ACCT1501 TUT 4

Topic 4 Record Keeping

Tutorial Questions
DQ 4.9 Financial Accounting allows an accurate analysis to the companys
performance over a period of time or its immediate financial position. The person
who would be shipping and receiving would be directly involved in many of the
sales including both cash and credit sales. A lack of record-keeping will prevent
whether the calls to create business are effective in achieving a profit.
Additionally the company is failing to account for all costs and profits by only
accounting for sales and wages. Other expenses should include operating
expenses such as electricity, rent etc. Therefore, without accrual accounting,
profits may be overestimated and liabilities could be underestimated.
DQ 4.14 Human capital cannot be recorded as an asset because the entity does
not exert control over human resources. Furthermore, it is extremely difficult to
create criteria to assess the monetary value of each staff member and these
figures would differ between all staff. If this was included, various factors such as
the value of future economic benefits generated by a member and their past
experiences, skills, knowledge and level of training.
P 4.18

1
2*

3
4
5
6
7
8

General Journal
Dr
8250

Dr Inventory (+A)
Cr Accounts payable (+L)
Dr Accounts Receivable (+A)
Cr Sales (-A)
Dr COGS (+A)
Cr Inventory (-A)
Dr Cash (+A)
Cr Accounts receivable (-A)
Dr Accounts payable (-L)
Cr Cash (-A)
Dr Expenses (-SE)
Cr Cash (-A)
Dr Salaries expense (-SE)
Cr Cash (-A)
Dr Depreciation expense (-SE)
Cr Accumulated Depreciation (-A)
Dr Loan (-L)
Cr Cash (-A)

Cr
8250

11000
11000
7700
7700
19000
19000
11000
11000
1500
1500
2600
2600
200
200
800
800

ACCT1501 TUT 4

1 Feb

Opening Balance
Accounts
Receivable

21 000
19 000

Cash
Feb

28
Feb

Accounts payable
Expenses

11 000
1 500

Salaries expense
Loan
Closing balance

2 600
800
24 100

40 000

1 Feb
Feb

Opening Balance
Sales

40 000

Accounts Receivable
25 000
Feb
Cash
11 000
28
Closing Balance
Feb
36 000

19 000
17 000
36 000

Equipment
1 Feb

Opening Balance

24 000
28
Feb

1 Feb

Opening Balance
Accounts
payable

36 000
8 250

Closing balance

24 000

Inventory
Feb
COGS
28
Closing Balance
Feb

7 700
36 550

44 250

44 250
COGS

Feb

Inventory

7 700
28
Feb

28
Feb

Feb
28
Feb

Feb
28

Closing balance

7 700

Closing Balance

Accumulated depreciation
1 Feb Opening Balance
Feb
Depreciation
expense
3 200

Cash
Closing Balance

Accounts payable
11 000
1 Feb Opening Balance
10 250
Feb
Inventory

13 000
8 250

21 250

21 250

Cash
Closing balance

800
48 200

Loan
1 Feb

Opening Balance

3 000
200
3 200

49 000

ACCT1501 TUT 4
Feb
49 000

49 000

Depreciation expense
200
28
Closing Balance
Feb

200

2600

Feb

Accumulated
depreciation

Feb

Cash

Salaries expense
2 600
28
Closing Balance
Feb

28
Feb

Closing Balance

11 000

Feb

Cash

1 500

28
Feb

Closing Balance

Retained profits
11 000
1 Feb Opening Balance

11 000

Closing Balance

Share capital
30 000
1 Feb Opening Balance

30 000

28
Feb

Sales
Feb

Accounts
receivable

Expenses
28
Closing Balance
Feb

Trial Balance
Morilla Ltd
Trial Balance at end February 2012
$
$
Cash
24 100
Accounts Receivable
17 000
Equipment
24 000
Inventory
36 550
COGS
7 700
Accumulated
3 200
Depreciation
Accounts payable
10 250
Long-term Loan
48 200
Depreciation expense
200
Salaries expense
2 600

11 000

1 500

ACCT1501 TUT 4
Sales
Expenses
Retained profits
Share Capital

11 000
1 500
113 650

11 000
30 000
113 650

Morilla Ltd
Balance Sheet at 28 February 2012
$

Assets
Current Assets
Cash
Accounts Receivable
Inventory

24 100
17 000
36 550

Non-current Assets
Equipment
Accumulated Depreciation
Total Assets

24 000
(3 200)
20 800
98 450

Liabilities & Shareholders

Equity
Liabilities
Current Liabilities
Accounts payable

10 250

Non-current Liabilities
Long term loan
Shareholders Equity
Share capital
Retained Profits
Total liabilities and
shareholders equity

48 200
58 450
30
10
40
98

000
000
000
450

Morilla Ltd
Income Statement for February 2012

ACCT1501 TUT 4
$
Sales
Cost of goods sold
Gross profit
Operating expenses
Expense
Salaries expense
Depreciation expense
Net Profit/Loss

$
11 000
(7 700)
3 300

(2 600)
(1 500)
(200)

(4 300)
(1 000)

P 4.19

A
B

D
E

G
H
I
J

Cash
Share capital
Inventory
Equipment
Accounts payable
Equipment
Cash
Notes payable
Supplies expense
Accounts payable
Accounts receivable
Sales Revenue
COGS
Supplies
Cash
Accounts receivable
Sales revenue
COGS
Supplies
Cash
Accounts receivable
Accounts payable
Cash
Supplies
Supplies expense
Notes payable
Interest expense
Cash

General Journal
Dr
30000

Cr
30000

5000
5000
5000
3600
1200
2400
700
700
900
900
540
540
1300
1400
2700
1620
1620
650
650
1000
1000
300
300
500
60
560