Professional Documents
Culture Documents
School
of
Business
ACCT1501
Accounting
and
Financial
Management
1A
Session
1
2013
TUTORIAL WEEK 5 Solutions to Preparation Questions
Preparation Questions: v DQ 4.2, 4.6, 4.7, 4.16; P4.2, P 4.10 DQ4.2 Journal entries are the first records of an accounting transaction in the accounting records. DQ4.6 A trial balance is a standard bookkeeping procedure to check whether certain errors have been made in posting the journal entries to the ledger. It is a test to see whether total debits equal total credits. DQ4.7 Closing entries formally transfer the balances of the revenue and expense accounts to a profit and loss summary and then to retained profits. Closing entries also reset the revenue and expense account balances to zero to begin recording these items for the next accounting period DQ4.16
Transactions a A cash payment Source Documents Listings of cash payments; evidence such as creditors statement, invoices and receipt or payroll statement b c d e f A cash receipt A credit sale Cost of goods sold A purchase of inventory Receipt of inventory Duplicate copy of receipt or cash register Duplicate copy of invoice Duplicate copy of invoice or cash receipt or separate summary Invoice received from supplier, delivery docket and order Goods received advice and suppliers packing slip
Problem 4.10
1. General journal Date 2012 April 1 Bank of NZ Share capital Opening capital received from Carlson 2 Delivery truck Loan from Finance Co. Truck bought from Finance Co. to become long-term loan 4 Inventories Sundry creditors Goods bought on credit for resale 7 Delivery truck expenses Bank of NZ Paid delivery truck expenses 10 Bank of NZ Sales Cost of goods sold Inventories Sales made for cash 15 Sundry debtors Sales Cost of goods sold Inventories Sales made to credit customers 25 Salary Shop assistant Bank of NZ Paid shop assistants salary for month 27 Office expenses Bank of NZ Paid office expenses 29 Bank of NZ Sundry debtors Cash receipts from credit customers 29 Sundry creditors Bank of NZ Paid sundry creditors 29 Interest expense Bank of NZ 49 30 800 800
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Particulars
Ledger folio 30 1 35 15
Dr $ 150,000
Cr $
32 10 45 30 30 20 40 32 31 20 40 32 43 30 47 30 30 31 10 30
200,000 200,000 4,800 4,800 50,000 50,000 30,000 30,000 120,000 120,000 70,000 70,000 8,000 8,000 26,000 26,000 90,000 90,000 100,000 100,000
Ledger of Carlson Ltd 1 Share capital 2012 April 1 9 Profit and loss Bank of NZ 150,000
10 Sundry creditors 2012 April 29 Bank of NZ 100,000 2012 April 4 Inventories 200,000
15 Loan from Finance Co. 2012 April 2 20 Sales 2012 April 10 15 30 Bank of NZ 2012 April 10 29 1 Share capital 150,000 Sales Sundry debtors 50,000 90,000 25 27 29 29 31 Sundry debtors 2012 April 15 Sales 120,000 2012 April 29 Bank of NZ 90,000 2012 April 7 Delivery truck expenses Salary Shop assistant Office expenses Sundry creditors Interest expense 8,000 26,000 100,000 800 4,800 Bank of NZ Sundry Debtors 50,000 120,000 Delivery truck 80,000
32 Inventories 2012 April 4 Sundry creditors 200,000 2012 April 10 15 Cost of goods sold Cost of goods sold 30,000 70,000
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40 Cost of goods sold 2012 April 10 15 Inventories Inventories 30,000 70,000 42 Salary Shop assistant 2012 April 25 Bank of NZ 8,000 45 Delivery truck expenses 2012 April 7 Bank of NZ 4,800 47 Office expenses 2012 April 27 Bank of NZ 26,000 49 Interest expense 2012 April 29 Bank of NZ 800
3 Trial Balance Dr 1 Share capital 9 Profit and loss 10 Sundry creditors 15 Loan from Finance Co. 20 Sales 30 Bank of NZ 31 Sundry debtors 32 Inventories 35 Delivery truck 40 Cost of goods sold 42 Salary Shop assistant 45 Delivery truck expenses 47 Office expenses 49 Interest expense 150,400 30,000 100,000 80,000 100,000 8,000 4,800 26,000 800 500,000 500,000 Cr 150,000 100,000 80,000 170,000
Closing entries
General journal Date Particulars Posting ref. 20 8 9 40 42 45 47 49 9 2 30,400 30,400 139,600 100,000 8,000 4,800 26,000 800 Dr $ 170,000 170,000 Cr $
2012 April 30 Sales Profit and loss Transfer of closing balance Profit and loss Cost of goods sold Salary Shop assistant Delivery truck expenses Office expenses Interest expense Transfer of closing balances Profit and loss Retained profits Transfer of net profit for April 2012
2 Retained profits 2012 April 30 9 Profit and loss 2012 April 30 Cost of goods sold Salary Shop Assistant Delivery truck Expenses Office expenses Interest expense Retained profits 100,000 8,000 4,800 26,000 800 30,400
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30,400
170,000 10 Sundry creditors 2012 April 29 30 Bank of NZ Balance 100,000 100,000 200,000 April 30 Balance 2012 April 4 Inventories
170,000
15 Loan from Finance Co. 2012 April 2 20 Sales 2012 April 30 Profit and loss 170,000 2012 April 10 15 170 000 30 Bank of NZ 2012 April 1 10 29 Share Capital 150,000 Sales Sundry debtors 50,000 90,000 25 27 29 30 290,000 April 30 Balance 150,400 31 Sundry debtors 2012 April 15 Sales 120,000 120,000 April 30 Balance 30,000 32 Inventories 2012 April 4 Sundry creditors 200,000 2012 April 10 Cost of goods sold 30,000
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Delivery truck
80,000
2012 April 7 Delivery truck Expenses Salary Shop assistant Office expenses Sundry creditors Interest expenses Balance 8,000 26,000 100,000 800 150,400 290,000 4,800
15 30 200,000 April 30 Balance 100,000 35 Delivery truck 2012 April 2 Loan from Finance Co. 80,000
40 Cost of goods sold 2012 April 10 15 Inventories Inventories 30,000 70,000 100,000 42 Salary Shop assistant 2012 April 25 Bank of NZ 8,000 2012 April 30 Profit and loss 8,000 100,000 2012 April 30 Profit and loss 100,000
45 Delivery truck expenses 2012 April 7 Bank of NZ 4,800 2012 April 30 Profit and loss 4,800
47 Office expenses 2012 April 27 Bank of NZ 26,000 2012 April 30 Profit and loss 26,000
49 Interest expense 2012 April 29 Bank of NZ 800 2012 April 30 Profit and loss 800
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5
Carlson Ltd Income Statement for month ended 30 April 2012 $ Sales Less: Cost of goods sold Gross margin Less: Operating expenses Salary Shop assistant Delivery truck expenses Office expenses Interest expense Net profit 8,000 4,800 26,000 800 39,600 30,400 $ $ 170,000 100,000 70,000
6 Post-closing trial balance at 30 April 2012 $ 1 2 10 15 30 31 32 35 Share capital Retained profits Sundry creditors Loan from Finance Co. Bank of NZ Sundry debtors Inventories Delivery truck 150,400 30,000 100,000 80,000 360,400 _______ 360,400 $ 150,000 30,400 100,000 80,000
Carlson Ltd Balance sheet at 30 April 2012 Assets Current assets Bank of NZ Sundry debtors Inventories 150,400 30,000 100,000 280,400
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Noncurrent assets Delivery truck Liabilities and shareholders equity Current liabilities Sundry creditors Long-term liabilities Loan Shareholders equity Share capital Retained profits Total liabilities and shareholders equity 150,000 30,400 180,400 360,400 100,000 80,000 180,000 80,000 360,400
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