Sandox Retail has the following unadjusted trial balance as at 30 June 2020 in the table:
|Accounts||Debit ($)||Credit ($)|
|Income Tax Payable||3,150|
|Share Capital (3000 shares outstanding all year)||16,000|
|Income Tax Expense||5,346|
- Prepare an Income Statement for Sandox Retail for the financial year 2019-2020.
- Prepare a Balance Sheet as of 30 June 2020.
- Prepare the closing journals for Sandox Retail.
Beacon Limited had the following trial balance as at 1 January 2019, as shown in the table below:
|Account||Debit $||Credit $|
|Accounts receivable||600 000|
|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|
|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:
- Bad debts of $14,380 were written off.
- It was decided that allowance for doubtful debts should be 5 per cent of accounts receivable.
- Prepare journal entries for these transactions.
- State the balance of the following accounts via T-ledger for the year ended 31 December 2019:
- Accounts receivable
- Allowance for doubtful debts
The following information has been extracted from the records of Kakadu Ltd, which sells special camping tents. The company uses the perpetual inventory system to record stock. Its monthly reporting date is 31 May. Kakadu Ltd uses the FIFO Method.
|Date||Transaction||Quantity||$ Unit cost|
|29/05||Sold @ 1500/unit||2||?|
|30/05||Sales Return from 29/03 Sales||1||?|
- Ignoring GST and narrations, create and complete the inventory stock record shown above for transactions during the month of May.
- Calculate the cost of inventory on hand as at 31 May and the cost of sales as at 31 May.
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
Perform a bank reconciliation.
- Reconcile Diana Wonder’s month end cash balance as of 31 Jul 2020.
- Based on your analysis, propose the adjusting entries (if any).
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 $40,000 at the end of that time. During the third (3rd) year, the bus was driven 60,000 miles.
Calculate the depreciation expense for the 3rd year using each of the depreciation methods: a), b) and c) stated below. (Show ALL of your workings and calculations)
- Diminishing balance at 20% p.a.
Safeway Inc. had the following comparative current assets and current liabilities, as shown below:
|Current Assets||31 Dec 2019||31 Dec 2018|
|Cash||$ 65,000||$ 25,000|
|Total Current Assets||$292,000||$230,000|
|Income tax payable||20,000||15,000|
|Total Current liabilities||$205,000||$175,000|
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.
Based on the comparative current assets and current liabilities of Safeway Inc., as shown above, compute the following ratios:
- Current ratio for both 2018 and 2019.
- Quick ratio for both 2018 and 2019.
- Current cash debt coverage ratio for 2019.
- Receivables turnover for 2019.
- Inventory turnover for 2019.
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