Financial Statements 841 Mitu Corporation Balance Sheet as on December 31,2014 “Rewount THES Tk Te __| Tora Te x Sh 425 [Accounts Receivable (24,555 - 2,500) 22055 Ending Inventory 1,20,695| prepa Expenses (11,000 - 5,900) 5.100] Total Current Assets 1,70.275 Fixed Assets: ! 95 JLand 42,000) 3 Building 140,000} SI _|Less : Accu. depreciation (70,600 + 1,388) 71,988| 68012] lotfice Equipment 15,100] Less : Accu. depreciation (920 + 5,900) £29) 8,280] Store equipment 40,200] Less: Accu. deprecation (20,860 + 17,041) 2, 17,598] Delivery Equipment 38,080] Less : Accu. depreciation (9,800 + 5,656) 15.456] 22,664 F |patents T5500] [best Amortization of Patents 600] - 17,900 & 1.76415 0] & owner's equity . 080) [Current Liabiles § |Accounts Payabie 50,626) pe [Notes payable 12,000} Interest ~ Payable 120) Wages payable 580] Total current liabilities 64,326| ity/stock holders equity 2,82.364| Total liabilities & owner's equity =2.46.590) me] YY fc Trial Balance of Brennan Fashion Center Contianed the following accounts at November 30, the ‘end of the company’s fiscal year. 2364) J Brennan Fashion Center zo) Fe ‘Trial Balance as on November 30,2014 : ‘Recount Titles Tk Te * fe [Cash : = 7500 FS |Accounis receivable 33,700 [Merchandise inventory 45,000] | Store supplies. 5,500] 50,000 Store equipment 85,000] 323364 [Accumulated depreciation-store Satipment 18,000) Delivery equipment 48,000842 Principles of Accounting (Management) 1 iStore supplies on hand totaled Tk. 3,500. Accumulated depreciation-delivery equipment 6,000; INotes payable. 5 51,000) |Aecounts payable... 48,500 \C. Bremnan, capita... 1,10,006. (C. Bremnan, drawing. s 7,59,200 = 9 Fee een Th, 9,000 on te store equipment and 7,000 onthe delivery equipment: 3 Brrcrest of Tk 11,000 is accrued on notes payable at November 30 4. Merchandise inventory actually on hand is 44,400. Other data: Pe Salaries expense is 70% selling and 30% administrative Feet Scperse and utilities expense are 80% selling and 20% administrative F Tk 30,000 of notes payable are due for payment next year. 4. Repair exper: is 100% administrative. 4. Real expe sea mulple-step income saement and owner's equity statement for He Yi fend and = Classified balance sheet as of November 30, 2014 Bremnan Fashion Center income statement for the year ended 30! November, 2014. feta ‘Secoumnt Titles Te Te] Tor Te sales 7,200) Less: Sales return & Allowances 200 Net sales Less : Costof goods sold (4,97,400 + 600) Gross Margin Less : Operating expenses: Selling expenses: Salaries expenses 98,000 Rent expenses 19,200] Utilities expenses 117200] Delivery expense 167700 [Depreciation expenses store equipment 9,000] Depreciation expenses delivery equip. 7.000] 1,61,100] | Administrative Expense = Salaries expenses 42,000 , Rent expense 4,800] [Utilities expenses 2}300| Repair Expense, 12,109] "Advertisement Expense 26 400 [Supplies Expense (5,500-3,500) 2,000] Income from operation 8,Four-Column Bank Paras Toh Receis 1387 Balances as per pass book 40,000 700.000 Cheques deposited but not crected ‘June 20, 1997 70.000 | (@)(20,000) une 31,1967 {b) 40,000 4ogc0 (Cheques issue: but not presented June 30,1997 (40,000) () (40.000) uly 31,1987 (20.000 180,000 ‘Adjusted balances as per fass book Zp 12000 120,000, 70005 Balances as per cash 20040 12.000 7.19.980 | 2008: Bank sevice charges, une, 1 0) 0a uly, 1 (9.60. ‘Adjusted balances as per cash 200 720,000 720.000, t _Blustration 31 X Company provides the follwing informationy/ Balances as per passbook Rs Bank sence charges une 30,1887 10.209 ~~ June 1997 ‘July 31,1997 12000 Jay 1987 z uy recep as per pass 15000. Balances as per cash book “uly payments as per pass 13203 June 30,1957 1 Che 2s issue but not “hy 31,1997 fh June 3, 1987) $000. Jy recaps as per cash book uly 31, 1997 ‘$000. Wreng debitin June, corecte bythe bank in Juy E claposted but fot cleared June 30, 1897 6.000 ‘aly 31, 1997 3.000 ‘You are required to prepare a four-column Bank Reconciliation Statement for the month of July, 1997 Solution’ _Four-Colum7 Bank Reconciliation Stat: ent for the month of July, 1997 ‘all in rupees) Particulars ‘Reconctation | Juy Recess | July Payments | Reconcilat (08.1997) (1757) ‘Balances as per pass book 10203 E00 - 7328 12060 ‘Cheques depostied but not presented sine 30, 1997 | 6000 (6.000) une 31,1997 3,000 30c0 Les : Cheques issued but not presented Jue 30, 1997 (6,000) (6.000) uly 31,1997 4000 Wrong debit in June, comected in July 500 (00) Adjusted balances as per pass book 71703, 14500. 12203, Balenoes as per cash book Tis 77.500 21 Bank service charges sine, 1987 (10) (19) sy, 1997 i 2 T1708 #1500 faa a * Opening cash book balance + receipts as per cash book — Closing stock book balance = payments as per cash book. Rs (11,713 + 11,500 ~ 11,020) = Rs 12,193. THEORETICAL QUESTION: iS |. What do you mean by Bank Reconciliation Statement? Why is it prepared? 2. What do you mean by Bank Reconciliation? When is Reconciliation neces sary? 3. What are the different causes for discrepancy between the balance as per the Cash Book and the Pass Book?> 600 Principles of Accounting (Management) 5. Salary expense eae Salary payable | (To record salary accrued) | 6. Depreciation expenses ‘Accumulated depreciation Office equipment (To record depreciation on office equipment) 7. Accounts receivable Service revenue (To record service on account) 4,000 4,000 6,000 6,000 | 2,000 2,000 fem) =< Mr, Zaman open 3 on May 31,2006: Prepaid insurance Office equipment Notes payable ‘Unearned revenue Service revenue Analysis revealed the following additional data : ‘a service company on May 1, 2006. The company showed the following balances T™. 36,000 1,00,000 120,000 "42,000 18,000 Prepaid insurance was for two years effect from May 1, 2006, Annual depreciation on office equipment was Tk. 24,000. ‘The notes payable were a 10% 6 month note from May 1, 2006. 7 customers paid Tk. 6,000 each for 6 months service package beginning ftom May 1, 2006 ‘These 7 customers were served in May. (N.U BBB (P) 2007, 2014) Services pro ded to other customers but not billed totalled Tk. 15,000, 7 Office rent of Tk. 5,000 was accrued and unpaid at May 31. Required : Journalise the adjusting entries on May 31, 2006 Adi _.ting Brivies Date ‘Account titles and explanation Ret, Debit | Credit . Harry Tk | Tk 2006 May 31 31 1) Insurance expense Prepaid insurance (To record insurance prepaid (36,000 +24) ii) Depreciation expense ‘Accumulated depreciation To record depreciation expense (24,000+ 12) Til) Interest expense Interest payable (To record interest on notes payable (1,20,000x10%« 7) ‘Wy Unearned revenue Service revenue (To record service revenue (6,000 + 67) v) Accounts receivable Service revenue (To record revenue for services provided.) vi) Rent expense Rent payable (To record rent due.) 1,500 : 1,500 5 2,000 2,000 _ 3 1,000 7,000 7,000 15,000 15,000 5,000 5,000 EEEFinancial Statements 199 09 ia 09 * Net Loss Bremnan Fashion Center Owners Equity Statement For the year ended 30th November. 2014 ‘Account Titles Tk Bremnan, Capital 1,10,000] 3: Net loss, 5.200) Drawings 12,700 Capital at end Bremnan Fashion Center Balance Sheet As at Noventber 30, 2014 ‘Recount Titles Tk Tk nda rent Assets 28,000 is recciveble 33,700) pandise inventory (45,000 - 600) 44,400 supplies (5,500 - 2,000) 3,500] Ec 85,000] 200 Less : Accu. Depreciation store equipment. 27,000 209 $8,000 48,000 tion D. Equipment 13,000 35,000 Total Assets 11,000] 30,000 48,500] 0 Total Liabilities & equity