Question 1

Sandox Retail has the following unadjusted trial balance as at 30 June 2020 in the table:

Accounts Debit ($) Credit ($)
Cash 8,524
Accounts Receivable 7,000
Supplies 15,000
Prepaid Insurance 300
Insurance Expense 600
Equipment 27,000
Accumulated Depreciation 12,000
Other Assets 5,100
Wages Payable 1,500
Accounts Payable 7,500
Income Tax Payable 3,150
Share Capital (3000 shares outstanding all year) 16,000
Retained Profit 10,300
Sales Revenue 95,000
COGS 32,900
Wages Expense 18,000
Supplies Expense 25,680
Income Tax Expense 5,346
Total 145,450 145,450

 

Required:

  1. Prepare an Income Statement for Sandox Retail for the financial year 2019-2020.
  2. Prepare a Balance Sheet as of 30 June 2020.
  3. Prepare the closing journals for Sandox Retail.

 

Question 2

Beacon Limited had the following trial balance as at 1 January 2019, as shown in the table below:

  Account Debit $ Credit $
Cash 250 000
Accounts receivable 600 000
Inventory 730 000
Prepaid insurance 60 000
Prepaid rent 50 000
Equipment 1 500 000
Allowance for doubtful debts 20 000
Accumulated depreciation 500 000
Accounts payable 700 000
Revenue received in advance 120 000
Income tax payable 530 000
Loan 600 000
Share capital 400 000
Retained profits 320 000
3 190 000 3 190 000

 

You are given the following additional information for the year ended 31 December 2019:

  1. Bad debts of $14,380 were written off.
  2. It was decided that allowance for doubtful debts should be 5 per cent of accounts receivable.

Required:

  1. Prepare journal entries for these transactions.
  2. State the balance of the following accounts via T-ledger for the year ended 31 December 2019:
    1. Accounts receivable
    2. Allowance for doubtful debts

 

Question 3

The following information has been extracted from the records of Kakadu Ltd, which sells special camping tents. The company uses the perpetual inventory system to record stock. Its monthly reporting date is 31 May. Kakadu Ltd uses the FIFO Method.

Date Transaction Quantity $ Unit cost
1/05 Beginning balance 6 720
6/05 Purchases (850/unit) 4 600
16/05 Sold @1700/unit 8 ?
17/05 Purchases 6 650
29/05 Sold @ 1500/unit 2 ?
30/05 Sales Return from 29/03 Sales 1 ?

 

Required:

  1. Ignoring GST and narrations, create and complete the inventory stock record shown above for transactions during the month of May.
  2. Calculate the cost of inventory on hand as at 31 May and the cost of sales as at 31 May.

 

Question 4

Transactions and balances for Diana Wonder are provided below:

  • 31 Jul 2020 Bank Statement balance $ 78,495
  • 31 Jul 2020 balance per Diana’s records $ 77,370
  • Diana received a cash payment that she has not deposited $ 380
  • Diana issued a cheque payable to Michael Hill Enterprises that has not been presented to the bank $ 1,499
  • Bank charges for the month of July were $10
  • Interest on bank balance credited to Diana’s account $ 16

Required:

Perform a bank reconciliation.

  1. Reconcile Diana Wonder’s month end cash balance as of 31 Jul 2020.
  2. Based on your analysis, propose the adjusting entries (if any).

 

Question 5

Greyhound Ltd purchased a new bus for $280,000. The company expects the bus to be used for trips between Sydney and Melbourne for 8 years, or 400,000 miles, with an estimated residual value of $40,000 at the end of that time. During the third (3rd) year, the bus was driven 60,000 miles.

Required:

Calculate the depreciation expense for the 3rd year using each of the depreciation methods: a), b) and c) stated below. (Show ALL of your workings and calculations)

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

 

Question 6

Safeway Inc. had the following comparative current assets and current liabilities, as shown below:

         Current Assets 31 Dec 2019 31 Dec 2018
               Cash $ 65,000 $  25,000
               Marketable securities 30,000 15,000
               Accounts receivable 42,000 80,000
               Inventory 120,000 90,000
               Prepaid expenses     35,000     20,000
         Total Current Assets       $292,000 $230,000
         Current Liabilities    
               Accounts payable $145,000 $130,000
               Salaries payable 40,000 30,000
               Income tax payable     20,000     15,000
         Total Current liabilities $205,000 $175,000

 

Additional Information

During 2019 net credit sales were $680,000 and the associated cost of goods sold was $365,000.  Net cash provided by operating activities for 2019 was $142,000.

Required:

Based on the comparative current assets and current liabilities of Safeway Inc., as shown above, compute the following ratios:

  1. Current ratio for both 2018 and 2019.
  2. Quick ratio for both 2018 and 2019.
  3. Current cash debt coverage ratio for 2019.
  4. Receivables turnover for 2019.
  5. Inventory turnover for 2019.
$40.00 – 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.