Question 1

Peakhurst Limited had the following trial balance at 1 January 2016:

Debit $ Credit $
Cash 200 000
Accounts receivable 600 000
Inventory 700 000
Prepaid insurance 60 000
Prepaid rent 50 000
Equipment 1 000 000
Allowance for doubtful debt 20 000
Accumulated depreciation 200 000
Accounts payable 500 000
Revenue received in advance 100 000
Income tax payable 500 000
Loan 570 000
Share capital 400 000
Retained profits 320 000
2 610 000 2 610 000

 

You are given the following additional information for the year ended 31 December 2016:

  1. Bad debts of $8000 were written off.
  2. It was decided that allowance for doubtful debts should be 4 per cent of accounts receivable.

 

Required:

  1. Prepare journal entries for these transactions.
  2. Show the T-ledger accounts for the following for the year ended 31 December 2016:
    1. accounts receivable
    2. allowance for doubtful debts
    3. bad debts expense

 

Question 2

Perform a bank reconciliation.

  1. Reconcile Jack Steel’s month end cash balance as of 31 Jul 2019
  2. Based on your analysis, propose adjusting entries (if any).

 

Transactions and balances:

  • 31 Jul 2019 Bank Statement balance $ 58,791
  • 31 Jul 2019 balance per Jack’s records $ 57,371
  • Jack received a payment that he has not deposited $ 250
  • Jack issued a cheque payable to Pandora’s Jewels to pay for a belated Mother’s Day gift to his grandmother that has not been presented to the bank $ 1,612
  • Bank charges for the month of July were $40
  • Interest on bank balance credited to Jack’s account $ 98

 

Question 3

Murrays Ltd. purchased a new bus for $200,000. The company expects the bus to be used for trips between Sydney and Canberra for 10 years, or 800,000 miles, with an estimated residual value of $30,000 at the end of that time. During the 3rd year the bus was driven 96,000 miles. Calculate the depreciation expense for the 3rd year for each of the methods below.  Show your solutions.

  1. Straight-line
  2. Diminishing balance at 20% p.a.
  3. Units-of-activity

 

Question 4

Banksia Company completed the following transactions during 2018-2019.  The annual accounting period ends 30 June 2019.

  1. Purchased inventory on credit at cost of AUD 16,800; perpetual inventory system is used.
  2. Received a customer deposit of AUD 18,000 from ABC Ltd for services to be rendered in the future.
  3. Borrowed AUD 900,000 from the bank on 1 March 2019 by giving the bank a six-month, 9% interest bearing note payable.
  4. Performed AUD 8,000 of the services paid for by ABC Ltd; the rest will be rendered in August 2019.
  5. Received the electricity bill for AUD 24,200, which will be paid in early July.
  6. On 1 June 2019 received rent in advance of AUD 21,600 from XYZ Ltd for a 3 month lease of premises from 1 June until 31 August 2019.
  7. Wages accrued in the last weekly payroll amounted to AUD 23,000 and will be paid on 5 July 2019.

 

Required:

  1. Prepare the journal entries for each of these transactions.
  2. Prepare all adjusting entries required on 30 June 2019.
$25.00 – Buy Solution

Click on Buy Solution and make payment. All prices shown above are in USD. Payment supported in all currencies. Price shown above includes the solution of all questions mentioned on this page. Please note that our prices are fixed (do not bargain).

After making payment, solution is available instantly.Solution is available either in Word or Excel format unless otherwise specified.

If your question is slightly different from the above question, please contact us at info@myassignmentguru.com with your version of question.