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business
accounting 28th edition
Accounting 10th Edition John Hoggett, John Medlin, Keryn Chalmers, Beattie Claire, Hellmann Andreas, Maxfield Jodie - Solutions
Peter’s Personal Training Service had been in business for several years. In June 2019, as a result of a dispute with the owner, the accountant of the business disappeared and took all the records with her.You have been hired to reconstruct the accounting records, and with this in mind, you
In December 2019, Mike Mills opened a miniature golf course to cater for the summer holiday tourists and completed the transactions below during its first month of operations. For the sake of simplicity, GST is ignored.Required(a) Prepare general journal entries to record the December
In September 2019, Niem Duong opened a car hire business. The following transactions occurred during the first month of the business (ignore GST).Required(a) Journalize the above transactions.(b) Post the entries from the general journal to running balance general ledger accounts and enter the
Your first assignment on your new job was to determine why the 31 December 2018 trial balance did not balance. In your review of the records you uncovered a number of errors described below.1. The Sundry Expense account with a balance of $245 was omitted from the trial balance.2. A payment of $890
‘Why would we bother classifying assets in order of their liquidity on a balance sheet? After all, the value placed on assets is not a true reflection of how much we could sell them for.’ Discuss.
At the end of the first year of operations, Arch Etec, owner of Architect Designs, engaged you to prepare yearly financial statements for the year ended 30 June 2019, on both the cash basis and the accrual basis. The following data are a summary of selected transactions that occurred during the
Victoria Holmes registered as a financial adviser several years ago. An income statement for the current period, prepared using cash accounting, is presented below. GST is ignored.Additional data 1. Fees for advice given for the year ended 30 June 2019 for $8000 were collected in the current year
Listed below are ledger accounts that appear in the adjusted trial balance columns of a worksheet.Complete the tabulation shown below by entering a tick in the appropriate worksheet column where the amount in each account would be shown. Ignore GST. 1. Cash at Bank 2. Wages Expense 3. Building 4.
Trev’s Gardening Services purchased a trailer on 1 July 2019 for $26 200. It was estimated to have a useful life of 5 years and a residual value at the end of that time of $2800.Required(a) What is the depreciation expense for the year ended 30 June 2020?(b) What is the balance of the Accumulated
Investment Guru provides investment advice to customers for fees. On 30 June 2019, it completed its first year of operations. Some of the ledger account balances of the business, before any yearend adjustments, are given below.No adjusting entries have been made to these accounts at any time during
Monthly Foodies’ Magazine’s ledger includes the following accounts: Subscription Revenue, Unearned Subscriptions Revenue, Prepaid Insurance, Insurance Expense, Prepaid Rent and Rent Expense.The following transactions relating to subscriptions, insurance and rent occurred on the dates indicated.
The draft accounts for the year ended 30 June 2019 and a balance sheet as at that date for S. Steiner are submitted to you. Towards the end of the financial year her accountant resigned and she completed the records herself. She thinks that errors have occurred and asks for your help. An
JetSki Hire runs a business on the Murray River hiring out jet skis to holiday makers, tour operators and for corporate training sessions. The unadjusted trial balance of JetSki Hire is shown below (ignore GST).The following additional information is available at the end of June.1. Repairs on one
Tania Angus established Angus’s Phone App Productions in 2018 and kept her accounting records on a cash basis. During 2018, Tania decided to switch her accounting to the accrual basis and has asked you to help her convert the 2018 and 2019 financial statements to an accrual basis. Your analysis
Miranda’s Motor Mechanics analysed the accounting records and other data for the business. The following information is made available for the year ended 30 June 2019.1. Salaries and wages owing to employees at the end of the financial year amounted to $2480.2. Included in the Prepaid Rent
The unadjusted trial balance of the general ledger of Antonio’s Small Appliance Repair Service on 30 June 2019 is presented below (ignore GST).Additional data for adjustment purposes 1. Supplies on 30 June 2019 were:i. advertising supplies (originally debited to Advertising Expense), $6900 ii.
Gavin’s Gardening Equipment Hire’s unadjusted trial balance of the business appears as shown below. Ignore GST.Additional information 1. Expired insurance amounts to $750.2. June electricity costs of $330 have not been paid or recorded. No tax invoice has been received.3. Depreciation on the
The unadjusted trial balance of Helena’s Hire Cars is shown below (ignore GST).Additional information 1. Petrol purchased on credit for $680 and used during the last week in June has not been paid for or recorded.2. A physical count showed office supplies totalling $340 were still on hand at 30
Lana Priest set up a home sewing business on 1 July 2019. Usually, Lana collects $20 per hour for sewing on the completion of each day’s work and pays for the maintenance of her machine with cash.Lana did an accounting subject at secondary school and so has kept her own accrual‐based accounting
Craig’s Car Detailing Service had the following accounts and account balances in the adjusted trial balance columns of its worksheet for the year ended 30 June 2019.Required(a) Record the required closing entries for Craig’s Car Detailing Service. Craig Fraser, Capital Craig Fraser, Drawings
The accounts below are taken from the ledger of Bartel Music Consulting on 30 June 2019, the end of the current financial year.Required(a) Record the closing entries that affected the accounts.(b) Prepare a statement of changes in equity as at 30 June. G. Bartel, Capital G. Bartel, Drawings 30/6 21
The following unadjusted trial balance was taken from the ledger of Miranda’s Management Services on 30 June 2019.Required(a) Prepare a 10‐column worksheet using the following additional information on 30 June 2019.i. Accrued wages, $18 000 iii. Depreciation on equipment, $60 000 ii. Expired
The adjusted trial balance columns in the worksheet of Elliot Painting Services are as follows.Required(a) Complete the worksheet.(b) Prepare the closing entries necessary at 30 June 2019, assuming that this date is the end of the entity’s accounting period. ELLIOT PAINTING SERVICES Worksheet
Michael Rau founded Michael’s Fishing Supplies on 1 July 2019. The adjusted trial balance at 30 June 2020 (the end of the financial year) is shown below.Required(a) Prepare closing entries to be made on 30 June 2020.(b) Prepare a post‐closing trial balance as at 30 June 2020. Account Cash at
You are provided with the worksheet for Norman Pty Ltd for the year ended 30 June 2019. The adjustments have already been made and the worksheet begins with the adjusted trial balance.Assume all insurance relates to the factory. Closing inventory balances at 30 June 2019 were$108 000 for finished
The unadjusted trial balance of Innovative Computers Pty Ltd on 30 June 2019 is presented below.The following additional information is available.1. The inventories as of 30 June 2019 were as follows2. The Machinery and Equipment account comprises $250 000 of factory machinery and the balance in
You are provided with the cost of goods manufactured statement and income statement for Prider Manufacturers Ltd.Required(a) Prepare the closing entries for Prider Manufacturers Ltd. Direct materials: Beginning raw materials Purchases Freight inwards Ending raw materials Direct materials used
The listing of the ledger accounts (unadjusted) of Smart Manufacturing Systems Pty Ltd at 30 June 2019 is provided. All ledger balances are normal balances.Additional information relating to the company is as follows.1. The inventories as of 30 June 2019 were as follows.2. On 1 January 2019, the
Basic Chemicals Ltd produces a highly flammable chemical product. The company experienced a flood on 1 April 2019 that destroyed its entire work in process inventory but did not affect the raw materials or finished goods inventories because they were located elsewhere. The insurance company wants
Moore Manufacturing Pty Ltd makes refrigerators and is trying to determine the cost of its ending work in process. The accountant has put together the following data for the year ended 30 June 2019.Each refrigerator uses $300 of direct materials, $60 of direct labour and 2.4 machine hours.Direct
Macquarie Manufacturing Ltd prepared the following planned production data for the forthcoming year ending 30 June 2019.Required(a) Prepare a table showing the predetermined factory overhead rate based on each of the following:direct materials cost, direct labour cost, direct labour hours, machine
Beautiful Bottles Pty Ltd, bottle manufacturer for the food industry, has just installed a job order costing system. The company uses machine hours to apply its overhead to work in process. On 1 May 2019, management estimated that the company would incur $680 000 in manufacturing overhead costs and
Green Consultants Pty Ltd specialise in consulting on landscape design. The company developed a predetermined charge-out rate based on hours for each of its consultants on 1 July 2019 to assign the cost of labour directly associated with each client job for the coming year. The company employs four
Fine Furniture Ltd had a balance in its Work in Process Inventory account on 1 October 2019 of $13 600 made up of two jobs: Job 730, $6400; and Job 731, $7200. At the end of October, costs assigned to production summarised by the source documents are presented below.Factory overhead is applied to
Refer to the latest financial report of JB Hi-Fi Limited on its website, www.jbhifi.com.au, and answer the following questions.1. Is it likely that JB Hi-Fi Limited would have to confront such questions as to how to design a job cost order or a cost of production report? Explain your conclusion.2.
Imelda Instruments Ltd manufactures two products: missile range instruments and space pressure gauges. During January, 53 range instruments and 360 pressure gauges were produced, and overhead costs of $81 480 were incurred. An analysis of overhead costs reveals the following activities.Required(a)
Swiss Chocolates Ltd produces blocks of chocolate. Raw materials in the form of cocoa solids, milk and sugar are added at the beginning of the process, flavouring, fruit and nuts are added half-way through the process and a cardboard box is added at the end. The conversion costs (direct labour and
Eatern and Sons Ltd accounts for its manufacturing costs using a job order costing system and has provided the following production data during June 2019.• Job Z241 was in process as of 1 June with a cost of $22 000.• The purchases of raw materials on credit during the month amounted to $72
Abbott Ltd produces a chemical used to clean showers in a single process in the Production Department. Raw materials in the form of chemicals are added at the beginning of the process, and a litre container is added at the end. The conversion costs (direct labour and factory overhead)are incurred
The April 2019 transactions of Jackson Productions Ltd, which uses a job order costing system, are shown below. (Ignore GST.)1. Raw materials purchased, $342 000.2. Raw materials issued to production, $320 000 direct and $42 000 indirect.3. Factory payroll included $498 000 of direct labour and $96
Powerhouse Ltd purchased machinery on 2 January 2019, at a cost of $800 000. The machinery is depreciated using the straight‐line method over a useful life of 8 years with a residual value of $80 000.On 3 January 2022, an overhaul of the machinery was made at a cost of $112 000. Because of this
The purchases and sales of Big Flower Pty Ltd of one brand of lawn fertiliser for the year ended 31 December 2019 are contained in the schedule below.The selling price up to 30 June was $12 per unit but was raised to $14 for the rest of the year.Ignore GST.Required(a) Prepare the income statement
In groups of four or five, consider the following information.On 1 July 2019, Stevenson Pty Ltd, a proprietary company with three shareholders, acquired some property by issuing 100 000 shares to the owner. Prior to the acquisition, the property had been advertised for sale at $350 000. This
Part A Branxton Ltd’s inventory on 1 April 2019 had a cost of $100 000 and a retail value of $170 000.During April, the company’s net purchases cost $216 000 and had a net retail value of $324 000.Net sales for April totalled $390 000. Ignore GST.Required(a) Calculate estimated cost of
Toowoomba Irrigation Ltd began operations in the south‐east Queensland region in July 2015.During the annual audit for the year ended 30 June 2020, it was discovered that errors had been made in the annual physical stocktake. Further investigation revealed the following details for the years
Bristols Bicycles maintains inventory records under the perpetual inventory system. At 30 June 2019, the inventory balance determined by the system showed a value of $300 000. However, on conducting a physical stocktake, ending inventory was calculated as being only $260 000. An investigation
Terrific Town Houses Ltd is a large company registered in South Australia for the purpose of constructing blocks of home units and town houses. The company conducts its activities in all states. The managing director, Richard Townsend, who is keen to show favorable profit figures, especially profit
What items must be included in an entity’s annual financial report?
The financial statements for the business of Jet’s Ski Equipment are shown below.Additional information 1. All purchases and sales of inventories are on credit.2. On 1 July 2019, J. Waters injected a further capital contribution of $21 000 cash into the business.3. During the year, store
Some of the most recent financial statements for Hyland Pty Ltd are shown below.Additional information 1. All purchases and sales of inventories are on credit.2. On 1 July 2020, the shareholders injected a further capital contribution of $28 000 cash into the business.3. During the year, sales
The statement of cash flows for Cash4Cars Ltd follows. Ignore GST.Required(a) Explain the information that would be presented in Note 29 of Cash4Cars Ltd’s financial statements.(b) Explain the information that would be presented in Note 9 of Cash4Cars Ltd’s financial statements.(c) Discuss how
The comparative statements of financial position of Cresta Ltd as at 30 June 2019 and 2020, and the income statement and statement of changes in equity for the year ended 30 June 2020 are shown below.Additional information 1. Other expenses include $66 000 depreciation expense on machinery and
Below are the comparative statements of financial position of Lithium Ltd.Additional information 1. Income statement details were: sales revenue $750 000; cost of sales $603 000; expenses $116 360 (excludes depreciation and carrying amount of vehicle sold); bad debts expense $14 440; and tax
Karen Broderick commenced business on 1 July 2018. On 30 June 2019, she found that she had written off debts amounting to $1875. In addition, she found it necessary to create an allowance for doubtful debts of $3030. During the year to 30 June 2020, debts totalling $2400 proved to be bad and were
Comparative statements of financial position as at 31 December 2020 and 2019 and the income statement for 2020 for W. Yu are set out below.No plant and equipment was sold during the year. W. Yu withdrew $30 000 in cash during the year.Required(a) Prepare a statement of cash flows for the year ended
The following comparative statements of financial position and income statement are for the business of Bargains Galore Pty Ltd.Additional information 1. All sales and purchases of inventory are on credit.2. Income tax is paid in one instalment during the year.3. A dividend had been paid to
The financial statements for the business of Trinh’s Nail Supplies for the past two years are presented below.Additional information 1. All purchases and sales of inventories are on credit. All purchases of office supplies are for cash.2. The bank overdraft is considered to be part of the
The comparative statements of financial position of Hutt Electrical as at 30 June 2019 and 2020 and the income statement for the year ended 30 June 2020 are shown below.Additional information 1. Other expenses include $52 500 depreciation expense.2. All sales and purchases of inventory are on
Kim Khan has been in business as a sole trader for the past 5 years. The comparative statements of financial position for the years 2019 and 2020 and a summarized income statement for the year ended 30 June 2020 are shown below.Additional information 1. Kim had contributed capital during the year
Read the below article and answer the questions that follow.Dick Smith: Former director ‘wasn’t concerned’ by ballooning inventory Failed retailer Dick Smith had too much inventory, including a 10‐year supply of self‐branded batteries, a court has heard, as executives were questioned by
Accounting provides much information to help managers make economic decisions in their various workplaces.Required(a) List examples of economic decisions that the following people would need to make with the use of accounting information:i. a marketing managerii. a production manageriii. the chief
Equity balances for Sen Widyaya appearing in the balance sheets of Widyaya’s Window Washing Services as at 30 June 2019, 2018 and 2017 are set out below.During 2017–2018, Sen withdrew $25 000 for personal use and also contributed additional capital of $8000. During 2018–2019, he withdrew $10
Toby and Talea McKellar are the joint owners of Beaut Beach Caravan Park, which is near a swimming beach popular during the summer months. The park provides not only camping facilities for caravans and tents but also up-market cabins with kitchenettes and ensuites. For the year ended 30 June 2019,
Financial data for Safety Hire as of 30 June 2019 is shown below.Required(a) Prepare an income statement for the month of June and a balance sheet in account format for Safety Hire as at 30 June 2019.(b) Discuss if, and how, the financial reports that you have prepared would change if you were
During October 2019, Cleo organised a new business, Cleo’s Cafe. After each October transaction, Cleo prepared a balance sheet, as shown below.Required(a) Describe the nature of each of the four transactions that took place during October.(b) Comment on the type of financial information conveyed
Dawson Industries began operations early in January 2020. On 31 December 2020, records showed the following asset, liability, equity, income and expense amounts.Required(a) Prepare an income statement for Dawson Industries for the year ended 31 December 2020.(b) Prepare a balance sheet as at 31
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.Additional analysis revealed the following.1. Dancing fees of $7500 (owed by customers) were unrecorded at 30 June.2. Additional
The Marketing Store was established as a sole trader business, specialising in providing marketing services, on 1 January 2019. The owner, Jenny Smart, contributed $100 000 in cash to the business and did not withdraw funds for the year.For the year ended 31 December 2019, the following events
Financial balances for the car hire business of John’s Limos on 31 March 2019 are provided below in a table in accounting equation form similar to the chapter illustrations.During April, the business of John’s Limos entered into the following transactions.1. Collected $8000 of the accounts
Financial balances for Ho Ming Wee, Solicitor, on 30 June 2019 are given below in a table in accounting equation form similar to the chapter illustrations.During the early part of July, the business entered into the following transactions.1. Paid $2360 on accounts payable.2. Collected $6400 of the
Emma Lu obtained registration to practise as a naturopath, and spent the month of July 2019 setting up her business — E. Lu, Naturopath.Emma prepared a new balance sheet after each transaction which occurred. During July, the following balance sheets were prepared.Required(a) Describe each of the
Tran’s Clothing Alterations began operations on 1 August 2019 and completed the following transactions during the first month.1. Tran deposited $18 000 of her personal funds in a current account at a bank opened in the name of the business.2. Sewing equipment was purchased at a cost of $9000, of
Baker’s Bread Shop was established on 1 April 2019 with an initial investment of $100 000 by the owner. During the first few weeks of business, the owner employed a part-time accountant (with only a few months experience) who recorded the following list of assets.Required(a) Assuming that the
Yamindi was raised on a farm in the Northern Territory. While in high school, he was an active member of the local rural youth club and raised several prize animals that he sold at auction at state and local shows. He saved his earnings and by the time he finished secondary school, Yamindi had
The following transactions were undertaken by Massenburg Personnel Services during the month of February 2019. Ignore GST.1. Invoiced a client for providing advice on current employment legislation, $2400.2. Paid salaries to staff, $3600.3. Paid an annual subscription for access to an online
The general journal of Lenore Grunweld, Property Adviser, contained the entries below for the month of July 2019. GST is ignored.Required(a) Post the transactions to T accounts. The chart of accounts for the business included the following accounts.(b) Prepare a trial balance of the general ledger
The following information relates to the business of Man Ting’s Travel Agency for the month of June 2019.Required(a) Prepare general journal entries to record the above events, as appropriate, in the accounting records of Man Ting’s Travel Agency. Ignore GST.(b) Explain why you have made each
In December 2019, the following transactions occurred in Macchiato’s Coffee Roasters business that supplies cafés and also sells direct to the public.Required(a) Prepare general journal entries for each of the above transactions and events.(b) Post the entries to ledger T accounts and balance
Kelly’s Cleaning Services T accounts for 30 April 2020 were as follows:Required(a) Analyse the above accounts and describe in chronological order the transactions that have been recorded. Cash at Bank 2/4 80 000 5/4 17000 5/4 9/4 10/4 8000 12000 Vehicle 10/4 60 000 9/4 Cleaning Supplies 8000
On 1 July 2018 Nicole Andreou opened a beauty parlour. The following transactions occurred during the first month of operations (ignore GST).Use the following account titles and numbers: Cash at Bank, 100; Accounts Receivable, 101; Supplies, 102; Equipment, 103; Loan Payable, 200; Nicole Andreou,
The 31 May 2020 trial balance of Amy Wait, Physiotherapist, is shown below. Ignore GST.The following transactions were completed during June.Required(a) Prepare journal entries to record each transaction.(b) i. Open T accounts for the accounts shown in the trial balance.ii. Enter the 31 May balance
Roger’s Repair Services had the following transactions during April and May 2019.Required(a) Assuming that the accounting period is a calendar year, prepare general journal entries for Roger’s Repair Services during April and May 2020. Ignore GST.(b) At the end of May, interest is owing on the
Flaherty Ltd sells two types of shoes, men’s shoes and women’s shoes. During the financial year ended 30 June 2019, fixed costs were $460 800 and sales were in the ratio of three units (pairs) of men’s shoes to one unit (pair) of women’s shoes. Men’s shoes sell for $180 per pair, and the
Newbery and Newstead is a public accounting firm specialising in auditing local medium-sized businesses. Fees charged for each audit are determined on the basis of identifiable hours worked on an audit by each one of the accountants in the firm, an allocation of general overheads via a
Hotbox Ltd produces pizza boxes using two processes — cutting and packaging. The production budget for the year ending 30 June 2019 estimated raw materials use of $400 000, factory overhead of $270 000, direct labour costs of $190 000 and 168 750 machine hours. (Ignore GST.)During April 2019, the
Internet Inhand Ltd began producing netbooks on 1 July 2019. A unit of production passes through two processes — manufacturing and finishing. Production data for the month of July are presented below.Required(a) Prepare a cost of production report for July for each department, showing the unit
Tsoulos, Tsoulakis and Associates is a small firm of architectural consultants. At 1 July 2018, three architects other than the principals, Tony Tsoulos and Maria Tsoulakis, are employed. The following information is relevant for the 2018–2019 financial year.It is expected that each of the five
Melaleuca Manufacturing Ltd produces timber felling machines for the forestry industry around the world. Its two machines are the Tree Toppler, which cuts down trees and clears undergrowth, and the Melaleuca Muncher that pulps the timber into woodchips.The costs, volumes and cost drivers for the
Lucerne Ltd sells feather quilts and has never used CVP analysis in its 4‐year history. The manager provides you with the following sales and cost data for the first 4 years of operation.Required(a) Using the high–low method, estimate the cost function for the manufacture of quilts by Lucerne
SpeedBurn Ltd manufactures DVD burners and is considering expanding production. A distributor has asked the company to produce a special order of 3000 DVD burners. The burners will be sold using a different brand name and will not influence SpeedBurn Ltd’s current sales. The plant is currently
A to Z Pty Ltd has provided the following planned per‐unit cost and sales data for the year ended 30 June 2020.Fixed factory overhead costs are $1 056 000 per year, and the annual fixed selling and administrative costs are $352 000.Required(a) Calculate the break‐even point for 2019 and 2020 in
AEK Ltd has prepared its income statement, summarised below, for the year ended 30 June 2019.The company is evaluating three independent situations and has asked for your assistance.Required(a) If the company hires a new salesperson at a salary of $36 000, how much must sales increase in terms of
Aussie Sporting Company Pty Ltd produces two types of sporting balls: basketballs and footballs.During the year ended 30 June 2019 it sold the balls in the proportion of three basketballs for every two footballs sold. The basketballs are high‐quality balls and sell for $120 each and the variable
Copeland Hotels Ltd provide three levels of rooms in their hotels. The following planning data are provided for the year ended 31 December 2020:Fixed hotel overhead costs are $24 360 000 per year, and the annual fixed marketing and administrative costs are $10 200 000.As a graduate of a tourism
Cruz Manufacturing Ltd’s sales slumped badly in 2019. For the first time in its history, it operated at a loss. The company’s income statement showed the following results from selling 600 000 units of product: net sales $2 400 000; total costs and expenses $2 610 000; and loss $210 000.Costs
Sheds Ahead Ltd produces outdoor sheds for domestic use. The manager in charge of production has been asked to prepare a production budget, a direct materials budget and a direct labour budget for part of 2020 based on the company’s sales forecast.The materials and labour requirements per shed
Sami Stitches Ltd produces two types of sewing machines, a standard model and a deluxe model.The budgeted factory overhead costs for the production operation during 2020 are as follows.Production of 18 000 standard sewing machines and 12 000 deluxe sewing machines is budgeted for 2020. Each
Gasmania Pty Ltd produces patio heaters for household use. The following information has been gathered so that a production budget, a direct materials budget and a direct labour budget for part of 2020 can be prepared.The materials and labour requirements per tank are as follows.Management prefers
KK Pty Ltd is a small manufacturing business. For the year ending 30 June 2019, the company achieved sales of $2 772 000 and a gross profit margin of 30%. Although satisfied with this result, management was, however, keen to increase the company’s performance in the following year. Management was
The following actual balance sheet was prepared for Colombo Clocks Ltd as at 31 March 2020.At 31 March you are also provided with the following information.1. Sales forecasts available for 2020: April $25 000; May $27 000; June $20 000.2. Cash sales account for 50% of sales. Credit sales are
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