Question 1: The adjusted trial balance ABC company is as follows

Account (s) Dr (USD) Cr (USD)

Insurance expense 1,804
Electricity expenses 2,500
Motor expenses 2,350
Salaries and wages expense 48,580
Sales 381,430
Purchases 245,950
Sundry expenses 644
Vehicle 19,400
Creditors 24,028
Debtors 44,516
Furniture and fittings 5,700
Buildings 174,000
Cash at bank 10,346
Drawings 43,000
Capital 193,332
598,790 598,79000
Additional information: Ending inventory as at 31 Dec 2019 is $29,304

Required:

a) Prepare the Statement of Profit and Loss for the year ended 31 Dec 2019 of ABC company. Show
all calculations.
b) Prepare the Balance sheet as at 31 Dec 2019 of ABC company. Show all calculations.

Question 2: Record the following transactions of ABC company occur during Nov 2018 by using the
journal entries.

- On Nov 3, 2018, the owners invest $50,000 cash to start the business.
- On Nov 5, 2018, purchases machinery on account for $17,500 and the payment due within 2
weeks.
- On Nov 9, 2018, receives $4,800 cash in advance from a customer for services not yet rendered.
- On Nov 10, 2018, provides $5,500 in services to a customer who asks to be billed for the
services.
- On Nov 12, 2018, pays a $300 telephone bill for previous month with cash.
- On Nov 18, 2018, paid in full, with cash, for the equipment purchase on Nov 5.
- On Nov 22, 2018, bought and paid an insurance contract for 2 year at the price of $3,600. The
insurance policy is covered at the Dec 1, 2018.
- On Nov 29, 2018, the owners withdraw $1,900 for personal use.

Question 3: At the end of the first year of operations 2019, GiKi, owner of Building Designs. The
following data are a summary of selected transactions that occurred during the year. Assume GST is
ignored.

1. Fees of $368,000 were collected for services provided during the year.
2. There were $95,000 in receivables at 30 June 2019 for services performed on credit.
 3. Cash payments of $254,000 were made for salaries, rent, insurance and other expenses incurred
during the year.
4. Salaries owing but not yet paid amount to $44,000
5. On 15 June, 2019, a client paid $6,000 in advance for services to be rendered during the next
financial year.
6. Expenses of $9,000 were paid (not included in the $254,000) at 30 June.

Required: Calculate profit under the accrual basic and cash basic.