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as on 31-12-2013 Asset Non Current Asset Other items Liability OE 13,000 Cash
Problem 1-2 Description Current Assets Non current Assets Total Assets
Figures in $ Year 1 113624 410976 524600 56142 240518 214155 13785 524600 Year 2 90442 198014 288456 40220 78585 173295 -3644 288456
Current Liabilities Noncurrent Liabilities Paid in Capital Retained earnings Total Liabilities and owner's equity
Problem 1-3 Figures in $ Description Sales Cost of Goods sold Gross Margin Other Expenses Year 1 12011 3011 9000 6201 Year 2 11968 2992 8976 6429
Problem 1-4
Cash 1 2 3 4 5 6 7 8 9 10 11 20,000 -5,000 -1,000 -4,500 5,000 -1,500 1,000 -750 -500
Accounts Receivable
Supplies Inventory
12,750
4000
-200 800
(a)
Explanation of each Transaction 1. Invested $20,000 cash 2. Purchased equipment of $7,000 ($5,000 cash & $2000 as credit) 3. Invested $1000 cash in inventory 4. $4,500 gives as salary from cash 5. Revenue 10,000 (5000 in cash & 5,000 on credit) 6. Paid $1,500 for Account payable(Creditors) 7. $1,000 received from accounts receivable(Debtors) 8. Paid rent $750 in cash 9 Paid $500 for utilities 10.Took credit $200 for travel Expenses 11 Reduces $200 from inventory for personal use
(b)
List the changes in the company's balance sheet during the month of July. Assets Current Asset OE(Cash) Inventory Account Receivable Liability Current Liability 12,750 Account Payable 800 4,000
c)
Prepare an income statement for the month (ignore the taxes) Sales Revenue 10,000
5,950 4,050
(d)
Explain the changes in the Cash account Cash 20,000 Investment in business with 20,000 cash 5000 Purchase Equipments of 7,000 where 5000 piad cash(20,000-5000=15,000) 1000 Invests 1000 in Inventory (15,000-1000=14000) 4,500 Gives Salary then Balance (14,000-4,500=9,500) 5,000 Sales for 10,000 in which cash sales 5,000 Bal.(9,500+5,000=14,500) 1,500 Accounts Payable is 1,500 Bal.(14,500-1,500=13,000) 1,000 Accounts receivable 1000 Bal.(13,000+1,000=14,000) 750 Pays Rent 750 Bal.(14,000-750=13,250) 500 Paid fro Uitlities 500 Bal. (13,250-500=12,750) 12,750
Closing Cash
e)
Explain why the change in Cash Account and Month's income are not same.
It is only the coincidence that Cash Account and Month's income may be the same else these two are differ
1 2 3 4 5 6 7 8 9
8,000
b)
c)
Prepare an income statement for the month Income Income from Commision Total Income Expenditure Rent Advertisement Salary Misc. Expence Total Expenditures Earnings
10,000 10,000
d)
Explain the changes in the Cash account 25,000 Starts with cash investment -500 Paid Rent Bal.(25,000-500=24,500)
Paid for Office Supply Bal.(24,500-500=24,000) Paid for Advertisement Bal.(24,000-750=23,250) Paid fro Salary Bal.(23,250-3,000=20,250) Received from Revenues Bal.(20,250+2000=22,250) Paid to Debtors Bal.(22,250-5,000=17,250)
Explain why the change in the Cash account and the month's income are not the same
It is only the coincidence that Cash Account and Month's income may be the same else these two are differ
40,000
160,000
Equipments 7,000
Description of Transaction Investment CAPITAL EXP revenue exp Salaries Revenues Debtors payment Creditors receipt Rent Utilities Travel Personal use
700
23850 24,550
ad cash(20,000-5000=15,000)
(9,500+5,000=14,500)
Supplies Inventory
Equipment
Accounts Payable
Owners Equity
25,000 -500 8,000 500 8,000 -500 -750 -3,000 10,000 -5,000 1,000 -1000
25,000 4,750
4,000
33,750
40%
Description of transaction
Cash Investment Rent Equipment Office Supply Advertisement Salary Revenue Debtors Miscllaneous Exp.