You have been asked to prepare the final accounts for W Smith, a sole trader, for the yearended 31 December 2013. W Smith has forwarded to you all books of prime entry and ledgers,and in addition, has given you the following information:i)holiday.Mr Smith had taken £2,000 out of the business bank account to take his wife onUp to last year, the machinery and vehicle used in the business had beeni)depreciated using the reducing balance method. W Smith thinks that they should now bedepreciated using the straight-line method.i)in its present form for many years.Mr Smith is confident, given his order book that the business will continue to operateiv)markers which will be used in the business for the next couple of years.Mr Smith had purchased ten staplers, four flip charts and four packets of whiteboardv)which was for the quarter October to December 2013.Mr Smith informs you that he has just found an unopened electricity bill for £900RequiredIn each case, identify and then explain the main accounting concepts being highlighted andindicate how each should be treated in the final accounts.(Ctrl) -

Accounting concepts are based on accounting assumptions and condition which paves the base for…

Answered: In each case, identify and then explain…

In each case, identify and then explain the main accounting concepts being highlighted and indicate how each should be treated in the final accounts. (Ctrl)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Mr.Karue started business on January 01, 2018, with cash of Kshs. 50,000, furniture of Kshs. 10,000, goods of Kshs.2, 000 and machinery worth Kshs.20, 000. During the year he further introduced Kshs. 20,000 in the business by opening a bank account. From the following information extracted from his books, you are required to prepare final accounts for the year ended December 31, 2018.Accounts from Incomplete Records   Amount Kshs.Receipt from debtors. 57,500Cash sales 45,000Cash purchases 25,000Wages paid 5,000Salaries to staff…
Mr.Karue started business on January 01, 2018, with cash of Kshs. 50,000, furniture of Kshs. 10,000, goods of Kshs.2, 000 and machinery worth Kshs.20, 000. During the year he further introduced Kshs. 20,000 in the business by opening a bank account. From the following information extracted from his books, you are required to prepare final accounts for the year ended December 31, 2018. Accounts from Incomplete Records                                                                                                   Amount Kshs. Receipt from debtors.                                                                       57,500 Cash sales                                                                                         45,000 Cash purchases                                                                                 25,000 Wages paid                                                                                        5,000 Salaries to staff…
Mr.Karue started business on January 01, 2018, with cash of Kshs. 50,000, furniture of Kshs. 10,000, goods of Kshs.2, 000 and machinery worth Kshs.20, 000. During the year he further introduced Kshs. 20,000 in the business by opening a bank account. From the following information extracted from his books, you are required to prepare final accounts for the year ended December 31, 2018.Accounts from Incomplete Records   Amount Kshs.Receipt from debtors. 57,500Cash sales 45,000Cash purchases 25,000Wages paid 5,000Salaries to staff…
Mr.Karue started business on January 01, 2018, with cash of Kshs. 50,000, furniture of Kshs. 10,000, goods of Kshs.2, 000 and machinery worth Kshs.20, 000. During the year he further introduced Kshs. 20,000 in the business by opening a bank account. From the following information extracted from his books, you are required to prepare final accounts for the year ended December 31, 2018. Accounts from Incomplete Records Amount Kshs. Receipt from debtors. 57,500 Cash sales 45,000 Cash purchases 25,000 Wages paid 5,000 Salaries to staff 17,500 Trade expanses 6,500 Electricity bill of factory 7,500 Drawings of Karue 3,000 Cash paid to creditors 42,000 Discount allowed 1,200 Discount received 3,000 Bad debts written-off 1,300 Cash balance at end of year 20,000 Mr.Karue used goods worth Kshs.2, 500 for private purposes, which is not recorded in the books. Charge depreciation on furniture 10% and…
Mr.Karue started business on January 01, 2018, with cash of Kshs. 50,000, furniture of Kshs. 10,000, goods of Kshs.2, 000 and machinery worth Kshs.20, 000. During the year he further introduced Kshs. 20,000 in the business by opening a bank account. From the following information extracted from his books, you are required to prepare final accounts for the year ended December 31, 2018.Accounts from Incomplete Records Amount Kshs.Receipt from debtors. 57,500Cash sales 45,000Cash purchases 25,000Wages paid 5,000Salaries to staff…
On July 01, 2020, Maria initially invested P200,000 cash into Maria Merchandising. On the same date, she paid P45,000 for six months rent on the store space, P10,000 for business licenses and permits, and P50,000 for various store furniture. She also bought P60,000 worth of office supplies on account with the intention to sell them at a higher price. However, the next day, the business received a P1,500 credit memo for allowance granted on the purchased merchandise. The supplies were bought from 123 Supplies Store on terms n/60. On July 6, the business bought from 45 Supplies Shop P5,000 worth of supplies to be used in the store on terms 50% downpayment, balance n/30. Francisco, a part time employee, was able to sell on July 12 some of the store's merchandise to Mr. Sam for P16,000 on terms 50% downpayment, balance 2/10, n/30. On July 24, the business sold to Mrs. Aslani merchandise for P12,000 on terms 2/10, n/30. On July 30, Mr. Boom paid the business P42,000 for merchandise bought…
On November 1, 2020, Aleli Gomuna purchased a pest – control company from its previous owner. Aleli paid ₱220,000 from her personal checking account for assets consisting of pesticides supplies, ₱75,000 and spraying equipment, ₱145,000. The company is to operate under the name of Lily Gomuna Pest Control. The following transactions occurred during the month of November: a. Aleli invested additional ₱230,000 in the business. b. Pest control service for customers was done on account, ₱42,000. c. Pesticide supplies were acquired on account, ₱39,500. d. Spraying equipment costing ₱67,000 was acquired on account. e. Pest control service was rendered for cash, ₱87,000. f. Repairs were made to the equipment; ₱28,500 was paid in cash. g. Paid ₱17,000 for pesticide supplies recently acquired h. Rendered pest control service for customers on account, ₱63,000. i. Purchase pesticide supplies on account, ₱54,500 j. Paid for utilities, ₱20,500. k. Paid ₱56,500 for the salaries of personnel. l.…
Jon Yanta, owner of Yanta’s Yard Care, is disappointed that his business incurred a net loss for June of the current year. Mr. Yanta would have preferred not to have to reduce his capital by $880.00. He knows that you are studying accounting, so Mr. Yanta asks you to analyze his work sheet for June. Review the statements provided in the worksheet, and based on your analysis of the work sheet, indicate the likely causes of the net loss for Yanta’s Yard Care as well as the steps Mr. Yanta can take to avoid a net loss in future months. Select True or False for each of the given statements. Jon Yanta’s sales exceeded the amount of his expenses. Reducing expenses could improve the company’s results. An increase in total revenue could result in net income. Rent expense of $5,500 would have resulted in net income. Supplies expense were not a significant portion of total expenses. Selling more services would have no effect on revenues. An increase in prices could result in higher…
Dean Winchester opened Ghost Cleaners on June 1, 2021. He is the sole owner of the corporation.During June, the following transactions were completed by Dean.1-Jun Invested $65,000 in exchange for common stock in Ghost Cleaners, Inc.1-Jun Purchased a used van for $12,000, paying $3,000 cash and the taking out a note payable for the rest.He plans to pay off the remaining balance on the van by June 1, 2022. The note has a 10% APRwith interest being payable at the end of every month. No principle payments are due until August 1, 2021.1-Jun Paid $1,800 cash on a 12-month insurance policy effective June 1, 2021.1-Jun Hired his brother, Sam, to help with the corporation. He will be paid $1,000 per month for now.5-Jun Purchased cleaning supplies for $1,500 on account.7-Jun Billed a client, F. Crowley, for services performed on June 7 in the amount of $3,000.8-Jun Paid $100 for gasoline for the van.12-Jun Paid $200 for maintenance on the van.15-Jun Incurred wages expense of $2,000.16-Jun…
Dean Winchester opened Ghost Cleaners on June 1, 2021. He is the sole owner of the corporation.During June, the following transactions were completed by Dean.1-Jun Invested $65,000 in exchange for common stock in Ghost Cleaners, Inc.1-Jun Purchased a used van for $12,000, paying $3,000 cash and the taking out a note payable for the rest.He plans to pay off the remaining balance on the van by June 1, 2022. The note has a 10% APRwith interest being payable at the end of every month. No principle payments are due until August 1, 2021.1-Jun Paid $1,800 cash on a 12-month insurance policy effective June 1, 2021.1-Jun Hired his brother, Sam, to help with the corporation. He will be paid $1,000 per month for now.5-Jun Purchased cleaning supplies for $1,500 on account.7-Jun Billed a client, F. Crowley, for services performed on June 7 in the amount of $3,000.8-Jun Paid $100 for gasoline for the van.12-Jun Paid $200 for maintenance on the van.15-Jun Incurred wages expense of $2,000.16-Jun…
Dean Winchester opened Ghost Cleaners on June 1, 2021. He is the sole owner of the corporation.During June, the following transactions were completed by Dean.1-Jun Invested $65,000 in exchange for common stock in Ghost Cleaners, Inc.1-Jun Purchased a used van for $12,000, paying $3,000 cash and the taking out a note payable for the rest.He plans to pay off the remaining balance on the van by June 1, 2022. The note has a 10% APRwith interest being payable at the end of every month. No principle payments are due until August 1, 2021.1-Jun Paid $1,800 cash on a 12-month insurance policy effective June 1, 2021.1-Jun Hired his brother, Sam, to help with the corporation. He will be paid $1,000 per month for now.5-Jun Purchased cleaning supplies for $1,500 on account.7-Jun Billed a client, F. Crowley, for services performed on June 7 in the amount of $3,000.8-Jun Paid $100 for gasoline for the van.12-Jun Paid $200 for maintenance on the van.15-Jun Incurred wages expense of $2,000.16-Jun…
Assume you are the accounting manager for Logan’s Landscaping & Design. On December 1, 2013, Logan Karver, the owner, presents you with a check for $15,000 from a customer, Anna DeJuliet, to do a landscape design at her residence as soon as the ground thaws in the spring of 2014. No work on this project can be done until then. Logan wants you to deposit the check and include the $15,000 in the 2013 income statement. He is expecting to include the $15,000 in his 2013 net income in order to secure a loan from the bank in January 2014 for some new equipment. Write a Business Memo in proper format to Logan explaining how this check should be accounted for and why.