A new business graduate with one subject of accounting prepared the financial statements below for Helens Dancing

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A new business graduate with one subject of accounting prepared the financial statements below for Helen’s Dancing School at the end of the first year of operations.

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Additional analysis revealed the following.

1. Dancing fees of $7500 (owed by customers) were unrecorded at 30 June.

2. Additional equipment of $10 500 purchased with a bank loan at the end of the month had not been recorded.

3. Supplies on hand at 30 June costing $10 600 were included in expenses.

4. Wages of $2500 were payable at 30 June.

Required

(a) Prepare a corrected income statement for the year ended 30 June 2019.

(b) Prepare a corrected balance sheet in narrative form as at 30 June 2019.

(c) Prepare a statement of changes in equity for the year ended 30 June 2019.

(d) Discuss the accounting assumptions that the graduate has breached.

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Financial Accounting

ISBN: 9780730363217

10th Edition

Authors: John Hoggett, John Medlin, Keryn Chalmers, Claire Beattie, Andreas Hellmann, Jodie Maxfield

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