinery to R Ponting
3.3
The following transactions are related to a sole trader Allan Neil for the first month of his business.
20X4 Transactions
Oct. 01 Started business with cash $5 000, bank $16 000
02 Bought goods paying by cheque $1 800
04 Bought goods on credit from W. Hinds $2 700
05 Bought Machinery on credit from G. Hopper $2 500, Cash sales $1 500
09 Retuned goods to W. Hinds $200, sold goods on credit to J. Brown $3 600
14 Bought goods on credit from R. Peter $1 300
18 J. Brown returned goods back to us $700
22 Cheque received from J Brown $600
23 Cash paid to R. Peter in full settlement of his account
28 Bought goods from W. Hinds $3 400 out of which $1 400 has been paid in cash
29 Goods sold to J. Brown for $3 400
31 Cheque given to W. Hinds $800.
REQUIRED
(a) Enter each of the above transaction in the ledger accounts.
(b) Prepare a trial balance as at 31 October 20X4.
3.4
The following transactions are related to M. Michael relating to the first week of January 20X8
20X8
Jan 01 Owner started business with cash $7 000, Bank $8 000
Chapter 3 8 Accounting for Inventories
3.10
H Barnard is a trader dealing in general items. The following balances were extracted from his books on 31 March
20X3.
$
Sales 90 800
Inventory at 1 April 20X2 12 000
Purchases 71 100
Return inwards 1 800
Return outwards 1 200
Inventory at 31 March 20X3 10 900
REQUIRED
Calculate Gross profit of H Barnard for the year ended 31 March 20X3.
4.5
On 31 December 20X9 the following information was available from the books of M. Martin, a sole trader after
calculation of his gross profit.
$
Gross profit 50 400
Rent receivable 3 100
Insurance 3 100
Wages 15 300
Heating costs 3 600
Interest expense 1 100
Sundry expenses 2 400
Commission (Cr.) 500
REQUIRED
Calculate Profit for the year of M. Martin for the year ended 31 December 20X9.
4.6
The following information was available from the books of L. Bravery, a sole trader on 31 October 20X2 after
calculation of his gross profit.
$
Gross profit 61 700
Wages and salaries 14 600
Rent and insurance 3 400
Heating and lighting 2 100
Sundry expenses 2 300
Repairs cost 1 900
Interest (Cr.) 1 400
Commission income 1 200
REQUIRED
Calculate Profit for the year of L. Bravery for the year ended 31 October 20X2.