ABC Ltd imports designer spectacle frames and sclls them to optometrists. The assets, liabilities and shareholders'...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
ABC Ltd imports designer spectacle frames and sclls them to optometrists. The assets, liabilities and shareholders' equity balances of the business at 30 June 2016 are shown on the attached worksheet. (70 marks] The following information about ABC Ltd is available: The business has an accounting period of one year. It determines profit or loss for each year following proper accrual principles. The opening balance in the prepayment's column relates to 6 months insurance for the period July 2016 to December 2016. The balance in the accrual column relates to electricity owing for June 2016. ас On 1 January 2016 ABC Ltd borrowed $25 000 from Robin Banks and agreed to pay 12% interest per annum in arrears for 3 years. It is an interest only loan where the principal will be repaid in full at the end of the 3 years. The interest is paid on 30 June each year. The motor vehicle owned by the business on 30 June 2016 has an expected life of 4 years, and an expected residual value at the end of that time of $2 000. The company has 40 000 shares issued when the business began for $1 per share. O Time Remaining Show Han Here is a summary of the transactions that took place during the year ended 30 June 2017: In July 2016 the company delivered a special order to a customer. The special order had previously been paid for in May 2016 column. These special frames had cost ABC Ltd $1 000. Received 80% of the amounts owing from debtors. Purchased frames on credit for $ 35 000. see the opening balance in the uncarned revenue 3 4 Paid tax owing from the previous year and also paid dividends to shareholders that had been declared at the end of the previous year. Paid accrued expenses from previous year. On I January 2017 paid a reduced annual insurance premium $5 400 Credit sales of frames totalled $64 000, while cash sales totalled $5 000. (The frames sold during the year had cost the business $32 000). A second delivery vehicle was bought on 1 July 2016 for S 15 000 cash. It is expected to have a useful life of four years and a residual value of $3 000. Received $60 000 from debtors and paid creditors $40 000. During the year paid $8 200 cash for vehicle running expenses. Declared a dividend of 12.5 cents per share. Electricity bills for the first three quarters of the year were paid totalling $1 820. The manager has estimated that the bill for the last quarter will be $690, but as yet is has not been received. 10 11 12 13 The company expects to have to pay $7 000 tax on the profits for the year. 14 each are issued to shareholders based on the amount in retained profits. Interest on the loan is paid on 30 June 2017. A transfer of $5 000 to a general reserve is made and 20 000 bonus shares valued at $1 15 Prepare the general journal entries to record the transactions that occurred during the year and also record all the accrual accounting adjustments that are necessary to determine profit for the year ended 30 June 2017. [25 marks] ABC Ltd imports designer spectacle frames and sclls them to optometrists. The assets, liabilities and shareholders' equity balances of the business at 30 June 2016 are shown on the attached worksheet. (70 marks] The following information about ABC Ltd is available: The business has an accounting period of one year. It determines profit or loss for each year following proper accrual principles. The opening balance in the prepayment's column relates to 6 months insurance for the period July 2016 to December 2016. The balance in the accrual column relates to electricity owing for June 2016. ас On 1 January 2016 ABC Ltd borrowed $25 000 from Robin Banks and agreed to pay 12% interest per annum in arrears for 3 years. It is an interest only loan where the principal will be repaid in full at the end of the 3 years. The interest is paid on 30 June each year. The motor vehicle owned by the business on 30 June 2016 has an expected life of 4 years, and an expected residual value at the end of that time of $2 000. The company has 40 000 shares issued when the business began for $1 per share. O Time Remaining Show Han Here is a summary of the transactions that took place during the year ended 30 June 2017: In July 2016 the company delivered a special order to a customer. The special order had previously been paid for in May 2016 column. These special frames had cost ABC Ltd $1 000. Received 80% of the amounts owing from debtors. Purchased frames on credit for $ 35 000. see the opening balance in the uncarned revenue 3 4 Paid tax owing from the previous year and also paid dividends to shareholders that had been declared at the end of the previous year. Paid accrued expenses from previous year. On I January 2017 paid a reduced annual insurance premium $5 400 Credit sales of frames totalled $64 000, while cash sales totalled $5 000. (The frames sold during the year had cost the business $32 000). A second delivery vehicle was bought on 1 July 2016 for S 15 000 cash. It is expected to have a useful life of four years and a residual value of $3 000. Received $60 000 from debtors and paid creditors $40 000. During the year paid $8 200 cash for vehicle running expenses. Declared a dividend of 12.5 cents per share. Electricity bills for the first three quarters of the year were paid totalling $1 820. The manager has estimated that the bill for the last quarter will be $690, but as yet is has not been received. 10 11 12 13 The company expects to have to pay $7 000 tax on the profits for the year. 14 each are issued to shareholders based on the amount in retained profits. Interest on the loan is paid on 30 June 2017. A transfer of $5 000 to a general reserve is made and 20 000 bonus shares valued at $1 15 Prepare the general journal entries to record the transactions that occurred during the year and also record all the accrual accounting adjustments that are necessary to determine profit for the year ended 30 June 2017. [25 marks]
Expert Answer:
Answer rating: 100% (QA)
On 30June 2016 All Amounts 1 For Prepaid Insurance 5400 per annum 2700 for six months Insurance remained same Insurance Dr 2700 To Prepaid Insurance 2... View the full answer
Posted Date:
Students also viewed these accounting questions
-
The following budgeted information about Reeves Co. is available for September 2010: Sales for September ..................... $2,700,000 Gross profit on sales .................... 40% Decrease in...
-
The basic accounting period is one year and all organizations report on an annual basis. It is common for large companies to report on a semi-annual basis, and some even report monthly. Interim...
-
The basic accounting period is one year and all organizations report on an annual basis. It is common for large companies to report on a semi-annual basis, and some even report monthly. Interim...
-
For the manipulator shown, find the twist coordinates f; at zero con- figuration and 9st (0) using the product of exponentials approach. Use the base and tool frames shown. (b) (10 points) Find efi0i...
-
Sams Supply, Inc., uses a perpetual inventory system. Enter the following transaction into the accounting equation: In February, Sams sold $320,000 of merchandise on account with terms 3/10, n/30....
-
1. Consider the contents of this textbook as a template for CPIs database content. Draw an ERD and class diagram that represents the book and its key content elements. Which diagram is a more...
-
Stars Ltds account balances at 31 December 20x5 are as follows: Required 1 Prepare a profit and loss statement for the year ending 31 December 20x5. 2 Prepare a classified balance sheet as at 31...
-
Walter Industries has $5 billion in sales and $1.7 billion in fixed assets. Currently, the companys fixed assets are operating at 90% of capacity. a. What level of sales could Walter Industries have...
-
What is the measure of each exterior angle of a regular 30-gon? Type your answer... 0 1 point What is the sum of the measure of the interior angles of an octagon?
-
Excel worksheets to use for journal entries and t-accounts and also utilize Excel for trial balances and financial statements. Students are to complete journal entries for each month, including...
-
Partnership liabilities are allocated to the partners in a partnership and are included in a partners basis in his or her partnership interest. Increases in a partners share of liabilities are...
-
True or False. The Runge-Kutta method is stable.
-
Fill in the Blank. The Gaussian density function is a symmetric _____________ -shaped curve about the mean value.
-
An integration method in which the computation of \(x_{i+1}\) is based on the equilibrium equation at \(t_{i}\) is known as a. explicit method b. implicit method c. regular method
-
Fill in the Blanks. Numerical methods that require the use of a time step \((\Delta t)\) smaller than a critical value \(\left(\Delta t_{\text {cri }} ight)\) are said to be ______________ stable.
-
Enid operates an animal shelter as a sole proprietor which generates net revenue of $88,000. Enid has also made a self-employed health insurance payment of $6,000. What is Enids qualified business...
-
Question 26: What is the total Medicare tax rate for an employee who is subject to both standard Medicare tax and Additional Medicare tax? Answer: A. 2.35% B. 2.45% C. 6.2% D. 7.65%
-
Factor and simplify, if possible. Check your result using a graphing calculator. 3 cot 2 + 6 cot + 3
-
In the late 19th century, more than half of all Americans lived on farms. New farming techniques, based on science, were being developed through university research, but older generations of farmers...
-
Review the minutes of recent meetings by Bank of Japan officials. Summarize at least one recent meeting that was associated with possible or actual intervention to affect the yens value.
-
Why might the foreign exchange intervention strategies of the Bank of Japan be relevant to the U.S. government and to U.S.-based MNCs?
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App