Questions and Answers of Financial Accounting 11th

Star Ltd purchased new equipment for $60 000 on 2 July 2019. The equipment was expected to have a $10 000 residual value at the end of its 8‐year useful life. Straight‐line depreciation has been
On 2 January 2019, McGrath Ltd purchased a machine for $36 000 with a useful life of 5 years and a residual value of $6000. In order to keep the machine running properly, the company has performed
At 30 June 2019, the financial statements of McMaster Ltd showed a building with a cost of $300 000 and accumulated depreciation of $152 000. The business uses the straight‐line method to
On 1 July 2019, Chadstone Ltd purchased a motor vehicle which is estimated to have a $6000 residual value and a useful life of 4 years. On 1 July 2021, the company purchased plant and equipment which
Prestige Printing Ltd commenced business on 1 July 2019. On 5 July 2019, a printing machine was purchased for $35 000, payable in two equal instalments due on 1 August and 1 October 2019. Transport
Branson Ltd owns two delivery vehicles (each with a residual value of $5000 and useful life of 4 years) and uses the straight‐line method of depreciation. The business closes its accounting records
Brunswick Ltd operates four types of equipment. Because of their varied functions, management has decided that four different depreciation methods will be used to determine depreciation charges.
Mason’s Manufacturing Ltd began operations during 2019. The company had a building constructed and acquired manufacturing equipment during the first 6 months of the year. Manufacturing operations
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
On 2 January 2019, Powerhouse Ltd purchased, by exchanging $300 000 cash and a $180 000, 12%, 18‐month finance company loan, assets with the following independently determined appraised values.The
Over a 5‐year period, Downton Ltd completed the following transactions affecting non‐current assets in financial years ending 31 December. The company uses straight‐line depreciation on all
Alexander Ltd completed the following transactions during 2019. The company uses sum‐of years’‐digits depreciation and records depreciation to the nearest month. Ignore GST.Required(a) Prepare
Selected transactions of Coromandel Ltd are given below. The company uses straight‐line depreciation and calculates depreciation expense to the nearest whole month. Ignore GST.Required(a) Prepare
Rawsons’ Recycling Ltd commenced business on 31 March 2019 in the recycling industry. The company balances its accounting records at month‐end and the end of its reporting period is 31 December.
At the end of Sovereign Ltd’s financial year, 30 June 2019, the following items must be resolved before adjusting entries and financial statements are prepared. Ignore GST.1. On 1 July 2018,
Your examination of the records of Wilson Ltd, which was established on 1 March 2019, reveals that the accountant debited the Land, Buildings and Equipment account with the following items (ignore
In early July 2019, Masterton Ltd is considering the acquisition of some machinery for $1 200 000 to be used in the manufacture of a new product. The machinery has a useful life of 10 years, during
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
Pringles Ltd is a large department store that has used the straight‐line depreciation method since the company was first formed. For the year ended 30 June 2019, the company made a record profit
In September 2019, Niem Duong opened a car hire business. The following transactions occurred during the first month of the business (ignore GST).Use the following account titles and
Read the article ‘New pathways to business success’ from InTheBlack and answer the following questions.Required(a) Compare the entry requirements to become a full member of CPA Australia, CAANZ,
Read the following article from Chartered Accountants and answer the question that follows.Required Discuss the significance of intentional trust to the success of a professional services firm.
Read the article below and address the questions that follow.Required Assume you are a newly graduated marketing student. You recall from your studies that accounting plays a vital role in the
Refer to the latest financial statements of Woolworths Group on its website, www.woolworthsgroup.com.au/page/investors/our-performance/reports/Reports. Browse through the chairman’s and chief
Financial items for George Karatsis IT Services on 31 May 2019 are presented below in alphabetical order.Required(a) Prepare a balance sheet similar to the one in figure 2.2. (b) Reformat the
During the year ended 30 June 2019, Skilled Services, a provider of temporary secretary personnel, had collected receipts from clients for a total value of $250 000. Wages of $136 000 had been paid
Sarah Hodge is a self-employed piano teacher operating her business from home. She keeps her accounting records for business activities completely separate from her records for personal activities.At
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
Identify, by letter, the assumption or characteristic of information which best represents the situations given.A. Accounting entity assumption B. Accrual basis assumptionC. Going concern
Month-end balance sheet amounts for the legal practice of Adam Booth, a local lawyer, for 3 consecutive months of 2019 are shown below. The information is complete except for the balance in the
Jones’ Mower Repairs began operations on 1 August 2019 and completed the following transactions during the first month.1. Darren Jones deposited $35 000 of his personal funds in a current account
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
The following events occurred during the month of September 2019 for the business of Eliza’s Webdesign Service.Required(a) Determine the effects of the business transactions on a balance sheet by
Eric Lu began a small business on 1 July 2018 by depositing $250 000 into a business bank account. On 30 June for the next 3 years, the assets and liabilities of the business were as
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
Asset, liability, equity, income and expense amounts for Sadoka’s Interior Decorating at 30 June 2019 are presented below.Required(a) Prepare an income statement for the business for the year ended
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
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
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
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
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
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
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
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
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
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
Read the following article and answer the question below.Required(a) Using this framework discuss whether brand names are ‘valuable assets’ of a business, or an expense.(b) Use the definitions of
Read the following article and answer the questions.Required(a) Identify the stakeholders in this situation.(b) Determine the ethical issues (if any) involved.(c) Comment on the ethics of bribing
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,
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
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
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
Kelly’s Cleaning Services T accounts for 30 April 2020 were as follows:Required Analyse the above accounts and describe in chronological order the transactions that have been recorded. 2/4 10/4 9/4
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
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
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
On 1 March 2017, James Taylor decided to open Taylor’s Tailormade that makes suits, trousers and jackets, and repairs and alters clothes. He contributed for this purpose sewing equipment $46 000
Lewis Edwards decides to branch out on his own and set up his own private practice as an accountant. Events occurring in March 2019 are as follows. Ignore GST.Required(a) After analysing the events
On 1 April 2018, Kenny’s Equipment Hire opened for operations. Kenny Kowslowski contributed the capital of the business of $720 000 cash. He has asked you to be record keeper for the business on a
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
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
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
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
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.
The income statement of Peter’s Pest Control for the month of August 2019 shows a profit of $6800 based on:In reviewing the statement, you discover:1. depreciation on equipment of $460 was
The following information was extracted from the accounting records of the business of Wendy’s Lawnmowing Services.Payments made during the year ended 30 June 2019 were as follows.Assume that
Kreative Kitchens purchased a 1‐year insurance policy on 1 March 2019. The entire premium of $9000 was recorded by debiting Prepaid Insurance. Ignore GST.Required(a) Give the adjusting entry at 30
Easy Rentals Ltd received 4 months’ rent in advance from tenants on 1 April 2019. The entire amount of $6400 was credited to the Unearned Revenue account at this date. Ignore GST.Required(a) Give
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
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
Monthly Foodies’ Magazine’s ledger includes the following accounts: Subscription Revenue, Unearned Subscriptions Revenue, Prepaid Insurance, Insurance Expense, Prepaid Rent and Rent Expense.The
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
Instant Clothing Alterations is run by Marc Giannopolous in the local shopping centre. The business prepared the following unadjusted and adjusted trial balances at 30 June 2019.RequiredPrepare the
The trial balance of Chelsea Elliott, marketing services provider, at 30 June 2019 was as follows (ignore GST).Required(a) Using the following information, prepare adjusting entries. Use the accounts
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
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
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
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
Trang Nguyen operates a roofing business that specialises in replacing broken tiles and cleaning and repairing roofs and gutters. He began business in April 2019 but has not yet established a formal
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
The unadjusted trial balance of Helena’s Hire Cars is shown below (ignore GST).Additional information1. Petrol purchased on credit for $680 and used during the last week in June has not been paid
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.
Lucia works as an accountant for a motor vehicle engine parts manufacturer called Vroom Ltd, owned by an international car firm. Her manager, Freda Chuse, is paid a bonus depending on the
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. Craig Fraser, Capital Craig
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)
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
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
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
Paradise Gardens Hire Ltd’s income statement is presented below. During the year, directors declared and paid a dividend of $16 000.Required Prepare the necessary general journal entries to close
On 1 January 2019, the equity of Deadwood Pty Ltd consisted of share capital of $800 000 and retained earnings of $260 000. During the period, the company declared and paid a cash dividend of $70
On 30 June 2019, the accountant for Nigel the Maintenance Man calculated that 1 month’s interest of $420 had accrued on a bank loan. An interest payment of $1600 was made on 30 September
On 30 June 2019, the adjusted trial balance of Outback Car Rentals showed the following selected balances.Both the Rentals Receivable and Interest Payable accounts had been recorded as a result of
The account balances taken from the unadjusted trial balance and adjusted trial balance columns of the worksheet of Tran’s Transcription Service for the year ended 30 June 2020, the first year of
The accountant of the marketing firm, S. Preston, has posted adjusting entries (1) to (5) to the ledger accounts at 30 June 2019. All the income, expense and equity accounts of the entity are listed
The management consulting firm of the Zimbardi sisters supplied the following information as at 30 June 2019, the end of the financial year.1. Interest earned but not received totals $2600.2. The
During 2019, Mount Remarkable Golf Club received $180 000 for membership fees. The accountant credits Unearned Membership Fees, a liability account, for the full amount when cash is received. At 30
The unadjusted trial balance of Secretarial Services is as follows.The following additional information should be taken into account.1. Office supplies unused at 31 December 2019 amount to $2320.2.
Gemma Jones owns Australia Works, which provides employment placement services. The unadjusted trial balance on 30 June 2019 below was prepared by her accountant.The following additional information
Jack Thomas owns a men’s hairdressing salon which conducts business in a large shopping complex in Melbourne. Presented below are selected (incomplete) data from the three trial balances at the end
The ledger of Catherine Delaney, Financial Consultant, contains the following account balances on 30 June 2020.The following additional account titles are included in the chart of accounts.•

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