CHARLES DARWIN …UNIVERSITY

Part A: 1 Question Question 1 (80 Marks)

McDonalds Limited
Balance Sheet as at 1 July 2015
Assets Liabilities
Current Assets Current Liabilities
Cash 43900 Accounts Payable 28600
Accounts Receivable 27800 Accrues salaries 7100
Inventory 17500 Total current liabilities 35700
Prepaid Rent 6000
Total Current Assets 95200 Non-current liabilities
Long term loan 75000
Total Liabilities 110700
Non-Current Assets
Plant and Equipment 275000 Shareholder’s equity
Accumulated depreciation -65000 Share capital 150000
Investment 20000 Retained profits 64500
Total non-current assets 230000 Total shareholder’s equity 214500
Total Assets 325200 Total Liabilities and
shareholder’s equity
325200

 

The following transactions occurred for McDonalds Ltd for the year ending 30 June 2016:

  1. Issued additional share capital for $5000 cash
  2. Received $26 800 from accounts receivable
  3. Paid accrued salaries owing
  4. Purchased $62 000 inventory for cash
  5. Paid $16 900 to accounts payable
  6. Borrowed $70 000 on 1 January at 10% interest p.a. on 30 June interest on the loan was still outstanding.
  7. Purchased $39 000 inventory on credit
  8. Sold inventory costing $31 200 for $82 000 cash
  9. Sold inventory on credit for $153 000. Cost of inventory sold was $63 400
  10. On 2 March paid $31 200 rent for the next 12 months
  11. Dividends declared and paid totalled $5000
  12. Paid wages expense of $35 000; on 30 June 2016 wages of $9100 had been earned but not paid
  13. Interest receivable on investment is $1500
  14. Depreciation on plant and equipment is calculated using straight line method at 20% p.a.
  15. O. Received $4000 in June for services to be provided in July
  16. Paid administration expenses $12 200

Required:
a. Prepare journal entries for the above transactions (35 Marks)
b. Prepare ledgers (20 Marks)
c. Prepare closing entries ( 5 Marks)
d. Prepare a 10-cloumn worksheet (10 Marks)
e. Prepare an Income Statement for the year ending 30 June 2016 and Balance Sheet as
at 30 June 2016 for McDonalds Ltd.(10 Marks)

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