Amanda Ltd started a corporate training firm on 1^st September 2021. During the period up to 30^th June 2022, the following transactions occurred:

For each of the following transactions calculate the effect on revenues and expenses (using accrual accounting) for the 10 months ending 30^th June 2022:

1. Amanda put $20,000 of her own money into the business
2. She borrowed $30,000 from the bank at 5 percent per annum for one year on 1^st September with interest to be paid at the end of each quarter. The first payment is, therefore, due on 30^th November 2021.
3. She has invoiced a total of $150,000 to customers for work performed and up to 30 June 2022, she had received $120,000 and expected the other $30,000 to be received in the financial year ending 30^th June 2023.
4. She bought a car on credit for the business at a cost of $70,000 on 1^st September 2021 that has an expected useful life of five years, with an expected residual value of $10,000. The car will be paid for on 1^st September 2022.
5. She paid herself $80,000 in wages for the year-end 30^th June 2022.
6. She paid $10,000 in advance in May 2022 for an advertisement that will appear in certain corporate journals in July 2022.
7. She received a total of $25,000 in invoices relating to rental and utility charges and has so far paid $20,000 towards them by the 30^th June 2022.

(c) Calculate the profit for the 10 months ending 30^th June 2022 using cash accounting, and show clear workings in the text box below.

(d) Calculate balance of total assets as at 30^th June 2022, and show clear workings, in the text box below. Assume accrual accounting was applied.

Answer rating: 100% (QA)

LIABILITIES EQUITY SL Date DESCRIPTION Land TOTAL ASSETS Accrued Expense Accounts Payable Bank Loan ... View the full answer