Accruals and Prepayments | IGCSE and As Level PPT | Krishna Agarwal
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accounting period.
Rental earned (Oct & Nov 2005) : 2 months x RM200 = RM400
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Question 1
Classifying Accounts
Balances for each of the following accounts appear in an adjusted trial balance. Identify each as an asset, liability, revenue, or expense.
1. Accounts Receivable
2. Equipment
3. Fees Earned
4. Insurance Expense
5. Land
6. Prepaid Rent
7. Rent Revenue
8. Salary Expense
9. Salary Payable
10. Supplies
11. Unearned Rent
12. Wages Payable
Question 2
Financial Statements from the End-of-Period Spreadsheet
Elliptical Consulting is a consulting firm owned and operated by Jayson Neese. The following end-of-period spreadsheet was prepared for the year ended June 30, 2019:
Elliptical Consulting
End-of-Period Spreadsheet
For the Year Ended June 30, 2019
Unadjusted
Adjusted
Trial Balance
Adjustments
Trial Balance
Account Title
Dr.
Cr.
Dr.
Cr.
Dr.
Cr.
Cash
27,000
27,000
Accounts Receivable
53,500
53,500
Supplies
3,000
(a)
2,100
900
Office Equipment
30,500
30,500
Accumulated Depreciation
4,500
(b)
1,500
6,000
Accounts Payable
3,300
3,300
Salaries Payable
(c)
375
375
Jayson Neese, Capital
82,200
82,200
Jayson Neese, Drawing
2,000
2,000
Fees Earned
60,000
60,000
Salary Expense
32,000
(c)
375
32,375
Supplies Expense
(a)
2,100
2,100
Depreciation Expense
(b)
1,500
1,500
Miscellaneous Expense
2,000
2,000
150,000
150,000
3,975
3,975
151,875
151,875
Based on the preceding spreadsheet, prepare an income statement for Elliptical Consulting.
Elliptical Consulting
Income Statement
For the Year Ended June 30, 2019
$
Expenses:
$
Total expenses
$
Based on the preceding spreadsheet, prepare a statement of owner's equity for Elliptical Consulting.
Elliptical Consulting
Statement of Owner's Equity
For the Year Ended June 30, 2019
$
$
$
Based on the preceding spreadsheet, prepare a balance sheet for Elliptical Consulting.
Elliptical Consulting
Balance Sheet
June 30, 2019
Assets
Current assets:
$
Total current assets
$
Property, plant, and equipment:
$
Total property, plant, and equipment
Total assets
$
Liabilities
Current liabilities:
$
Total liabilities
$
Owner's Equity
Total liabilities and owner's equity
$
Question 3:
Income Statement; Net Loss
The following revenue and expense account balances were taken from the ledger of Wholistic Health Services Co. after the accounts had been adjusted on February 28, 2019, the end of the fiscal year:
Depreciation Expense
$7,500
Insurance Expense
3,000
Miscellaneous Expense
8,150
Rent Expense
54,000
Service Revenue
448,400
Supplies Expense
2,750
Utilities Expense
33,900
Wages Expense
360,000
Prepare an income statement. Use a minus sign to indicate a net loss.
Wholistic Health Services Co.
Income Statement
For the Year Ended February 28, 2019
$
Expenses:
$
Total expenses
Question 4:
Statement .
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Option #1: Venture Consultants, Power and Demolition Company, and Warnerwood Accounting Cases
PART 1:
Venture Consultants
The month of March transactions
Date
Account Names
Debit
Credit
1-Mar
2-Mar
3-Mar
6-Mar
9-Mar
12-Mar
19-Mar
22-Mar
25-Mar
29-Mar
30-Mar
30-Apr
$221,000
$221,000
PART 2A
Power and Demolition Co, Adjustment April 30, 2015
Adjust #
Account Names
Debit
Credit
1
2
3
4
5
6
7
8
PART 2B
Power and Demolition Co, Adjustment April 30, 2015
Continued
UTB
ADJUSTMENT
Acct #
Account Names
Debit
Credit
Debit
Credit
Debit
101
Cash
$7,000
$7,000
126
Supplies
$16,000
128
Pre-paid insurance
$12,600
167
Equipment
$200,000
Accumulated. Depreciation
$14,000
201
Account payable
$6,800
Utilities payable
Wages payable
Rent Payable
PropertyTxPayable
Interest payable
251
Long-term notes payable
$30,000
301
Bonn, Equity
$86,900
302
Bonn, Withdrawals
$12,000
401
Demolition fees earned
$187,000
623
Wage expense
$41,400
633
Interest expense
$3,300
640
Rent expense
$13,200
683
Property tax expense
$9,700
684
Repairs expense
$4,700
690
Utilities expense
$4,800
Supply expense
Insurance expense
Depreciation expense
TOTALS
$324,700
$324,700
PART 3
Warnerwood Company
Column->
A
B
C
D
E
F
G
Date
Activities
# Units Buy
Cost/unit
#Units Sold
Price/unit
Cost GAS
Sales
1-Mar
BI
5-Mar
TI
9-Mar
TO
18-Mar
TI
25-Mar
TI
29-Mar
TO
TOTAL
Q1. Units in Available for Sales is BI + TI (Column B)=
Units (BI + TI) =
Q2. BI + TI - TO = EI=
820
minus
580
equals
240
Q3. FIFO
Q3. LIFO
Q3. Weighted Average
Weighted cost/unit=
Cost EI=
Q.4
Sales
COGS/Method
Gross Profit
Q4. FIFO
Q4. LIFO
Q4. WtAvg
Portfolio
Project Option 1 Student Template
Option #1
:
Venture Consultants, Power and Demolition Company, and Warnerwood
Accounting Cases
PART 1:
Venture Consultants
The month of March transactions
Date
Account
Names
Debit
Credit
1
-
Mar
2
-
Mar
3
-
Mar
6
-
Mar
9
-
Mar
12
-
Mar
19
-
Mar
22
-
Mar
25
-
Mar
29
-
Mar
30
-
Mar
.
Chapter 2 Basic Financial Statements exercise and solutions
This document contains sample balance sheets, income statements, and accounting exercises involving the accounting equation and recording business transactions. The exercises demonstrate how to prepare basic financial statements, record the effects of transactions on the accounting equation, and interpret financial statements. Key elements include assets, liabilities, owner's equity, revenues, expenses, and how various transactions impact these elements.
Sf
This document provides a 30 question multiple choice final exam for ACC 290 Principles of Accounting I. It tests fundamental accounting concepts like the four basic financial statements, debits and credits, adjusting entries, and inventory costing methods. The questions cover the accounting equation, calculating financial metrics like cost of goods sold and gross profit, and basic bookkeeping skills like journal entries and T-accounts. Correct answers to all 30 questions are provided for $8.99.
AWeek Five Exercise AssignmentFinancial Ratios1. Liquidity r.docx
AWeek Five Exercise Assignment
Financial Ratios
1. Liquidity ratios. Edison, Stagg, and Thornton have the following financial information at the close of business on July 10:
Edison
Stagg
Thornton
Cash
$4,000
$2,500
$1,000
Short-term investments
3,000
2,500
2,000
Accounts receivable
2,000
2,500
3,000
Inventory
1,000
2,500
4,000
Prepaid expenses
800
800
800
Accounts payable
200
200
200
Notes payable: short-term
3,100
3,100
3,100
Accrued payables
300
300
300
Long-term liabilities
3,800
3,800
3,800
a. Compute the current and quick ratios for each of the three companies. (Round calculations to two decimal places.) Which firm is the most liquid? Why?
2. Computation and evaluation of activity ratios. The following data relate to Alaska Products, Inc:
20X5
20X4
Net credit sales
$832,000
$760,000
Cost of goods sold
440,000
350,000
Cash, Dec. 31
125,000
110,000
Average Accounts receivable
180,000
140,000
Average Inventory
70,000
50,000
Accounts payable, Dec. 31
115,000
108,000
a. Compute the accounts receivable and inventory turnover ratios for 20X5. Alaska rounds all calculations to two decimal places.
3. Profitability ratios, trading on the equity. Digital Relay has both preferred and common stock outstanding. The company reported the following information for 20X7:
Net sales
$1,500,000
Interest expense
$120,000
Income tax expense
$80,000
Preferred dividends
$25,000
Net income
$130,000
Average assets
$1,100,000
Average common stockholders' equity
$400,000
a. Compute the profit margin ratio, the return on equity and the return on assets, rounding calculations to two decimal places.
b. Does the firm have positive or negative financial leverage? Briefly explain.
4. Horizontal analysis. Mary Lynn Corporation has been operating for several years. Selected data from the 20X1 and 20X2 financial statements follow.
20X2
20X1
Current Assets
$76,000
$80,000
Property, Plant, and Equipment (net)
99,000
90,000
Intangibles
25,000
50,000
Current Liabilities
40,800
48,000
Long-Term Liabilities
143,000
160,000
Stockholders’ Equity
16,200
12,000
Net Sales
500,000
500,000
Cost of Goods Sold
332,500
350,000
Operating Expenses
93,500
85,000
Prepare a horizontal analysis for 20X1 and 20X2. Briefly comment on the results of your work.
5. Vertical analysis. Mary Lynn Corporation has been operating for several years. Selected data from the 20X1 and 20X2 financial statements follow.
20X2
20X1
Current Assets
$ 76,000
$ 80,000
Property, Plant, and Equipment (net)
99,000
90,000
Intangibles
25,000
50,000
Current Liabilities
40,800
48,000
Long-Term Liabilities
143,000
160,000
Stockholders’ Equity
16,200
12,000
Net Sales
500,000
500,000
Cost of Goods Sold
332,500
350,000
Operating Expenses
93,500
85,000
Prepare a vertical analysis for 20X1 and 20X2. Briefly comment on the results of your work.
6. Ratio computation. The financial statements of the Lone Pine Company follow.
LONE PINE COMPANY
Comparat ...
Chapter 3
The document discusses the differences between accrual and cash basis accounting. Accrual basis accounting records revenues when earned and expenses when incurred, while cash basis accounting records revenues when cash is received and expenses when cash is paid. Deferred revenues/expenses occur when cash is received/paid before being earned/incurred, while accrued revenues/expenses occur when cash is received/paid after being earned/incurred. Examples are provided to illustrate deferred and accrued revenues and expenses. The closing process transfers revenue, expense, and dividend account balances to retained earnings.
accounting exam.docx
Sherif Consultant Group provides engineering consulting services. The document provides 25 transactions from January 1-25, 2019 to practice journalizing, posting to accounts, and preparing financial statements using the accounting equation and T-accounts. Key aspects covered include unearned and prepaid revenues, depreciation using straight-line method, and allowance method for estimating uncollectible accounts. The income statement shows net income of $12,000 and the balance sheet lists assets of $87,500 equal to liabilities and owner's equity.
accounting exam (1).docx
Sherif Consultant Group provides engineering consulting services. During January 2019, Sherif recorded over 25 transactions including starting the business, purchases, sales, expenses, payments, and adjusting entries. The transactions were recorded in a general journal and posted to accounts. Financial statements including an income statement, owner's equity statement, and balance sheet were prepared showing the results for the month.
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Accruals and Prepayments | IGCSE and As Level PPT | Krishna Agarwal
- 2. Accruals and prepayments Before we prepare the final accounts of a business it is often necessary to adjust the figures in the trial balance because:
- 3. We may still owe money for items we have used in the financial year. We may have paid for some items in advance. We may be owed revenue. We may have paid revenue in advance.
- 4. What are accruals? An accrual is an estimate of money that is owed, but which has not yet been paid.
- 5. What are prepayments? A prepayment is a payment made in advance of the current period.
- 6. A business with an accounting year end of 31 December. On 1 January 2006 electricity owing amounted to £400. The business paid electricity of £3,000 during the year. There is £250 owing for electricity at 31 December 2006. Example of an accrued expense
- 7. Electricity account Dr Electricity account Cr
- 8. Electricity account Dr Electricity account Cr Bal b/d 400
- 9. Electricity account Dr Electricity account Cr Bank 3,000 Bal b/d 400
- 10. Electricity account Dr Electricity account Cr Bank 3,000 Bal b/d 400 Bal c/d 250
- 11. Electricity account Dr Electricity account Cr Bank 3,000 Bal b/d 400 Bal c/d 250 Profit and loss 2,850 3,250 3,250
- 12. Profit and loss account for the year ended 31 December 2006 (extract) Less expenses Electricity 2,850 Balance sheet as at 31 December 2006 (extract) Current liabilities Electricity accrued 250
- 13. A business has an accounting year end of 31 December. On 1 January 2006 insurance of £300 had been paid in advance. During 2006 the business has paid £2,000 for insurance. However, this includes a pre-payment for £100 for the year beginning 1 January 2007. Example of a prepaid expense
- 14. Insurance account Dr Insurance account Cr
- 15. Insurance account Dr Insurance account Cr Bal b/d 300
- 16. Insurance account Dr Insurance account Cr Bal b/d 300 Bank 2,000
- 17. Insurance account Dr Insurance account Cr Bal b/d 300 Bank 2,000 Bal c/d 100
- 18. Insurance account Dr Insurance account Cr Bal b/d 300 Profit and loss 2,200 Bank 2,000 Bal c/d 100 2,300 2,300
- 19. Profit and loss account for the year ended 31 December 2006 (extract) Less expenses Insurance 2,200 Balance sheet as at 31 December 2006 (extract) Current assets Insurance prepaid 100
- 20. On 1 January 2006 commission receivable is owing of £400. During the year the business receives commission of £6,500. However, £500 of commission is still owed to the business as at 31 December 2006. Example of an accrued revenue
- 21. Commission received Dr Commission received Cr
- 22. Commission received Dr Commission received Cr Bal b/d 400
- 23. Commission received Dr Commission received Cr Bal b/d 400 Bank 6,500
- 24. Commission received Dr Commission received Cr Bal b/d 400 (1)Bank 6,500 (1)Bal c/d 500
- 25. Commission received Dr Commission received Cr Bal b/d 400 (1)Bank 6,500 Profit and Loss 6,600 (1)Bal c/d 500 7,000 7,000
- 26. THANKYOU FOR WATCHINGTHANKYOU FOR WATCHING Find More Content at Slideshare “Krishna429”Find More Content at Slideshare “Krishna429”