Further checks revealed the following during 2018: During the financial year a trade debt of $10,200 owed by Linda Grayson was off set against the S20,000 owing to the same Linda Grayson a trade creditor. • In addition to the goods returned above, Jane Hutton, a cash sales customer returned goods during the financial year amounting to $7,000. Jane Hutton was repaid her $7,000 from the daily cash sales. This was not yet reflected in the business reconds • Patsy Knight grants a credit period of 30 days to customers. The closing trade receivables' balance includes a debt of $8.000 from Favela Brown. The goods were sold to Favela in November 2017. Favela went to the United States of America for a two (2) weeks' vacation in February 2018. On December 31, 2018 Favela was still in the USA • Patsy Knight keeps a cash float of S10,000 for change in his retail outlet. Excess cash is deposited in the bank account and cash shortfall is taken from the bank. • The accounting foe for preparing the 2018 financial statements is estimated at $45,000. The following additional information is aso available: 1 January 2018 31 December 2018 8.300 A19,800 R19400 40.400 Inventories Machinery Rent paid in advanced Rent out standing Trade reccivables Trade payables Loan from bank at 10% Loan interest owing 000 1,050 18,100 15.700 17.000 19.200 14,800 17.000 7.50 Required: a) Prepare a statement of affair to show Patsy Knight's capital on I January 2018. b) Prepare the Trade receivables Control Account c) Prepare the Trade payables Control Account d) Extract a trial balance as at December 31, 2018. e) Prepare the Income Statement for the year coded 31 December, 2018 ) Statement of changes in owner's equity for the year cnded 31 December, 2018, R) Prepare a COMPARATIVE Statement of Financial Position as at 31 December, 2018. h) Prepare a Statement of Cash Flow for the year ended 31 December, 2018

Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter7: Internal Control And Cash
Section: Chapter Questions
Problem 21E
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please solve a,b,c and d.

Further checks revealed the following during 2018:
During the financial year a trade debt of $10,200 owed by Linda Grayson was off set
against the S20,000 owing to the same Linda Grayson a trade creditor.
• In addition to the goods returned above, Jane Hutton, a cash sales customer returned
goods during the financial year amounting to $7,000. Jane Hutton was repaid her
$7,000 from the daily cash sales. This was not yet reflected in the business reconds
• Patsy Knight grants a credit period of 30 days to customers. The closing trade
receivables' balance includes a debt of $8.000 from Favela Brown. The goods were
sold to Favela in November 2017. Favela went to the United States of America for a
two (2) weeks' vacation in February 2018. On December 31, 2018 Favela was still in
the USA.
• Patsy Knight keeps a cash float of S10,00 for change in his retail outlet. Excess cash
is deposited in the bank account and cash shortfall is taken from the bank.
• The accounting fee for preparing the 2018 financial statements is estimated at
$45,000.
The fallowing additional information is ako available:
1 January 31 December
2018
S
9.400
40.400
2018
8.300
19,800
Inventories
Machinery
Rent paid in advanced
Rent outstanding
Trade reccivables
Trade payables
Loan from bank at 10%
Loan interest owing
1,050
18,100
19.200
14.800
15.700
17.000
17,00
Required:
a) Prepare a statement of affair to show Patsy Knight"s capital on 1 Jauary 2018.
b) Prepare the Trade receivables Control Account
c) Prepare the Trade payables Control Account
d) Extract a trial balance as at December 31, 2018.
e) Prepare the Income Statement for the year coded 3I December, 2018
) Statement of changes in owner's equity for the year cndod 31 December. 2018,
g) Prepare a COMPARATIVE Suatement of Financial Position as at 31 December. 2018.
h) Prepare a Statement of Cash Flow for the ycar ended 31 December. 2018
Transcribed Image Text:Further checks revealed the following during 2018: During the financial year a trade debt of $10,200 owed by Linda Grayson was off set against the S20,000 owing to the same Linda Grayson a trade creditor. • In addition to the goods returned above, Jane Hutton, a cash sales customer returned goods during the financial year amounting to $7,000. Jane Hutton was repaid her $7,000 from the daily cash sales. This was not yet reflected in the business reconds • Patsy Knight grants a credit period of 30 days to customers. The closing trade receivables' balance includes a debt of $8.000 from Favela Brown. The goods were sold to Favela in November 2017. Favela went to the United States of America for a two (2) weeks' vacation in February 2018. On December 31, 2018 Favela was still in the USA. • Patsy Knight keeps a cash float of S10,00 for change in his retail outlet. Excess cash is deposited in the bank account and cash shortfall is taken from the bank. • The accounting fee for preparing the 2018 financial statements is estimated at $45,000. The fallowing additional information is ako available: 1 January 31 December 2018 S 9.400 40.400 2018 8.300 19,800 Inventories Machinery Rent paid in advanced Rent outstanding Trade reccivables Trade payables Loan from bank at 10% Loan interest owing 1,050 18,100 19.200 14.800 15.700 17.000 17,00 Required: a) Prepare a statement of affair to show Patsy Knight"s capital on 1 Jauary 2018. b) Prepare the Trade receivables Control Account c) Prepare the Trade payables Control Account d) Extract a trial balance as at December 31, 2018. e) Prepare the Income Statement for the year coded 3I December, 2018 ) Statement of changes in owner's equity for the year cndod 31 December. 2018, g) Prepare a COMPARATIVE Suatement of Financial Position as at 31 December. 2018. h) Prepare a Statement of Cash Flow for the ycar ended 31 December. 2018
The following are summaries of the cash book and bank accounts of Patsy Knight, a sole
proprietor, who does not keep her books using the double entry system.
Bank Summary
Balance on I January 2018
Receipts:
Receivables
Cash bank
60.000
350,000
22,200
372.200
432,200
Payments:
Trade payables
Rent
310,000
10,100
30,400
90,200
8,050
800
Machinery
Wages
Insurance
Customers (dishonoured cheque)
Loan interest
Balance on December 2018
(450,500)|
(18.300)
950
Cash Summary
Balance on 1 January 2018
Receipts
10,000
Cash sales
Receivables
90,700
10,100
100,800
110,800
Payments:
Drawings
Repairs
Electricity
Cash banked
Balance on December 2018
60,600
10,400
5,070
22,200
(98.270)
12.530
The following referred to 2018
Bad debts written off
2,040
Goods withdrawn by Patsy Knight for own use
Credit note issued by Patsy Knight
Discounts allowed by trade suppliers
Discounts allowed to trade customers
Goods returned to trade suppliers
10,200
6,040
4,040
8,000
6,900
Transcribed Image Text:The following are summaries of the cash book and bank accounts of Patsy Knight, a sole proprietor, who does not keep her books using the double entry system. Bank Summary Balance on I January 2018 Receipts: Receivables Cash bank 60.000 350,000 22,200 372.200 432,200 Payments: Trade payables Rent 310,000 10,100 30,400 90,200 8,050 800 Machinery Wages Insurance Customers (dishonoured cheque) Loan interest Balance on December 2018 (450,500)| (18.300) 950 Cash Summary Balance on 1 January 2018 Receipts 10,000 Cash sales Receivables 90,700 10,100 100,800 110,800 Payments: Drawings Repairs Electricity Cash banked Balance on December 2018 60,600 10,400 5,070 22,200 (98.270) 12.530 The following referred to 2018 Bad debts written off 2,040 Goods withdrawn by Patsy Knight for own use Credit note issued by Patsy Knight Discounts allowed by trade suppliers Discounts allowed to trade customers Goods returned to trade suppliers 10,200 6,040 4,040 8,000 6,900
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