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The balance sheet of Simpson Ltd at 30 June 2021 was as follows: Simpson Ltd Balance Sheet as at 30 June 2021 Assets Liabilities Cash 320,000 Accounts payable 152,000 Inventory 125,000 Rent payable 1,000 Accounts Receivable 130,500 Wages payable 5,500 Prepaid Insurance 750 Total current liabilities 158,000 Supplies 3.750 Loan 200 500 Total current assets 580,000 Total Liabilities 358,500 Equipment 80,000 Shareholders' Equity Accumulated depreciation (59,500 Share capital 100,000 Total Non-Current Assets Retained profits Total Shareholders' Equity 20,500 142.000 Total Assets 600,500 242,000 The following events occurred for Simpson Ltd during the month of July 2021: a) Received $30,000 from accounts receivable. b) Bought equipment for $90,000 paying cash on 1 July 2021. The annual rate of depreciation for equipment owned by Simpson Limited increased to $9,000 following this transaction. c) $101,000 of credit sales occurred during the month. This inventory cost Simpson Ltd $42,000 to purchase. d) On July 1st 2021, borrowed $300,000 from the bank. The loan is due on 30 June 2023 when the principal will be repaid in full. The loan carries an interest rate of 10 per cent per annum. The monthly interest expense before the new loan was acquired was $1750 and an interest payment of $2050 was made during the month of July 2021. e) Paid $6,000 rent for the six-month period from 1 June 2021 to 31 August 2021. f) Paid wages of $20,000 during the month, $5,500 of which were owed for the month of June. $4,000 remained outstanding to employees at the end of July. g) Cash dividends of $6.000 declared of which $1,500 remained outstanding at the end of July. h) Paid an insurance policy worth $9,000 covering 1 August 2021 to 31 July 2022. Insurance is prepaid each year on 31 July. i) A physical count on 31 July shows that the ending balance of supplies is $1,750 j ) Received S7,000 for inventory to be delivered to a customer on 15 August 2021.

The balance sheet of Simpson Ltd at 30 June 2021 was as follows: Simpson Ltd Balance Sheet as at 30 June 2021 Assets Liabilities Cash 320,000 Accounts payable 152,000 Inventory 125,000 Rent payable 1,000 Accounts Receivable 130,500 Wages payable 5,500 Prepaid Insurance 750 Total current liabilities 158,000 Supplies 3.750 Loan 200 500 Total current assets 580,000 Total Liabilities 358,500 Equipment 80,000 Shareholders' Equity Accumulated depreciation (59,500 Share capital 100,000 Total Non-Current Assets Retained profits Total Shareholders' Equity 20,500 142.000 Total Assets 600,500 242,000 The following events occurred for Simpson Ltd during the month of July 2021: a) Received $30,000 from accounts receivable. b) Bought equipment for $90,000 paying cash on 1 July 2021. The annual rate of depreciation for equipment owned by Simpson Limited increased to $9,000 following this transaction. c) $101,000 of credit sales occurred during the month. This inventory cost Simpson Ltd $42,000 to purchase. d) On July 1st 2021, borrowed $300,000 from the bank. The loan is due on 30 June 2023 when the principal will be repaid in full. The loan carries an interest rate of 10 per cent per annum. The monthly interest expense before the new loan was acquired was $1750 and an interest payment of $2050 was made during the month of July 2021. e) Paid $6,000 rent for the six-month period from 1 June 2021 to 31 August 2021. f) Paid wages of $20,000 during the month, $5,500 of which were owed for the month of June. $4,000 remained outstanding to employees at the end of July. g) Cash dividends of $6.000 declared of which $1,500 remained outstanding at the end of July. h) Paid an insurance policy worth $9,000 covering 1 August 2021 to 31 July 2022. Insurance is prepaid each year on 31 July. i) A physical count on 31 July shows that the ending balance of supplies is $1,750 j ) Received S7,000 for inventory to be delivered to a customer on 15 August 2021.

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 103.3C
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The balance sheet of Simpson Ltd at 30 June 2021 was as follows: Simpson Ltd Balance Sheet as at 30 June 2021 Assets Liabilities Cash 320,000 Accounts payable 152,000 Inventory 125,000 Rent payable 1,000 Accounts Receivable 130,500 Wages payable 5.500 Prepaid Insurance 750 Total current liabilities 158,000 Supplies 3,750 Loan 200,500 Total current assets 580,000 Total Liabilities 358,500 Equipment 80,000 Shareholders' Equity Accumulated depreciation (59,500) Share capital 100,000 Total Non-Current Assets 20,500 Retained profits 142,000 Total Assets 600,500 Total Shareholders' Equity 242,000 The following events occurred for Simpson Ltd during the month of July 2021: a) Received $30,000 from accounts receivable. b) Bought equipment for $90,000 paying cash on 1 July 2021. The annual rate of depreciation for equipment owned by Simpson Limited increased to $9,000 following this transaction. c) $101,000 of credit sales occurred during the month. This inventory cost Simpson Ltd $42,000 to purchase. d) On July 1st 2021, borrowed $300,000 from the bank. The loan is due on 30 June 2023 when the principal will be repaid in full. The loan carries an interest rate of 10 per cent per annum. The monthly interest expense before the new loan was acquired was $1750 and an interest payment of $2050 was made during the month of July 2021. e) Paid $6,000 rent for the six-month period from 1 June 2021 to 31 August 2021. f) Paid wages of $20,000 during the month, $5,500 of which were owed for the month of June. $4,000 remained outstanding to employees at the end of July. g) Cash dividends of $6,000 declared of which $1,500 remained outstanding at the end of July. h) Paid an insurance policy worth $9,000 covering 1 August 2021 to 31 July 2022. Insurance is prepaid each year on 31 July. i) A physical count on 31 July shows that the ending balance of supplies is $1,750 j) Received $7,000 for inventory to be delivered to a customer on 15 August 2021.
Transcribed Image Text:The balance sheet of Simpson Ltd at 30 June 2021 was as follows: Simpson Ltd Balance Sheet as at 30 June 2021 Assets Liabilities Cash 320,000 Accounts payable 152,000 Inventory 125,000 Rent payable 1,000 Accounts Receivable 130,500 Wages payable 5.500 Prepaid Insurance 750 Total current liabilities 158,000 Supplies 3,750 Loan 200,500 Total current assets 580,000 Total Liabilities 358,500 Equipment 80,000 Shareholders' Equity Accumulated depreciation (59,500) Share capital 100,000 Total Non-Current Assets 20,500 Retained profits 142,000 Total Assets 600,500 Total Shareholders' Equity 242,000 The following events occurred for Simpson Ltd during the month of July 2021: a) Received $30,000 from accounts receivable. b) Bought equipment for $90,000 paying cash on 1 July 2021. The annual rate of depreciation for equipment owned by Simpson Limited increased to $9,000 following this transaction. c) $101,000 of credit sales occurred during the month. This inventory cost Simpson Ltd $42,000 to purchase. d) On July 1st 2021, borrowed $300,000 from the bank. The loan is due on 30 June 2023 when the principal will be repaid in full. The loan carries an interest rate of 10 per cent per annum. The monthly interest expense before the new loan was acquired was $1750 and an interest payment of $2050 was made during the month of July 2021. e) Paid $6,000 rent for the six-month period from 1 June 2021 to 31 August 2021. f) Paid wages of $20,000 during the month, $5,500 of which were owed for the month of June. $4,000 remained outstanding to employees at the end of July. g) Cash dividends of $6,000 declared of which $1,500 remained outstanding at the end of July. h) Paid an insurance policy worth $9,000 covering 1 August 2021 to 31 July 2022. Insurance is prepaid each year on 31 July. i) A physical count on 31 July shows that the ending balance of supplies is $1,750 j) Received $7,000 for inventory to be delivered to a customer on 15 August 2021.
Present the Total Shareholders Equity Section of the Balance Sheet of Simpson Limited at 31 July 2021 Note: please use the following approach when answering this question: Retained Profits at start of period x Adjustment - insert account name x/(x) Adjustment - insert account name x/(x) Retained profits at end of period x Share Capital x Total Shareholders Equity x
Transcribed Image Text:Present the Total Shareholders Equity Section of the Balance Sheet of Simpson Limited at 31 July 2021 Note: please use the following approach when answering this question: Retained Profits at start of period x Adjustment - insert account name x/(x) Adjustment - insert account name x/(x) Retained profits at end of period x Share Capital x Total Shareholders Equity x
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