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accounting principles
Accounting Principles And Practice 1st Edition S. Hall, N. Skene Smith - Solutions
=+Give the Machine Account for the two years, providing depreciation at 10% per annum.
=+3. The Cash Price of a machine was £1,200. D. George acquired it on 1st January, 1959, and paid a deposit of £400 on that day. The balance including interest at 8 % per annum was to be settled by seven quarterly instalments of £123 5s. Od. over the years 1959 and 1960. No account is opened for
=+On 31st December, 1959, the only balance on the books relating to the transaction is a debit on Motor Car Account of £1,550. Make any adjusting entries you think desirable and provide for depreciation at 20% per annum. Show how the balance will appear in the Balance Sheet of Jones at 31st
=+2. A. Jones bought a motor car on Hire Purchase terms from M.B.J. Ltd.on the 1st January, 1959. The H.P. Price was £2,075 payable by an immediate deposit of £500 and three equal instalments of £525 on 30th June and 31st December, 1959, and the 30th June, 1960. The H.P. Price includes interest
=+In the accounts for the Trading Year to 31st December, 1961, depreciation at the rate of 20% per annum is to be written off the Motor Vehicles.Show the above transactions in the ledger of A. James and the Balance Sheet entry at 31st December, 1961.
=+(2) Four half-yearly instaknents of £538, the first being payable on 30th June, 1961. Interest at the rate of 6% per annum is included in the instalments.
=+1. On 1st January, 1961, A. James obtained two motor vehicles, the total cash price of which was £2,400. Payment was to be made as follows:(1) A deposit of £400.
=+The partners are entitled to 20% of the Net Profit (calculations to nearest£) of the branch they manage and then to equal shares in the rest.Also give the Camley Branch Account in the Oxtown books after the year's closing entries have been made.
=+£69,009 £69,009 £70,861 £70,861 Prepare Trading and Profit & Loss Accounts for the Year ended 31st October, 1961, and a Balance Sheet of the partnership at that date.The difference on Branch Current Accounts arises because of a remittance from Camley which had not arrived at Oxtown on 31st
=+7. Some years ago, John and George combined thek separate businesses in Oxtown and Camley into a partnership. The following abbreviated Trial Balances were extracted from the books of the two branches at 31st October, 1961:Oxtown Camley Dr. Cr. Dr. Cr.£ £ £ £Capital —John 16,418 George
=+Convert the Branch Trial Balance to Sterling, obtain gross profit for branch and head office, and prepare consolidated Profit & Loss Account for the year and Balance Sheet as at 31st December, 1960.
=+Premises at cost at 1 Jan. 1958 50,000 Motor Vans at cost at 1 Jan. 1958 8,000 Furnishings at cost at 1 Jan. 1958 5,000 Local Creditors 72,000 Local Purchases 540,000 Goods from Head Office 2,160,000 Remittances to Head Office 2,722,000 Wages 220,000 Administration Expenses 190,000 Sales
=+Stock at 31st December, 1960 4,680£167,154 £167,154 Rates of Exchange: Aras to £—1st January, 1958 50 1st January 1960 60 31st December, 1960 40 Average for 1960 45 Trial Balance of Kara Branch Aras Aras
=+Debtors and Creditors 2,500 14,160 Fixed Capital—A. B. 24,000 B. B. 16,000 Freight and Insurance 1,320 Home Sales 8,000 Furnishings 1,750 Kara Branch Account 71,680 Office Charges 560 Partners' Withdrawals—A. B. £2,000 B. B. £2,000 4,000 Premises—Store 4,300 Office 7,000 Remittances from
=+6. HA. & B. Bryson are partners in the firm of ACARA, Wholesale Exporters, sharing profits and losses equally, after interest of 8 per cent has been allowed on fixed capital, and salaries of £2,400 and £2,000 have been credited respectively.The following is the Trial Balance of the General
=+From the above information, prepare a Trading and Profit & Loss Account (in columnar form) for the year ended 31st December, 1962 and a Balance Sheet at that date. Submit the partners' Accounts(in columnar form).
=+Three months rent is outstanding for both London and Bristol; rates include £200 (London) and £150 (Bristol) in respect of the three months ended 31st March, 1963.Stocks at 31st December, 1962, were:London (at cost) £14,050 Bristol (all at issue price) £10,200
=+Goods supplied to Bristol 33,000 Sales 80,000 37,000 Creditors 15,000 450 London Account 3,750£146,000 £51,200 Fixtures are to be depreciated at 10% per annum and leases by 5%per annum.
=+Stationery and Postages 700 200 Packing Materials 2,300 1,200 General Expenses 1,700 800 Heating and Lighting 900 300 Drawings:A 3,000 2,000 C 1,800 Cash at Bank 4,600 950 Bristol Account 3,750£146,000 £51,200 Assets less liabilities introduced by C 10,000 Capital Accounts A 10,000 8,000
=+All purchases are made by the London store which delivers goods to Bristol at cost plus 20%. A Head Office charge of £500 per annum is to be made by London to Bristol but this has not yet been recorded in the books.The Trial Balance at 31st December, 1962 was:London Bristol£ £Stock 21,000
=+per annum, and 5 % of the profits after charging the salary and percentage of profits; and that the balance of profits on the Bristol store shall be included with the London profits and the total divided among the partners as follows:A 50%30%C 20%
=+C, who has a similar business in Bristol, joins them as a partner and aquires equally from A and Β a 20% share of their Goodwill; in payment for the Goodwill and as his contribution to the capital of the firm, C introduces the assets, less liabilities, of his Bristol business which were:Stock
=+The difference on Current Accounts is due to Goods and Cash in Transit.Prepare a Trading and Profit & Loss Account and Balance Sheet(Depreciation—Premises 2%: Fixtures and Fittings 5%).5. tA and Β are in partnership, sharing profits in the proportions 60% and 40 % respectively and conduct a
=+General Expenses Cash in Hand Head Office Account Dr.£700 14,000 4,000 1,000 1,900 400 Cr.£14,500 7,500 14,500£128,900 £128,900 £22,000 £22,000 The Stocks at 31st March, 1962, are:Head Office £9,950 Branch £1,910
=+£10,000 10,000 Dr.£9,000 2,000 12,300 13,400 10,800 75,300 81,000 3,850 200 7,250 8,200 Branch Debtors Sales Goods from Head Office Premises Fixtures and Fittings
=+4. Duck and Swan are equal partners carrying on a retail business at Poole and a branch at Pond. The balances on the books at 31st March, 1962, were:Head Office Partners Capital Duck Swan Premises Fixtures and Fittings Debtors and Creditors Stock 1 Apl. 1961 Purchases & Sales Balance at Bank Cash
=+3. tHard and Fast carry on a business having a Head Office and two branches. All purchases are made by Head Office which invoices goods to the branches at cost plus 25 %. All sales are made by the branches. Cash received by the branches is remitted to Head Office. Branch expenses are paid direct
=+Record these transactions as they should appear in the books at Birmingham bringing down balances as on 31st May, 1962, and show the gross profit of the branch for the period ended on that date.March April May£ £ £4,400 5,600 7,200 150 180 120 4,200 4,800 6,300 2,600 5,800 4,500
=+2. S. Eller carries on a retail business in Birmingham. On 1st March, 1962, he opened a branch shop in Coventry from which all sales were made on credit terms. All goods for the branch were supplied from Birmingham and were charged out at cost plus 25 per cent. The following were the
=+The areas of the building occupied by the departments are:Books i Stationery i Office Equipment i
=+1. From the following information prepare Departmental Revenue Accounts in the form you consider most helpful:Books Stationery Office Equipment£ £ £Stocks 1 Jan. 1961 6,417 2,812 3,650 Purchases 40,113 21,161 24,060 Sales 60,200 28,010 38,080 Departmental Salaries 3,800 2,750 6,116 Stocks 31
=+1. *D. Tigg is in business as a wholesaler, and on 1st February 1962, his assets and liabilities were:£Stock 1,800 Office Furniture 490 Cash at Bank 197 Cash in Hand 5 Debtors: A.Jonas 40 M. Tapley 65 Creditors: S. Gamp 78 B. Harris 90
=+Entries in the respective Day Books during the period 1st to 15th February are summarised below:Purchases £ Sales £ Returns Inwards £Feb. 3 S. Gamp 150 Feb. 2 A. Jonas 232 Feb. 10 M. Tapley 25 8 B.Harris 96 8 J. Brick 195 15 J. Brick 5 14 M. Lupin 120£366 £427 £30*Re-printed by courtesy of
=+Other transactions during the period were:£Feb. 1 Drew and cashed cheque for cash purposes 10 Cash payments: Wages 6 Sundry Trade Expenses 3 Drawings (D. Tigg) 5
=+3 Sold to C. Dickins for cash, Office Furniture 15 4 Cash Sales 75 Paid to Bank 50 5 Paid by cheque to S. Gamp the amount due to him on Feb. 1st less 5% cash discount.
=+6 Cash Sales 80 Received and banked a cheque from M. Tapley for 50 7 Received and banked a cheque from A. Jonas for the amount due from him on 1st Feb. less 2i% cash discount.Paid by cheque. Rent 25 8 Cash payments: Wages 6 Sundry Trade Expenses 2 9 Cash Sales 99 Paid to Bank 70
=+10 Paid to D. Tigg as Drawings a cheque for 25 14 Received and banked a cheque from T. Pinch as loan 100 15 Paid cheque to M. Lupin on account 50 Banked all cash in hand except £5.You are to:
=+(a) Open the accounts of D. Tigg on 1st February by journal entry.(b) Enter the cash and bank transactions in a three-column cash book.(c) Post all entries, including the Day Books, to the appropriate ledger accounts.(d) Balance the personal accounts and cash book on 15th February and take out a
=+2. Give the Journal entries for the following transactions:(a) A. Fale owes £120 but as he is unable to pay we write off the debt as bad.(b) An entry in the Sales Day Book for £140 has been incorrectly posted to the account of B. Udo instead of B. Udom. Make the correction.
=+(c) Goods costing £72 have been withdrawn for personal consumption.Charge to Drawings.(d) The credit purchase of machinery costing £160 from Argus & Jones Ltd.(e) A purchase of Office Stationery has been included in the Purchase Book as ordinary purchases. The amount involved is £15. Make the
=+3. •State precisely the circumstances which could have given rise to the following Journal entries in the books of G. Gough, a manufacturer.(a) Bad Debts Reserve To P. & L. A/c(b) A. Buyer To Discount Allowed(c) Machinery To Wages(d) Machinery To Depreciation
=+4. *(a) Smith, a trader, received from his solicitor a cheque for £74 which represented the proceeds of collecting a debt due to him from Jones, a customer, less the solicitor's charges £6. Show the entry in Smith's Journal to record the matter.
=+(b) By arrangement with Motor Sales Ltd., an old motor lorry, standing in Basset's books at a value of £650, is accepted in part exchange at a value of £600 against the purchase from them, on credit, of a new lorry costing £1,150. Give the necessary entries in the Journal proper of William
=+(c) A cheque for £50, which had been received by a trader from his customer Paterson in settlement of an account due, was dishonoured and returned by the bank. The trader receives information that Paterson is bankrupt and unlikely to be able to pay any part of the amount due. Show the entries
=+5. *The system in force for the recording of the transactions of Jarrow &Jersey Ltd. is that all invoices, whether for goods or for services, are entered in the Purchases Journal, the entries in that Journal being analysed to furnish the totals for posting to the Nominal and Real Accounts. Rule a
=+Luton Bros.—raw materials 530 Ashby S.S. Co.—freight 126 19 Melton & Son—carriage 53 J. Mowbray—raw materials 510 31 Morpeth Ltd.—rent 300 Road Services—carriage 58 A. Malvern—printing 27 Leek & Co.—raw materials 520
=+6. *The Cash Book of J. Carlisle as at 30th June, 1961, showed a balance at the bank of £509. 16. 8. On checking the Bank Statements, the following differences were discovered:(a) A cheque for £127. 9. 6. sent to Akeswick & Co. had not been presented for payment.
=+(b) Cash Sales £362. 10, 4. paid into the bank on 30th June, 1961, had not been credited by the bank until 1st July.
=+(c) Bank Charges amounting to £8. 8. 0. shown in the bank statement had not been entered in the Cash Book.
=+(d) A cheque for £52. 13. 4. issued to Whitehaven & Co. was paid by the Bank on 15th June, 1961, but had been omitted from the Cash Book.
=+(e) On 20th June, 1961, a cheque for £10. 10. 0. was received from
=+A. Debtor and duly banked. On 25th June the bank returned the cheque marked "Refer to Drawer", but no record of the dishonour had been made in the Cash Book.
=+Show the Cash Book with such amendments as are necessary, and prepare a reconciliation of the balance with that shown by the Bank Statement as at 30th June, 1961.
=+1. *The following totals are taken from the books of Dover and Dudley:1962 Jan. 1 Dec. 31 Credit Balances in Purchases Ledger£5,926„ Sales Ledger 134 Debit Balances in Purchases Ledger 56„ Sales Ledger 10,268 Sales 71,504 Purchases 47,713
=+Cash received from customers 69,872 Cash paid to Creditors 47,028 Sales Ledger Balances written off as bad 96 Sales Returns and Allowances 358 Purchases Returns and Allowances 202 Discounts Allowed 1,435 Discounts Received 867
=+Purchase Ledger Credits transferred to Sales Ledger 75 Legal Expenses charged to Customers 28 Credit Balances in Sales Ledger 101 Debit Balances in Purchases Ledger 67 Prepare separate Purchases Ledger and Sales Ledger Control Accounts as they would appear in the General Ledger of the firm,
=+2. *The following figures have been taken from the books of a trader for the year to 31st December, 1962.£Sales Ledger debit balances 1 Jan., 1962 4,200 Sales 78,450 Cash Received from Debtors for Goods 75,780 Bad Debts written off 930
=+Provision for Bad Debts, 1 Jan., 1962 210„ „ „ 31 Dec., 1962 250 Discounts Allowed 1,430 Discounts Received 1,090 Returns Inwards 970 Returns Outward 840 A balance on a Sales Ledger Account set off against
=+a balance on a Bought Ledger Account in the name of the same person 120 Cash paid in settlement of a credit balance on a Sales Ledger Account 80
=+Sales Ledger Credit Balances 31 Dec. 1962 130
=+All sales were entered in Personal Accounts. Using the relevant figures prepare the Sales Ledger Control Account for the year to 31st December, 1962.
=+3. *In the books of Dundee & Co. is an account for J. Blythe in both the Bought and Sales Ledgers.On 28th February, 1962, the Bought Ledger Account showed a credit balance of £260 and the Sales Ledger Account was closed. During the month of March, 1962, the following transactions took place:
=+March 4 Sold goods on credit to Blythe for £285.10 Purchased goods on credit from Blythe for £75.12 Paid Blythe the balance due to him on the 1st day of the month less 2i % cash discount, by cheque.17 Blythe returned goods and Dundee & Co. issued a credit note for £15.
=+20 Sold goods on credit to Blythe for £290.24 Purchased goods on credit from Blythe for £120, less a trade discount of 10%.
=+26 One-half of the goods purchased on the 24th were returned to Blythe and an allowance of the cost of such goods was made by Blythe.
=+Complete the accounts of J. Blythe in the books of Dundee & Co.showing on ONE account the net balance outstanding at the end of the month.
=+4. *When the Trial Balance of Oxford & Co. was prepared, it was found that the total of the credit side exceeded that of the debit side by£1,061 and a Suspense Account was opened with this amount.On checking the records, it was found that:
=+(1) A debit balance of £520 on Rent Account had been entered on the credit side of the trial balance.(2) The Sales Account was over-cast by £10.
=+(3) An invoice of £60 in respect of goods purchased from J. Williams had been credited to the account of J. Williamson.(4) The purchase of a motor truck for £647 had been correctly entered in the Cash Book but had been posted to the Motor Truck Account as £674.
=+(5) A balance of £38 due from C. Cambridge had been omitted from the trial balance.
=+(6) Goods to the value of £40 returned by D. Durham were not entered in the Returns Inwards Book but had been included in the stock on hand.
=+Write up the Suspense Account showing how it would be affected, if at all, by these errors.
=+5. Prepare a Trading and Profit & Loss Account for the year ending 31st December, 1960 and a Balance Sheet as at that date from the following Trial Balance and supplementary information:
=+Sales 15,660 Purchases 6,900 Stock 3,100 Discounts 940 160 Wages 1,140 Rent, Rates and Insurance 632 Bad Debts 160 Provision for Bad Debts 420 General Expenses 202 Premises 2,000 Motor Vehicle 1,620 Debtors 3,600 Creditors 920 Drawings — A. Johnson 600 Cash 496 Suspense Account 3,770 Capital
=+(a) After a little further work, the errors necessitating the Suspense Account were found. They were:1. The balance of £800 for Fixtures and Fittings had been omitted from the Trial Balance.
=+2. An addition in the Purchases Book was £3,000 too little.3. A mis-posting to General Expenses Account.(b) Provide for Depreciation at the following rates:Premises 2% p.a.Fixtures & Fittings 5 % p.a. ¡Motor Vehicle 20% p.a.
=+(c) The provision for Bad Debts is to be reduced to 5% of Sundry Debtors.(d) Allow for the prepayments:Rates £30 Insurance £62.
=+(e) No Motor Expenses appear in the Trial Balance. It appears that purchases of petrol have been included with general purchases.The total amount is £120. Other Motor Expenses have been paid by A. Johnson, who estimates the amount as £50.
=+(f) During the year Johnson has taken goods for personal consumption.The cost of those goods was £160.(g) The closing stock was valued at £2,800.
=+1.* On 1st July, 1962, WiUiams owes Dixon £1,200 and immediately accepts three bills of £400 each due respectively in one, two and four months.The first bill is retained by Dixon and is met in due course; the second is discounted (charges £4) and is met in due course; the third is also
=+New arrangements are immediately made whereby Williams pays cash of £100 and accepts a bill due in two months for the balance of the account with interest at 6 per cent per annum. The bill is retained by
=+Dixon until maturity. On being presented the bill is dishonoured; the notarial charges being 5/-. Williams is shortly afterwards made bankrupt, his trustee paying a first and final dividend of 5/- in the £.Prepare the Ledger Accounts in Dixon's books.
=+2. On 1st January, 1961, Barlow and Ring enter into an agreement to provide liquid funds.(1) Barlow accepts a 3 months bill payable to Ring for £1,000.(2) Ring pays £300 to Barlow and accepts a 6 months Bill for £700 payable to Barlow.
=+Both immediately discount the bills with their bankers. The discount charged to Barlow is £16 and to Ring £18.Barlow pays his bill on the due date but Ring is unable to do so. He arranges for a friend. Wells, to pay the amount to the banker. He accepts a three months draft payable to Wells for
=+3. tOn 1st October, 1961, Marten consigned goods to the value of £10,000 to Stevens, incurring expenses for freight and insurance of £600. An Account Sales was received from Stevens, who is entitled to a commission of 5% on gross sales, made up to 31st December, 1961, the end of Marten's
=+1. 60% of the goods had been sold for £8,000, but only £6,500 had so far been received.
=+2. Expenses of £300 had been incurred in connection with the goods consigned and £200 in connection with the goods sold.On 15th January, 1962, Marten incurred bank charges of £10 in cashing the sight draft for the balance due, which accompanied the Account Sales from Stevens.
=+A further Account Sales was received, made up to 31st March, 1962, which showed that:
=+1. The balance of the goods had been sold for £5,500 and SeUing Expenses of £150 had been incurred.
=+2. All cash due had been received, except that a bad debt of £100 had been incurred.
=+On 15th April, 1962, Marten incurred bank charges of £8 in cashing the sight draft for the balance due, which accompanied the Account Sales from Stevens.
=+Write up the accounts in the books of Marten necessary to reflect the above transactions.
=+4. ÍDuke and Lord entered into a joint venture to buy and sell second-hand cars. Profits and losses were to be shared: Duke two-thirds and Lord one-thh-d.
=+On 16th August, 1962, Duke purchased two cars for £320 and £480 respectively. He incurred expenditure of £120 on repairs and on 1st September, sold one of the cars for £400 and on 10th September the other car for £620.
=+On 12th September, 1962, he purchased a further car for £600 which was sold on 20th September for £800, which amount was paid to Lord who paid it into his own bank account.
=+On 12th August, 1962, Lord purchased a car for £400 which he sold for£500 on 15th August, having incurred expenses of £40 on it. This car was returned by the customer on 20th August; he was allowed £480 for it. As this car was still unsold on 30th September, 1962, it was agreed it should be
=+On 30th September, 1962, the sum required in full settlement as between Duke and Lord was paid by the party accountable.You are required to prepare:(a) The Joint Venture Account as it would appear in the books of Duke recording his transactions with the joint venture, and
=+(b) A Memorandum Account for the Joint Venture, showing the net profit.
=+L •The New Town Association commenced activities on 1st January, 1959, and the following is a summary of its transactions for the following year:Receipts: £Subscriptions 350 Net income from dances and whist drives, etc. 120 Deposit interest 6
=+Payments: £Rent of premises 150 Rates 40 Lighting, heating, etc. 52 Purchase of Savings Certificates 120 362 Balance in hand at 31st December, 1959 £114(including £86 in Post Office Savings Bank)
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