Activity 4 The accounting equation#Analyse the following transactions using the basic accountingSmith owns a small business that sells vuvulezas to sports fans.Ma buys them at R10 each and sells them for R25.Purchased 100 vuvuzelas and paid cash for them.Sold 40 at a soccer match at the local stadium.Some tourists bought 10 units from Peter.A Paid R200 for petrol for the business car.Sold 30 units but he only managed to get R20 each.Placed an advertisement in the local paper at a cost of R125., Analyse the following transactions using the basic accountingequation.Nkosi Kwando owns a small spaza store and she marks up all her goodby 50%.a Buys R2 500 of trading stock from Makro and pays with a cheque.b Issues a cheque for R1 200 for a new printer.c Sold some stock for R750 (Cost price- R500).d Received R5 000 from the bank as a loan.e Purchased more stock for cash - R3 500.f Good sales led to receiving R3 000 from cash sales.g Stock with a cost price of R600 were sold.h The tenant paid the rent of R375.

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Answered: He buys them at R10 each and sells them…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter1: Accounting And The Financial Statements

Section: Chapter Questions

Problem 66C

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Question 3 A businessman has bought the following items for his business uses: Machinery RM100,000 Computers RM50,000 Pen RM10 A4 paper rim RM15 Printer cartridge RM20 Required: (i) Apply the materiality concept to explain how should the above items be recorded in books of accounts? (ii) Explain TWO (2) benefits by applying the materiality concept on the accounting treatment as (i).
PROBLEM 3: WORKSHEET On January 1, 20x1, Ms. Yama Ha opened a guitar repair shop called "Guitar Doc." The following were the transactions during the year: 1. Ms. Yama invested P100,000 cash to the business. 2. The business purchased supplies worth P60,000. Guitar Doc uses the expense method. 3. Total service fees billed to clients, on account, amounted to P400,000 4 Total collections on accounts receivable amounted to "270,000. 5. Ms. Yama took P60,000 cash from the business. 6. Total salaries paid amounted to P180,000. StuDocu.com ngs to respective a PIRRUS der buying the orig Chapte 315 Additional information a. Billy Sheehan, one of the debtors, is undergoing financial difficulties. Of the total P50,000 accounts receivable from Billy Sheehan, only P40,000 is sure of collection; P10,000 is doubtful b. Unused supplies at the end of the period amounted to 920.000 c Unpaid employee salaries amounted to P30,000. 327 / 60 Requirements: a. Provide the journal entries. b. Post the entries…
Q No 3: M/s. Khalid Traders started business on March 1, 2006 with a cash investment of Rs.700,000. They completed the following transactions during the month:Mar.2:Paid shop rent in advance for one year Rs.120,000.Mar.4:Purchased furniture for shop on cash Rs.50,000.Mar.5:Opened a bank account with Rs.200,000.Mar.7:Purchased a computer for the business worth Rs.50,000.Mar.10:Purchased merchandise for cash Rs.150,000.Mar.15:Sold merchandise for cash Rs.150,000.Mar.18:Purchased merchandise on credit Rs.50,000.Mar.20:Sold merchandise on credit for Rs.80,000.Mar.23:Proprietor withdrew cash and merchandise for Rs.10,000 and Rs.5,000 respectively.Mar.27:Paid for advertising Rs.25,000.Mar.31:Paid salary to the salesman Rs.15,000 by cheque.REQUIREDi.Identify the each record as a cash, credit or mixed transactionii.Record the above transactions in the General Journal of M/s. Khalid Traders
II. Computational. Look for the balances of the different accounts using the following transactions: A) Invested P50,000 in the business. B) Bought supplies on account amounting to P9,850. C) Received 7,500 cash from clients on account. D) Billed a client for the service rendered P6,000. E) Hired an assistant at a salary of P7,000 per month. Look for the ending of cash. Look for the ending balanceofcash.
Q1: Ahmad started his own Computer service on January 1, 2020. The following transactions occurred during the month of January. January 01 Ahmad invested $ 200000 cash in the business 03 Paid $ 10000 for office rent for the month 05 Service provided on account $ 15000 12 Purchased supplies for $ 3000 on account 15 Received a cash payment of $ 5000 for services provided on January 05 17 Purchased gasoline for $ 2000 on account 23 Received Bank Loan of $ 40000 on the note payable Instructions Show the effects of these transactions on the accounting equation Prepare a balance sheet at January 31, 2020 Date Assets Liabilities Owner’s Equity Cash Accounts Receivable Supplies Note Payable Account Payable James Capital…
Question No 1Abbas and Rahim want to start a Furniture shop at Saham. How can you help them by explainingdifferent forms of business and its benefits and limitations? Question No 2 Assume that you are going to start a Business after graduation. Describe 10 transactions that thebusiness might undertake by using your own idea with the following assumptions:• Started business with cash• Goods purchase for cash• Goods purchased on credit• Any asset purchased and paid cash• Any asset purchase on credit• Sold goods for cash• Sold goods on credit• Paid any bill• Paid salary to staff• Cash withdraw from business for personal useBased on your own 10 transactions, prepare:1. Accounting Equation2. Journal3. Ledger4. Trail Balance5. Financial statement
Problem 3. Raymond opened the Muscles Fitness Gym in August. The Following transactionsoccurred during the first month of the business:a) Raymond invested P100,000 in cash and 30,000 in gym equipment in the business.b) Paid P10,000 for the first month’s rent.c) Purchased supplies costing P4,000 on credit.d) Purchased exercise equipment costing P25,000 for 15,000 cash and the rest on account.e) Recorded income for the first half of the month of P6,500 in cash and P3,500 on account.f) Paid P2,750 to a creditor on account.g) Received payment from a customer on account for P1600.h) Raymond withdrew P500 for a graduation gift.i) Paid aerobics instructor her salary, P3,000.j) Paid miscellaneous expense P1,500k) Recorded income for the second half of the month of P5,600 in cash.Prepare a new accounting equation every time a transaction occurs.
QUESTION 2 The following are the transactions of Hus Cycle Enterprise in May: 1 Started a business with Cash in hand RM1,200 and Cash at bank RM1,100. 2 Purchased goods by cash RM200. 4 Bought goods on credit from Raise Enterprise RM500. 5 Paid rent by cheque RM720. 7 Paid advertising by cash RM330 8 Sold goods to Emas Enterprise on credit RM300. 9 Cash sales RM800. 10 Paid transport by cash RM12. 13 Credit sales to Emas Enterprise RM600. 14 Paid for stationery in cash RM16. 15 Contributed further capital RM3,000 by cheque. 16 Emas Enterprise paid for the amount owed by cheque, provide 2% discount to Emas. 20 Drawing by cheque for personal use RM150. 24 Bought goods on credit from Ally amount RM400. 25 Sold goods on credit to Lisa RM450. 26 Paid Ally by cheque in full settlement of the amount owing, received 5% discount. 28 Paid electricity by cash RM120. 30 Transferred cash from office to bank RM500. 30 Credit purchase from Nissa Co RM300. 31 Refunded cash to…
The transactions completed by PS Music during June 2016 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 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 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: July 16. Received 2,000 for serving as a disc jockey for a wedding reception. 18. Purchased supplies on account, 850. 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, 2016. 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, 2016. 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, 2016 (all normal balances), are as follows: Instructions 1. Enter the July 1, 2016, 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, 2016.
Case 3-72 Cash- or Accrual-Basis Accounting Karen Ragsdale owns a business that rents parking spots to students at the local university. Karens typical rental contract requires the student to pay the years rent of $450 ($50 per month) on September 1. When Karen prepares financial statements at the end of December, her accountant requires that Karen spread the $450 over the 9 months that each parking Spot is rented. Therefore, Karen can recognize only $200 of revenue (4 months) from each parking spot rental contract in the year the cash is collected and must defer (delay) recognition of the remaining $250 (5 months) to the next year. Karen argues that getting students to agree to rent the parking Spot is the most difficult part of the activity so she Ought to be able to recognize all $450 as revenue when the cash is received from a student. Required: Why do generally accepted accounting principles require the use of accrual accounting rather than cash-basis accounting for transactions like the one described here?
Continuing Problem 4.Total of Debit column: 40,750 The transactions completed by PS Music during June 20Y5 were described .it the end of Chapter 1. The following transactions were completed during July, the second month of businesss operations: July 1. Peyton Smith made an additional investment k PS Music in exchange for common stock by depositing 5,000 in PS Mu wet 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 musk 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 on account 3. On behalf of PS Musk, Peyton signed a contract with a local radio station. KXMD, to provide guest spots for the next three months. The contract requires PS Musk 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 2SO 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 Pane 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 21.Paid 620 to Upload Musk for use of its current musk demos in making various musk 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 4.20YS. 27.Paid electric Ml 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 S00 with the remainder due on August 9. 20Y5. 31.Received 3,000 for serving as a disc jockey for a party. 31.Paid 1.400 royalties (musk expense) to National Musk Clearing for use of various artists music during July. 31. Paid dividends, 1,250. PS Musics chart of accounts and the balance of accounts as of July 1, 20Y5 (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 Common Stock 4.000 33 Dividends 500 41 Fees Earned 6,200 50 Wages Expense 400 51 Office Rent Expense 800 52 Equipment Rent Expense 67S 53 Utilities 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, 20Y5, 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, 20Y5.
Part A Anne York is a sole trader who started the business of buying and selling furniture in Brightonon the 1st of October 2021.She is going to prepare accounts to 31st of September 2021. She contributed to the businesswith £10,000 in the Bank, £4,800 cash, 45,000 flat and 12,000 Car. The transactions duringthe month are as follows:2/10 Purchased furniture £5400 for sale on credit from Home Ltd4/10 She bought a computer for £800 and a printer £200 from a local shop in London andpaid by cheque.5/10 Sold goods for £ 2800 and received the money via Bank account12/10 Paid in Cash £110 for repairing printer18/10 Part of furniture returned to Home Ltd £25021/10 The owner received rent £800 for flat and deposited it to the bank account23/10 Sold goods to Rayan £2100; from this amount £1800 cash received immediately andthe rest remains on credit.23/10 Sold goods of £700 to David and received cash24/10 Bought a new Laptop for business use by issuing a cheque £170026/10 Paid the month’s wages…

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