Accounting Solutions 2
Transcript of Accounting Solutions 2
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Accounting - An introduction to principles and practice, 6E. Solutions to all Questions 9
Chapter 2 The Accounting Equation
Question 2.1
5000 = 0 + 5000
Question 2.2
1. 15000 = 0 + 15000
2. 25000 = 0 + 250003. 20000 = 5000 + 150004. 30000 = 7000 + 230005. 10000 = 3000 + 70006. 85000 = 15000 + 700007. 37000 = 0 + 370008. 38000 = 0 + 380009. 60000 = 10000 + 5000010.75000 = 25000 + 50000.
Question 2.3
1 July 2010 A Argenton commenced businessAssets = Liabilities + Owners Equity
Bank = 6000 Capital =31000
Motor Vehicle =25000
31000 = + 31000
4 July 2010 purchased inventory on creditAssets = Liabilities + Owners Equity
Bank 6000 Accounts Payable =3300 Capital 31000
Inventory =3300
Motor Vehicle 25000
34300 = 3300 + 31000
5 July 2010 paid cash for inventoryAssets = Liabilities + Owners Equity
Bank 6000 Accounts Payable 3300 Capital 31000
- 2200
=3800
Inventory 3300
+2200
=5500
Motor Vehicle 2500034300 = 3300 + 31000
6 July 2010 additional capital introducedAssets = Liabilities + Owners Equity
Bank 3800 Accounts Payable 3300 Capital 31000
+3000 +3000
=6800 +4500
Inventory 5500 =38500
Motor Vehicle 25000
Office Equipment =450041800 = 3300 + 38500
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Accounting - An introduction to principles and practice, 6E. Solutions to all Questions 10
Question 2.4
22 August 2010 P Dumont obtained a loanAssets = Liabilities + Owners Equity
Bank 3000 Accounts Payable 1500 Capital 48700
+10000 Loan from Bank =10000
=13000
Inventory 2200
Premises 4500060200 = 11500 + 48700
25 August 2010 paid accounts payableAssets = Liabilities + Owners Equity
Bank 13000 Accounts Payable 1500 Capital 48700
- 1500 - 1500
=11500 = 0
Inventory 2200 Loan from Bank 10000
Premises 45000
58700 = 10000 + 48700
26 August 2010 acquired inventory on credit and for cashAssets = Liabilities + Owners Equity
Bank 11500 Accounts Payable =3080 Capital 48700
- 1210 Loan from Bank 10000
=10290
Inventory 2200
+3080
+1210
=6490
Premises 4500061780 = 13080 + 48700
Question 2.5
1 September 2010 P Barrack commenced business with various assetsAssets = Liabilities + Owners Equity
Bank = 2000 Capital =46000
Inventory = 1000
Motor Vehicle = 8000
Premises =35000
46000 = 46000
3 September 2010 inventory purchased for cashAssets = Liabilities + Owners Equity
Bank 2000 Capital 46000
- 1012
=988
Inventory 1000
+1012
=2012
Motor Vehicle 8000Premises 35000
46000 = 46000
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Accounting - An introduction to principles and practice, 6E. Solutions to all Questions 12
Question 2.6
1 September 2010 commenced business with various assetsAssets = Liabilities + Owners Equity
Bank = 2000 dr
Capital =46000 cr
Inventory = 1000 dr
Motor Vehicles = 8000 dr
Premises =35000 dr
46000 = 46000
3 September 2010 inventory purchased for cashAssets = Liabilities + Owners Equity
Bank 2000 dr Capital 46000 cr - 1012 cr
=988 drInventory 1000 dr
+1012 dr
=2012 drMotor Vehicles 8000 drPremises 35000 dr
46000 = 46000
4 September 2010 bank granted a mortgageAssets = Liabilities + Owners Equity
Bank 988 dr Mortgage =15000 cr Capital 46000 cr
+15000 dr=15988 dr
Inventory 2012 drMotor Vehicles 8000 drPremises 35000 dr
61000 = 15000 + 46000
6 September 2010 machinery was purchased on creditAssets = Liabilities + Owners Equity
Bank 15988 dr Accounts Payable =8250 cr Capital 46000 cr
Inventory 2012 dr Mortgage 15000 crMotor Vehicles 8000 drPremises 35000 drMachinery =8250 d
r
69250 = 23250 + 46000
7 September 2010 inventory purchased on creditAssets = Liabilities + Owners Equity
Bank 15988 dr Accounts Payable 8250 cr Capital 46000 crInventory 2012 dr +1320 cr
+1320 dr =9570 cr
=3332 dr Mortgage 15000 crMotor Vehicles 8000 drPremises 35000 drMachinery 8250 dr
70570 = 24570 + 46000
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Accounting - An introduction to principles and practice, 6E. Solutions to all Questions 13
Question 2.6 finalised
10 September 2010 machinery was purchased for cashAssets = Liabilities + Owners Equity
Bank 15988 dr Accounts Payable 9570 cr Capital 46000 cr - 2530 cr Mortgage 15000 cr
=13458 drInventory 3332 dr
Motor Vehicles 8000 drPremises 35000 drMachinery 8250 dr
+2530 dr
=10780 dr
70570 = 24570 + 46000
13 September 2010 payment of an account payableAssets = Liabilities + Owners Equity
Bank 13458 dr Accounts Payable 9570 cr Capital 46000 cr - 8250 cr - 8250 dr
=5208 dr =1320 crInventory 3332 dr Mortgage 15000 crMotor Vehicles 8000 drPremises 35000 drMachinery 10780 dr
62320 = 16320 + 46000
Question 2.7
Account balances of Fred McKay as 31 March 2010Assets = Liabilities + Owners Equity
Current Assets Current Liabilities Capital 32000Bank 15000 Accounts Payable 8000Inventory 10000 Non-current LiabilitiesNon-current Assets Loan - J Flynn 35000Motor Vehicles 30000 Mortgage 50000Premises 65000Computers 5000
125000 = 93000 + 32000
Question 2.8
Account balances of Margaret Robertson as 31 March 2010Assets = Liabilities + Owners Equity
Current Assets Current Liabilities Capital 105000Cash at Bank 25000 Accounts Payable 35000Inventory 40000 Non-current LiabilitiesNon-current Assets Loan - A Pendix 100000Land & Buildings 120000 Mortgage - Union 45000Machinery 80000Office Equipment 20000
285000 = 180000 + 105000
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Question 2.9
Account Group Account Number
Assets 10 - 19(debit) Current Assets 10-14
Bank 10Cash on Hand 11Inventory 12Petty Cash 13
Non-current Assets 15-19Computers 15Land and Buildings 16Machinery 17Motor Vehicles 18
Liabilities 20 - 29(credit) Current Liabilities 20-24
Accounts Payable 20
Non-current Liabilities 25-29Loan from P Broker 25Mortgage on Land and 26
Buildings
Owners Equity 30 - 39(credit) Capital 30
Question 2.10
Account Group Account Number
Assets 10 - 19(debit) Current Assets 10 -14
Bank 10Inventory 11
Non-current Assets 15 - 19Premises 15Motor Vehicle 16Machinery 17Office Equipment 18Computers 19
Liabilities 20 - 29(credit) Current Liabilities 20 - 24
Accounts Payable 20
Non-current Liabilities 25 - 29Mortgage 25Loan from Bank 26
Owners Equity 30 - 39(credit) Capital 30
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Question 2.11
Balance Sheet of Fred McKayas at 31 March 2010
Current Assets Current LiabilitiesBank 15000 Accounts Payable 8000Inventory 10000 25000 Non-current LiabilitiesNon-current Assets Loan from J Flynn 35000Motor Vehicles 30000 Mortgage 50000 85000
Premises 65000 Total Liabilities 93000Computers 5000 100000 Owners Equity
Capital 32000
125000 125000
Question 2.12
Balance Sheet of Margaret Robertsonas at 31 March 2010
Current Assets Current LiabilitiesBank 25000 Accounts Payable 35000
Inventory 40000 65000 Non-current LiabilitiesNon-current Assets Loan from A Pendix 100000Land & Buildings 120000 Mortgage - Credit Union 45000 145000Machinery 80000 Total Liabilities 180000Office Equipment 20000 220000 Owners Equity
Capital 105000
285000 285000
Question 2.13
Balance Sheet ofA Argentonas at 6 July 2010
Current Assets Current LiabilitiesBank 6800 Accounts Payable 3300Inventory 5500 12300 Owners EquityNon-current Assets Capital 38500Motor Vehicles 25000Office Equipment 4500 29500
41800 41800
Question 2.14
Balance Sheet ofP Dumontas at 31 August 2010
Current Assets Current LiabilitiesBank 10290 Accounts Payable 3080Inventory 6490 16780 Non-current LiabilitiesNon-current Assets Loan - Bank 10000Premises 45000 Total Liabilities 13080
Owners EquityCapital 48700
61780 61780
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Question 2.15
Balance Sheet ofP Barrackas at 30 September 2010
Current Assets Current LiabilitiesBank 5208 Accounts Payable 1320Inventory 3332 8540 Non-current LiabilitiesNon-current Assets Mortgage 15000Motor Vehicles 8000 Total Liabilities 16320
Premises 35000 Owners EquityMachinery 10780 53780 Capital 46000
62320 62320Question 2.16
1 September 2010 commencement of business by K PullenAssets = Liabilities + Owners Equity
Bank =12000 dr Mortgage =7500 cr Capital =52000 cr
Inventory = 3000 dr
Building =37000 dr
Machinery = 7500 dr
59500 = 7500 + 52000
4 September 2010 purchased inventory for cashAssets = Liabilities + Owners Equity
Bank 12000 dr Mortgage 7500 cr Capital 52000 cr
- 2310 cr
=9690 dr
Inventory 3000 dr
+2310 dr
=5310 dr
Building 37000 dr
Machinery 7500 dr
59500 = 7500 + 52000
7 September 2010 additional cash and motor vehicle contributed by ownerAssets = Liabilities + Owners Equity
Bank 9690 dr Mortgage 7500 cr Capital 52000 cr
+7500 dr +7500 cr
=17190 dr +15000 cr
Inventory 5310 dr =74500 cr
Building 37000 dr
Machinery 7500 dr
Motor Vehicle =15000 dr82000 = 7500 + 74500
10 September 2010 inventory purchased on creditAssets = Liabilities + Owners Equity
Bank 17190 dr Accounts Payable =2915 cr Capital 74500 cr
Inventory 5310 dr Mortgage 7500 cr
+2915 dr
=8225 dr
Building 37000 dr
Machinery 7500 dr
Motor Vehicle 15000 dr84915 = 10415 + 74500
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Question 2.16 continued
13 September 2010 machinery bought for cashAssets = Liabilities + Owners Equity
Bank 17190 dr Accounts Payable 2915 cr Capital 74500 cr
- 4620 cr Mortgage 7500 cr
=12570 dr
Inventory 8225 dr
Building 37000 dr
Machinery 7500 dr
+4620 dr
=12120 dr
Motor Vehicle 15000 dr
84915 = 10415 + 74500
17 September 2010 loan from V AlanAssets = Liabilities + Owners Equity
Bank 12570 dr Accounts Payable 2915 cr Capital 74500 cr
+10000 dr Mortgage 7500 cr
=22570dr
Loan from V Alan =10000cr
Inventory 8225 dr
Building 37000 dr
Machinery 12120 dr
Motor Vehicle 15000 dr
94915 = 20415 + 74500
22 September 2010 machinery purchased on creditAssets = Liabilities + Owners Equity
Bank 22570 dr Accounts Payable 2915 cr Capital 74500 cr
Inventory 8225 dr +8800 cr
Building 37000 dr =11715 crMachinery 12120 dr Mortgage 7500 cr
+8800 dr Loan from V Alan 10000 cr
=20920 dr
Motor Vehicle 15000 dr
103715 = 29215 + 74500
23 September 2010 inventory purchased for cashAssets = Liabilities + Owners Equity
Bank 22570 dr Accounts Payable 11715 cr Capital 74500 cr
- 3960 cr Mortgage 7500 cr
=18610 dr Loan from V Alan 10000 crInventory 8225 dr
+3960 dr
=12185 dr
Building 37000 dr
Machinery 20920 dr
Motor Vehicle 15000 dr
103715 = 29215 + 74500
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Question 2.16 continued
26 September 2010 payment of account payableAssets = Liabilities + Owners Equity
Bank 18610 dr Accounts Payable 11715 cr Capital 74500 cr
- 2915 cr - 2915 dr
=15695 dr =8800 cr
Inventory 12185 dr Mortgage 7500 cr
Building 37000 dr Loan from V Alan 10000 cr
Machinery 20920 dr
Motor Vehicle 15000 dr
100800 = 26300 + 74500
27 September 2010 purchased inventory on creditAssets = Liabilities + Owners Equity
Bank 15695 dr Accounts Payable 8800 cr Capital 74500 cr
Inventory 12185 dr +4070 cr
+4070 dr =12870 cr
=16255 dr Mortgage 7500 cr
Building 37000 dr Loan from V Alan 10000 cr
Machinery 20920 drMotor Vehicle 15000 dr
104870 = 30370 + 74500
28 September 2010 paid account payableAssets = Liabilities + Owners Equity
Bank 15695 dr Accounts Payable 12870 cr Capital 74500 cr
- 8800 cr - 8800 dr
=6895 dr =4070 cr
Inventory 16255 dr Mortgage 7500 cr
Building 37000 dr Loan from V Alan 10000 cr
Machinery 20920 drMotor Vehicle 15000 dr
96070 = 21570 + 74500
Account Group Account Number
Assets 10 - 19[debit] Current Assets 10-14
Bank 10Inventory 11
Non-current Assets 15-19
Building 15Machinery 16Motor Vehicle 17
Liabilities 20 - 29[credit] Current Liabilities 20-24
Accounts Payable 20
Non-current Liabilities 25-29Mortgage 25Loan from V Alan 26
Owners Equity 30 - 39[credit] Capital 30
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Question 2.16 finalised
Balance Sheet of K Pullenas at 30 September 2010
Current Assets Current Liabilities
Bank 6895 Accounts Payable 4070Inventory 16255 23150 Non-current Liabilities
Non-current Assets Mortgage 7500Building 37000 Loan from V Alan 10000 17500
Machinery 20920 Total Liabilities 21570Motor Vehicle 15000 72920 Owners Equity
Capital 7450096070 96070
Question 2.17
Account Name Account Group Chart of Account Accounts Payable current liability (CL) 20 Accounts Receivable current asset (CA) 10Bank current asset (CA) 11Capital owners equity (OE) 30Commission Received revenue (R) 40
Cost of Goods Sold expense (E) 50Discount Allowed expense (E) 51Discount Received revenue (R) 41Interest expense (E) 52Inventory current asset (CA) 12Land and Buildings non-current asset (NCA) 15Loan (repayable in 10 months) current liability (CL) 21Machinery non-current asset (NCA) 16Mortgage on Land and Buildings non-current liability (NCL) 25Motor Vehicles non-current asset (NCA) 17Office Equipment non-current asset (NCA) 18Rent Received revenue (R) 42
Sales revenue (R) 43Telephone expense (E) 53Wages and Salaries expense (E) 54
Question 2.18
Account Name Account Group Chart of AccountStationery expense (E) 50Sales revenue (R) 40Salaries expense (E) 51Rent expense (E) 52Postage expense (E) 53Premises non-current asset (NCA) 15
Motor Vehicles non-current asset (NCA) 16Loan (repayable in 18 months) non-current liability (NCL) 25Inventory current asset (CA) 10Interest Received revenue (R) 41Equipment non-current asset (NCA) 17Electricity expense (E) 54Computers non-current asset (NCA) 18Commission expense (E) 55Cartage Outwards expense (E) 56Cartage Inwards expense (E) 57Capital owners equity (OE) 30Bank Overdraft current liability (CL) 20
Accounts Receivable current asset (CA) 11 Accounts Payable current liability (CL) 21
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Question 2.19
10 July 2010 cash sale of inventory (using perpetual inventory system)Assets[debit]
= Liabilities[credit]
+ Owners Equity [cr]+(Revenue [cr] - Expense [dr] )
Bank 6800 dr Accounts Payable 3300 cr Capital 38500 cr
+2475 dr Sales =2475 cr
=9275 dr -Cost of goods sold - 1210 dr
Inventory 5500 dr = Profit =1265 cr
- 1210 cr
=4290 dr
Motor Vehicle 25000 dr
Office Equipment 4500 dr
43065 = 3300 + 39765
15 July 2010 sold inventory on credit (using perpetual inventory system)Assets[debit]
= Liabilities[credit]
+ Owners Equity [cr]+(Revenue [cr] - Expense [dr] )
Bank 9275 dr Accounts Payable 3300 cr Capital 38500 cr
Accnt Receivable =3740 dr Sales 2475 cr
Inventory 4290 dr +3740 cr- 1540 cr =6215 cr
=2750 dr -Cost of goods sold -1210 dr
Motor Vehicle 25000 dr - 1540 dr
Office Equipment 4500 dr = -2750 dr
= Profit =3465 cr
45265 = 3300 + 41965
18 July 2010 payment of account payableAssets[debit]
= Liabilities[credit]
+ Owners Equity [cr]+(Revenue [cr] - Expense [dr] )
Bank 9275 dr Accounts Payable 3300 cr Capital 38500 cr- 3300 cr - 3300 dr Sales 6215 cr
=5975 dr = 0 -Cost of goods sold -2750 dr
Accnt Receivable 3740dr = Profit 3465 crInventory 2750 dr
Motor Vehicle 25000 dr
Office Equipment 4500 dr
41965 = 0 + 41965
21 July 2010 purchased inventory on creditand for cash (using perpetual inventory system)Assets
[debit]
= Liabilities
[credit]
+ Owners Equity [cr]+
(Revenue [cr] - Expense [dr] )Bank 5975 dr Accounts Payable =2860 cr Capital 38500 cr
- 1595 cr Sales 6215 cr
4380 dr -Cost of goods sold -2750 dr
Accnt Receivable 3740dr = Profit 3465 cr
Inventory 2750 dr
+2860 dr
+1595 dr
7205 dr
Motor Vehicle 25000 dr
Office Equipment 4500 dr
44825 = 2860 + 41965
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Question 2.19 finalised
25 July 2010 payment of expenses and purchase of machinery for cashAssets[debit]
= Liabilities[credit]
+ Owners Equity [cr]+(Revenue [cr] - Expense [dr] )
Bank 4380 dr Accounts Payable 2860 cr Capital 38500 cr
- 900 cr Sales 6215 cr
- 110 cr -Cost of goods sold -2750 dr
- 1540 cr Wages = - 900 dr
=1830 dr Electricity = - 110 dr Accnt Receivable 3740dr = -3760 dr
Inventory 7205 dr = Profit =2455 cr
Motor Vehicle 25000 dr
Office Equipment 4500 dr
Machinery =1540 dr
43815 = 2860 + 40955
29 July 2010 receipt from account receivable and payment to account payableAssets[debit]
= Liabilities[credit]
+ Owners Equity [cr]+(Revenue [cr] - Expense [dr] )
Bank 1830 dr Account Payable 2860cr Capital 38500 cr+3740 dr - 2860 dr Sales 6215 cr
- 2860 cr = 0 -Cost of goods sold -2750 dr
=2710 dr Wages -900 dr
Accnt Receivable 3740dr Electricity -110 dr
- 3740 cr -3760 dr
= 0 = Profit 2455 cr
Inventory 7205 dr
Motor Vehicle 25000 dr
Office Equipment 4500 dr
Machinery 1540 dr
40955 = 0 + 40955
Balance Sheet ofA Argentonas at 31 July 2010
Current Assets Owners EquityBank 2710 Capital 38500Inventory 7205 9915 Add Profit 2455 40955
Non-current AssetsMotor Vehicles 25000Office Equipment 4500Machinery 1540 31040
40955 40955Question 2.20
Balance Sheet of G Cooranbongas at 31 March 2010
Current Assets Current LiabilitiesBank 2500 Accounts Payable 900 Accounts Receivable 1800 Non-current LiabilitiesInventory 1000 5300 Loan - Bank 5000
Non-current Assets Total Liabilities 5900Office Equipment 3500 Owners Equity
Computers 6000 9500 Capital 7000Add Profit 1900 8900
14800 14800
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Question 2.21
2 January 2010 D Brad commenced business
Assets[debit]
= Liabilities[credit]
+ Owners Equity [cr]+(Revenue [cr] - Expense [dr] )
Bank = 7000 dr Capital =19100crEquipment =12100 dr
19100 = 191004 January 2010 purchased machinery and inventory for cash
Assets[debit]
= Liabilities[credit]
+ Owners Equity [cr]+(Revenue [cr] - Expense [dr] )
Bank 7000 dr Capital 19100 cr
- 2090 cr
- 2255 cr
=2655 dr
Inventory =2255 dr
Equipment 12100 dr
Machinery =2090 dr
19100 = 19100
7 January 2010 sold inventory on credit (using perpetual inventory system)Assets[debit]
= Liabilities[credit]
+ Owners Equity [cr]+(Revenue [cr] - Expense [dr] )
Bank 2655 dr Capital 19100 cr
Accnt Receivable =4070 dr Sales = 4070 cr
Inventory 2255 dr -Cost of goods sold = - 1980 dr
- 1980 cr = Profit =2090 cr
=275 dr
Equipment 12100 dr
Machinery 2090 dr
21190 = 21190
9 January 2010 additional capitalAssets[debit]
= Liabilities[credit]
+ Owners Equity [cr]+(Revenue [cr] - Expense [dr] )
Bank 2655 dr Capital 19100 cr
+2000 dr +2000 cr
=4655 dr +13860 cr
Accnt Receivable 4070dr =34960 cr
Inventory 275 dr Sales 4070 cr
Equipment 12100 dr -Cost of goods sold -1980 dr
Machinery 2090 dr = Profit 2090 cr
Motor Vehicle =13860dr
37050 = 3705012 January 2010 loan from A Relo
Assets[debit]
= Liabilities[credit]
+ Owners Equity [cr]+(Revenue [cr] - Expense [dr] )
Bank 4655 dr Loan from A Relo =7500 cr Capital 34960 cr
+7500 dr Sales 4070 cr
=12155 dr -Cost of goods sold -1980 dr
Accnt Receivable 4070dr = Profit 2090 cr
Inventory 275 dr
Equipment 12100 dr
Machinery 2090 drMotor Vehicle 13860 dr
44550 = 7500 + 37050
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Question 2.21 continued
15 January 2010 equipment and inventory purchased on creditAssets[debit]
= Liabilities[credit]
+ Owners Equity [cr]+(Revenue [cr] - Expense [dr] )
Bank 12155 dr Accounts Payable +6050 cr Capital 34960 cr Accnt Receivable 4070dr +2365 cr Sales 4070 cr
Inventory 275 dr =8415 cr -Cost of goods sold -1980 dr
+2365 dr Loan from A Relo 7500 cr = Profit 2090 cr
=2640 dr
Equipment 12100 dr
+6050 dr
=18150 dr
Machinery 2090 dr
Motor Vehicle 13860 dr
52965 = 15915 + 37050
17 January 2010 cash saleAssets[debit]
= Liabilities[credit]
+ Owners Equity [cr]+(Revenue [cr] - Expense [dr] )
Bank 12155 dr Accounts Payable 8415 cr Capital 34960 cr+3575 dr Loan from A Relo 7500 cr Sales 4070 cr
=15730 dr +3575 cr
Accnt Receivable 4070dr =7645 cr
Inventory 2640 dr -Cost of goods sold -1980 dr
- 1925 cr - 1925 dr
=715 dr = - 3905 dr
Equipment 18150 dr = Profit =3740 crMachinery 2090 dr
Motor Vehicle 13860 dr
54615 = 15915 + 38700
20 January 2010 sale on creditAssets[debit]
= Liabilities[credit]
+ Owners Equity [cr]+(Revenue [cr] - Expense [dr] )
Bank 15730 dr Accounts Payable 8415 cr Capital 34960 cr Accnt Receivable 4070dr Loan from A Relo 7500 cr Sales 7645 cr
+968 dr +968 cr
=5038 dr =8613 cr
Inventory 715 dr -Cost of goods sold -3905 dr
- 385 cr - 385 dr
=330 dr = - 4290 drEquipment 18150 dr = Profit =4323 crMachinery 2090 dr
Motor Vehicle 13860 dr
55198 = 15915 + 39283
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Question 2.21 finalised23 January 2010 asset purchased for cash
Assets[debit]
= Liabilities[credit]
+ Owners Equity [cr]+(Revenue [cr] - Expense [dr] )
Bank 15730 dr Accounts Payable 8415 cr Capital 34960 cr
- 3850 cr Loan from A Relo 7500 cr Sales 8613 cr
=11880 dr -Cost of goods sold - 4290 dr
Accnt Receivable 5038dr = Profit 4323 cr
Inventory 330 drEquipment 18150 dr
Machinery 2090 dr
+3850 dr
=5940 dr
Motor Vehicle 13860 dr
55198 = 15915 + 3928325 January 2010 payment of account payable
Assets[debit]
= Liabilities[credit]
+ Owners Equity [cr]+(Revenue [cr] - Expense [dr] )
Bank 11880 dr Accounts Payable 8415 cr Capital 34960 cr- 6050 cr - 6050 dr Sales 8613 cr
=5830 dr =2365 cr -Cost of goods sold - 4290 dr
Accnt Receivable 5038dr Loan from A Relo 7500 cr = Profit 4323 crInventory 330 dr
Equipment 18150 dr
Machinery 5940 dr
Motor Vehicle 13860 dr
49148 = 9865 + 3928328 January 2010 payment to account payable and receipt from account receivable
Assets
[debit]
= Liabilities
[credit]
+ Owners Equity [cr]+
(Revenue [cr] - Expense [dr] )Bank 5830 dr Accounts Payable 2365 cr Capital 34960 cr
- 2365 cr - 2365 dr Sales 8613 cr
+4070 dr = 0 -Cost of goods sold - 4290 dr
=7535 dr Loan from A Relo 7500 cr = Profit 4323 cr Accnt Receivable 5038dr
- 4070 cr
=968 dr
Inventory 330 dr
Equipment 18150 dr
Machinery 5940 dr
Motor Vehicle 13860 dr
46783 = 7500 + 39283
Balance Sheet of D Bradas at 31 January 2010
Current Assets Non-current LiabilitiesBank 7535 Loan from A Relo 7500 Accounts Receivable 968 Owners EquityInventory 330 8833 Capital 34960
Non-current Assets Add Profit 4323 392
Equipment 18150
Machinery 5940Motor Vehicle 13860 37950
46783 46783
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Question 2.22
Account Group Account Number
Assets 10 - 19[debit] Current Assets 10-14
Petty Cash 10 Accounts Receivable 11Inventory 12Non-current Assets 15-19Office Equipment 15Premises 16Investment in Shares 17Motor Vehicles 18
Liabilities 20 - 29[credit] Current Liabilities 20-24
Bank Overdraft 20 Accounts Payable 21
Non-current Liabilities 25-29Long Term Loan 25
Owners Equity 30 - 39[credit] Capital 30Revenue 40 - 49
[credit] Sales 40Rent Received 41Dividends Received 42
Expense 50 - 69[debit] Cartage Inwards 51
Electricity 52Import Duty 53Interest 54
Salaries 55Telephone 56Stationery 57Vehicle Expenses 58Bad Debt Expense 59 Advertising 6
Question 2.23
Balance Sheet of S T Davidas at 30 April 2010
Current Assets Current Liabilities
Accounts Receivable 3300 Loan from Bank 4000Bank 1500 Accounts Payable 330 4330
Inventory 880 5680 Owners Equity
Non-current Assets Capital 34700Office Furniture 6600 Add Profit 4050 38750
Computers 8800Motor Vehicles 22000 37400
43080 43080
Revenue: Sales 11000 Less Expenses: Salaries 2000 + Cost of goods sold 3300 + Rent1100 + Vehicle expenses 550 = 6950. Revenue - expenses = 11000 - 6950 = 4050 profit
Current assets 5680 + non-current assets 37400 - current liabilities 4330 = owners equity38750.Owners equity 38750 - profit 4050 = capital before the profit 34700
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Accounting - An introduction to principles and practice, 6E. Solutions to all Questions 27
Question 2.26
BusinessTransaction
AccountingEquationElement
Account Name An increase ordecrease of the
account
Account isdebit orcredit
Paid wagesexpense Wages increase debitasset Bank decrease credit
Purchased inventory on creditasset Inventory increase debitliability Accounts Payable increase credit
Sale of inventory on creditasset Accounts Receivable increase debitrevenue Sales increase creditexpense Cost of Goods Sold increase debitasset Inventory decrease credit
Received cash from a customer for inventory sold earlier in the monthasset Bank increase debitasset Accounts Receivable decrease credit
Purchased office equipment for cashasset Office Equipment increase debitasset Bank decrease credit
Question 2.27
BusinessTransaction
AccountingEquationElement
Account Name An increase ordecrease of the
account
Account isdebit orcredit
Rent receivedasset Bank increase debitrevenue Rent Received increase credit
Sale of inventory for cashasset Bank increase debitrevenue Sales increase creditexpense Cost of Goods Sold increase debitasset Inventory decrease credit
Purchased inventory on creditasset Inventory increase debitliability Accounts Payable increase credit
Paid supplier for inventory purchased on credit last month
liability Accounts Payable decrease debitasset Bank decrease credit
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8/2/2019 Accounting Solutions 2
20/21
Accounting - An introduction to principles and practice, 6E. Solutions to all Questions 28
Question 2.28
BusinessTransaction
AccountingEquationElement
Account Name An increase ordecrease of the
account
Account isdebit orcredit
Commenced business with cash and motor vehicleasset Bank increase debitasset Motor Vehicle increase debitowners equity Capital increase credit
Purchased inventory for cashasset Inventory increase debitasset Bank decrease credit
Sale of inventory on creditasset Accounts Receivable increase debitrevenue Sales increase creditexpense Cost of Goods Sold increase debitasset Inventory decrease credit
Purchase of machinery on creditasset Machinery increase debit
liability Accounts Payable increase creditSold inventory for cashasset Bank increase debitrevenue Sales increase creditexpense Cost of Goods Sold increase debitasset Inventory decrease credit
Purchased stationery on creditexpense Stationery increase debitliability Accounts Payable increase credit
Paid salariesexpense Salaries increase debit
asset Bank decrease creditObtained a mortgage from the bank
asset Bank increase debitliability Mortgage increase credit
Paid cash for equipmentasset Equipment increase debitasset Bank decrease credit
Paid the supplier of stationery, purchased earlier on creditliability Accounts Payable decrease debitasset Bank decrease credit
Rent receivedasset Bank increase debitrevenue Rent Received increase credit
Received cash from customers for inventory, sold earlier on creditasset Bank increase debitasset Accounts Receivable decrease credit
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8/2/2019 Accounting Solutions 2
21/21
Accounting - An introduction to principles and practice, 6E. Solutions to all Questions 29
Question 2.29
BusinessTransaction
AccountingEquationElement
Account Name An increase ordecrease of the
account
Account isdebit orcredit
Purchased inventory on creditasset Inventor increase debitliabilit Accounts Pa able increase credit
Paid cash for motor vehicleasset Motor Vehicle increase debitasset Bank decrease credit
Paid rentex ense Rent increase debitasset Bank decrease credit
Obtained a loan from the credit unionasset Bank increase debitliabilit Loan from Credit Union increase credit
Cash sale of inventoryasset Bank increase debitrevenue Sales increase credit
ex ense Cost of Goods Sold increase debitasset Inventor decrease credit
Additional computer and machinery introduced by the ownerasset Com uter increase debitasset Machiner increase debitowners e uit Ca ital increase credit
Paid the supplier of inventory purchased earlier, on creditliabilit Accounts Pa able decrease debitasset Bank decrease credit
Sold inventory on creditasset Accounts Receivable increase debitrevenue Sales increase creditex ense Cost of Goods Sold increase debitasset Inventor decrease credit
Paid cash for advertisingex ense Advertisin increase debitasset Bank decrease credit
Cash received from customer who had been sold inventory on creditasset Bank increase debitasset Accounts Receivable decrease credit
Paid cash for office equipmentasset Office E ui ment increase debitasset Bank decrease credit
Commission receivedasset Bank increase debitrevenue Commission Received increase credit