Analyse the following transactions as per the accounting equation and calculate the equity for the business as at 31st May 2020. Waverly Wave started her business as a sole trader on 1st May 2020. At this point she had R50 000 in the bank, which consists of R 20 000 of personal funds and R30 000 from the bank on the form of a loan. The following transactions occured during the month of May. Date Transaction 3 Purchased trading inventory by EFT, R12 000 5 Withdrew cash amounting to R 1000, for petty cash Purchased computer on credit, R 15 000. Waverly Wave took a couch from trading inventory for personal use This couch was originally purchased for R10 000. Paid for repairs and maintenance by EFT, R 2500 Paid off R 5 000 on the bank loan. Assets(R)= Owners Equity(R) + Liabilities (R) 15 18 21 30 Date

Analyse the following transactions as per the accounting equation and calculate the equity for the business as at 31st May 2020. Waverly Wave started her business as a sole trader on 1st May 2020. At this point she had R50 000 in the bank, which consists of R 20 000 of personal funds and R30 000 from the bank on the form of a loan. The following transactions occured during the month of May. Date Transaction 3 Purchased trading inventory by EFT, R12 000 5 Withdrew cash amounting to R 1000, for petty cash Purchased computer on credit, R 15 000. Waverly Wave took a couch from trading inventory for personal use This couch was originally purchased for R10 000. Paid for repairs and maintenance by EFT, R 2500 Paid off R 5 000 on the bank loan. Assets(R)= Owners Equity(R) + Liabilities (R) 15 18 21 30 Date

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Description: Analyse the following transactions as per the accounting equation and calculate the equity for the business as at 31st May 2020.Waverly Wave started her business as a sole trader on 1st May 2020. At this point she had R50 000 in the bank, which cons

Financial Accounting

15th Edition

ISBN:9781337272124

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter6: Accounting For Merchandising Businesses

Section: Chapter Questions

Problem 5PA: The following selected accounts and their current balances appear in the ledger of Clairemont Co....

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Selected accounts and related amounts for Clairemont Co. for the fiscal year ended May 31, 2016, are presented in Problem 6-5A. Instructions 1. Prepare a single-step income statement in the format shown in Exhibit 11. 2. Prepare a statement of owners equity. 3. Prepare an account form of balance sheet, assuming that the current portion of the note payable is 50,000. 4. Prepare closing entries as of May 31, 2016.
Selected accounts and related amounts for Kanpur Co. for the fiscal year ended June 30, 2016, are presented in Problem 6-5B. Instructions 1. Prepare a single-step income statement in the format shown in Exhibit 11. 2. Prepare a statement of owners equity. 3. Prepare an account form of balance sheet, assuming that the current portion of the note payable is 7,000. 4. Prepare closing entries as of June 30, 2016.
Lowes Companies Inc., a major competitor of The Home Depot in the home improvement business, operates over 1,700 stores. Lowes recently reported the following balance sheet data (in millions): a. Determine the total stockholders equity at the end of Years 2 and 1. b. Determine the ratio of liabilities to stockholders equity for Year 2 and Year 1. Round to two decimal places. c. What conclusions regarding the risk to the creditors can you draw from (b)? d. Using the balance sheet data for The Home Depot in Exercise 1-26, how does the ratio of liabilities to stockholders equity of Lowes compare to that of The Home Depot?
Real-world annual report The financial statements for Nike, Inc. (NKE), are presented in Appendix E at the end of the text. The following additional information is available (in thousands): Instructions 1. Determine the following measures for the fiscal years ended May 31, 2017, and May 31, 2016. Round ratios and percentages to one decimal place. a. Working capital b. Current ratio c. Quick ratio d. Accounts receivable turnover e. Number of days sales in receivables f. Inventory turnover g. Number of days sales in inventory' h. Ratio of liabilities to stockholders equity i. Asset turnover j. Return on total assets, assuming interest expense is 82 million for the year ending May 31. 2017, and 33 million for the year ending May 31, 2016. k. k. Return on common stockholders equity l. Price-eamings ratio, assuming that the market price was 52.81 per share on May 31, 2017, and 54.35 per share on May 31, 2016. m. m. Percentage relationship of net income to sales 2. What conclusions can be drawn from these analyses?
The transactions completed by PS Music during June 2019 were described at the end of Chapter 1. The following transactions were completed during July, the second month of the businesss operations: July 1.Peyton Smith made an additional investment in PS Music by depositing 5,000 in PS Musics checking account. 1.Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store. Paid rent for July, 1,750. 1.Paid a premium of 2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period. 2.Received 1,000 cash from customers on account. 3.On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of 3,600. Any additional hours beyond 80 will be billed to KXMD at 40 per hour. In accordance with the contract, Peyton received 7,200 from KXMD as an advance payment for the first two months. 3.Paid 250 to creditors on account. 4.Paid an attorney 900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.) 5.Purchased office equipment on account from Office Mart, 7,500. 8.Paid for a newspaper advertisement, 200. 11.Received 1,000 for serving as a disc jockey for a party. 13.Paid 700 to a local audio electronics store for rental of digital recording equipment. 14.Paid wages of 1,200 to receptionist and part-time assistant. Enter the following transactions on Page 2 of the two-column journal: 16.Received 2,000 for serving as a disc jockey for a wedding reception. 18.Purchased supplies on account, 850. July 21. Paid 620 to Upload Music for use of its current music demos in making various music sets. 22.Paid 800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July. 23.Served as disc jockey for a party for 2,500. Received 750, with the remainder due August 4, 2019. 27.Paid electric bill, 915. 28.Paid wages of 1,200 to receptionist and part-time assistant. 29.Paid miscellaneous expenses, 540. 30.Served as a disc jockey for a charity ball for 1,500. Received 500, with the remainder due on August 9, 2019. 31.Received 3,000 for serving as a disc jockey for a party. 31.Paid 1,400 royalties (music expense) to National Music Clearing for use of various artists music during July. 31.Withdrew 1,250 cash from PS Music for personal use. PS Musics chart of accounts and the balance of accounts as of July 1, 2019 (all normal balances), are as follows: Instructions 1. Enter the July 1, 2019, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column and place a check mark () in the Posting Reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.) 2. Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations. 3. Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting. 4. Prepare an unadjusted trial balance as of July 31, 2019.
The transactions completed by PS Music during June 2019 were described at the end of Chapter 1. The following transactions were completed during July, the second month of the business's operations: July 1. Peyton Smith made an additional investment in PS Music by depositing 5,000 in PS Music's checking account. 1. Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music: store. Paid rent for July, 1,750. 1. Paid a premium of 2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period. 2. Received 1,000 cash from customers on account. 3. On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for SO hours per month for a monthly fee of 3,600. Any additional hours beyond SO will be billed to KXMD at 40 per hour. In accordance with the contract, Peyton received 7,200 from KXMD as an advance payment for the first two months. 3. Paid 250 to creditors on account. 4. Paid an attorney 900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.) 5. Purchased office equipment on account from Office Mart, 7,500. 8. Paid for a newspaper advertisement, 200. 11. Received 1,000 for serving as a disc jockey for a party. 13. Paid 700 to a local audio electronics store for rental of digital recording equipment. 11. Paid wages of 1,200 to receptionist and part-time assistant. Enter the following transactions on Page 2 of the two-column journal: 16. Received 2,000 for serving as a disc jockey for a wedding reception. 18. Purchased supplies on account, 850. July 21. Paid 620 to Upload Music for use of its current music demos in making various music sets. 22. Paid 800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July. 23. Served as disc jockey for a party for 2,500. Received 750, with the remainder due August 4, 2019. 27. Paid electric bill, 915. 28. Paid wages of 1,200 to receptionist and part-time assistant. 29. Paid miscellaneous expenses, 540. 30. Served as a disc jockey for a charity ball for 1,500. Received 500, with the remainder due on August 9, 2019. 31. Received 3,000 for serving as a disc jockey for a party. 31. Paid 1,400 royalties (music expense) to National Music Clearing for use of various artists' music during July. 31. Withdrew l,250 cash from PS Music for personal use. PS Music's chart of accounts and the balance of accounts as of July 1, 2019 (all normal balances), are as follows: 11 Cash 3,920 12 Accounts receivable 1,000 14 Supplies 170 15 Prepaid insurance 17 Office Equipment 21 Accounts payable 250 23 Unearned Revenue 31 Peyton smith, Drawing 4,000 32 Fees Earned 500 41 Wages Expense 6,200 50 Office Rent Expense 400 51 Equipment Rent Expense 800 52 Utilities Expense 675 53 Supplies Expense 300 54 music Expense 1,590 55 Advertising Expense 500 56 Supplies Expense 180 59 Miscellaneous Expense 415 Instructions 1.Enter the July 1, 2019, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column and place a check mark () in the Posting Reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.) 2.Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations. 3.Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting. 4.Prepare an unadjusted trial balance as of July 31, 2019.
based on the following prepare an income statement and statement of changes in equity for ting information the month ended August 31, 2019, and a balance sheet at August 31, 2019. Identify the revenue earned as Fees. Record the expenses in alphabetical order. Date Assets = Liabilities + S/H Equity Description Cash Accounts Receivable Prepaid Expense Unused Supplies Truck Bank Loan Acct. Payable Unearned Revenue Comon Stock Retained Earnings Notes August 1 5000 5000 A 1 7000 7000 B 1 -6000 6000 C 4 -600 600 D 5 5000 5000 E 7 1000 1000 F 9 -200 -200 G 12 100 100 H 15 400 -400 I 16 -200…
The following balances were extracted from the ledger of DUMISANI STORES (with partners S. Dumi and Z. Sani) on 28 February 2020, the end of the accounting period. Capital: Dumi R75 000 Capital: Sani 25 000 Current account: Dumi (1 March 2019) 4 500 Cr Current account: Sani (1 March 2019) 3 700 Dr Drawings: Dumi 25 000 Drawings: Sani 23 000 Note: Dumi decreased his capital by R25 000 and Sani increased her capital by R25 000 on 28 February 2020. The profit for the year is R92 000.The partnership agreement stipulates the following;(a) Salary allowance to Dumi, R30 000 p.a.(b) Salary allowance to Sani, R15 000 p.a.(c) Interest on capital @ 12% p.a.(d) Remaining profit and losses to be shared between Dumi and Sani in the of 3 : 2.Required.Prepare the Appropriation Account in the General Ledger.
Mr. Ahmad Ali, who runs a retail business, Teguh Harian Ltd, had the following balancesextracted from the books of the business on 30 June 2020: Account Name RM RM Account Receivable and Account Payable 165,520 72,440 Carriage inwards 3,520 Inventory as at 1 July 2019 65,980 Carriage outwards 4,360 Discount allowed and discount received 2,680 60 Utilities 25,100 Loan from Miko bank 80,000 Returns inwards and return outwards 3,840 3,580 Bank 10,400 Premises 160,000 Motor Vehicles 56,000 Furniture and fittings 27,600 Cash 2,160 Accumulated depreciation as at 1 July 2019 ∙ Motor vehicles 20,160 ∙ Furniture and fittings 8,280 Salaries and wages 68,600 Bad debts 2,940 Rent received 7,500 Printing and stationery 9,400 Drawings 3,560 Insurance expenses 18,200 Purchases and Sales…
Mr. Ahmad Ali, who runs a retail business, Teguh Harian Ltd, had the following balancesextracted from the books of the business on 30 June 2020: Account Name RM RM Account Receivable and Account Payable 165,520 72,440 Carriage inwards 3,520 Inventory as at 1 July 2019 65,980 Carriage outwards 4,360 Discount allowed and discount received 2,680 60 Utilities 25,100 Loan from Miko bank 80,000 Returns inwards and return outwards 3,840 3,580 Bank 10,400 Premises 160,000 Motor Vehicles 56,000 Furniture and fittings 27,600 Cash 2,160 Accumulated depreciation as at 1 July 2019 ∙ Motor vehicles 20,160 ∙ Furniture and fittings 8,280 Salaries and wages 68,600 Bad debts 2,940 Rent received 7,500 Printing and stationery 9,400 Drawings 3,560 Insurance expenses 18,200 Purchases and Sales…
Use the Information provided below to prepare the statement of comprehensive income for the year ended 28 February 2022. The trial balance attached was extracted from the accounting records of whetstone stores on 28 February 2022 the end of the financial year. Adjustments and additional information: 1. According to stocktaking done on 28 February 2022, the following were on hand 1.1 Trading inventory R240 000 1.2 Stationery R6 000 2 . A debtor who was declared insolvent paid R4 200, which represented 60% of the amount owed, to Whetstone Stores. The amount that was received has been recorded but the rest of his account must now be written off. 3. The provision for bad debts must be adjusted to R20,000 4. Interest is outstanding on the investment, which was made on 01 February 2021. The maturity date is 31 July 2022. 5. The long-term loan from Med Bank was obtained on 01 March 2021. A repayment of R100 000 was made and recorded on 31 August 2021 Provide for the outstanding…
Mr Jamil, a trader, completed a year’s trading on 31 October 2020. The following balances were extracted from the business records: Particulars Debit RM Credit RM Purchases and Sales 52,650 160,720 Sales returns and purchases returns 340 1,213 Land 100,000 Machines 140,000 Office equipment 30,000 Vehicles 75,000 Provision for depreciation at 1 November 2019: Machines Office equipment Vehicles 28,000 16,800 28,000 Office expenses 11,500 Cash in hand 175 Selling expenses 8,820 Drawings 6,000 Wages 48,000 Stock at 1 Nov 2019 2,500 Provision for doubtful debts as at 1 Nov 2019 650 Debtors and creditors 14,500 8,600 Repairs 2,370 Bad debts 240 Jamil – Capital account as at 1 Nov 2019 251,512 Cash at bank 3,400 TOTAL 495,495 495,495 Mr Jamil also provides the following information at…