Mastering Accounting 1st Edition George Bright, Michael Herbert - Solutions

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Madhur Daswani keeps a three-column cash book; during the month of November 20-9 the following transactions took place. Enter each transaction in the cash book, balance at the end of the month, and bring down the balances:Nov 1 Balances brought forward from last month; cash £76, bank £2,641 2
Joseph Simpson is a trader who keeps a three-column cash book; during the month of March 20-9 the following transactions took place. Enter each transaction in the cash book, balance at the end of the month, bring down the balances and show the discount accounts as they would appear in the general
Harry Bairstow keeps a three-column cash book; during the month of May 20-9 the following transactions took place. Enter each transaction in the cash book, balance at the end of the month, bring down the balances and show the discount accounts as they would appear in the general ledger:May 1
George Singer keeps a three-column cash book; during the month of August 20-9 the following transactions took place. Enter each trans¬ action in the cash book, balance at the end of the month, bring down the balances and show the discount accounts as they would appear in the general ledger:Aug 1
Jean Jones opened a greengrocer’s shop on 1 April 20-4. She had £1,000 cash, of which she placed £900 into a bank account. Transactions for the shop during the month of April were:April 3 Purchased goods from T Duke on credit 150.00 4Paid half year’s rent by cheque 600.00 7Cash sales for week
Cash Book (Credit side only)Date Discount Cash Bank 20-5£££May 1 Balance 2,200 (...)10 J Archer 20 (...)380 (.15 Bank 160 (.20 Purchases 95 (.27 Fixtures 750 (.31 Balances 55 (.440 (.20 310 3,770 You are required to choose from the following statements the one which you feel best expresses the
John Dawson makes all payments over £20 by cheque and pays all money received into the bank. On 1 January 20-9 the bank column of his bank cash book showed a balance in the bank of £2,252.58. During the week the following transactions took place:2 Jan Paid D Guy a cheque of £114.40, this was in
Graham Dean makes all payments over £20 by cheque and pays all money received into the bank. On 1 March 20-9 the bank column of his bank cash book showed a balance in the bank of £1,376.30. During the week the following transactions took place:2Mar Paid insurance £150 by cheque 2 Mar Banked
James McCann makes all payments over £20 by cheque and pays all money received into the bank. On 5 February 20-9 the bank column of his bank cash book showed a balance in the bank of £1,602.55. During the week the following transactions took place:6 Feb Paid rent £135 by cheque 6 Feb Banked
Charles Hargreaves makes all payments over £20 by cheque and pays all money received into the bank. On 1 June 20-9 the bank column of his bank cash book showed a balance in the bank of £1,870.85. During the week the following transactions took place:2 Jun Paid W Dyson £244 by cheque, this was in
Karen Jones makes all payments over £20 by cheque and pays all money received into the bank. On 1 May 20-9 the bank column of her bank cash book showed a balance at the bank of £3,258.During the month of May the following transactions took place:2 May Paid D Fisher £472 by cheque in full
Gina Howard makes all payments over £20 by cheque and pays all money received into the bank. On 1 June 20-9 the bank cash book showed a balance in the bank of £1,405.During the month of June the following transactions took place:3 Jun Drew a cheque for £450; £105 was for petty cash the
(a) The imprest (float) to start the week was £50.00. You have petty cash vouchers to the value of £35.20. How much should be in your petty cash box?(b) The imprest at the start of the week was £75.00. If £64.30 is spent during the week, how much will you receive at the end of the week?(c) To
Look carefully at the illustration of the completed petty cash book for the week ending 5 May (Figure 13.4) and answer the following questions:(a) What is the amount of the imprest?(b) How much was spent on postage and stationery during the week?(c) Was there any petty cash left at the end of the
Mark Alexander is a sole trader who keeps his petty cash on the imprest system. The imprest of £100 is restored at the beginning of each month.During the month of February 20-8 the following transactions took place:Voucher number Feb 1 Petty cash in hand £15.62 1Petty cash restored to imprest
John Beaumont keeps a petty cash book with analysis columns for Travelling, Motor expenses. Postage and stationery and Ledger accounts. At the close of business on 31 March 20-8 his cash in hand stood at the imprest amount of £200.You are required to write up the petty cash book for the month of
Jennifer Peterson is a florist who keeps her petty cash on the imprest system. The imprest of £150 is restored at the beginning of each month. Her petty cash transactions for the month ofAugust 20-8 were:Aug 1 Petty cash in hand £12.60 Voucher number 1Petty cash restored to imprest amount 2Bus
Robert Groves keeps his petty cash on the imprest system. The imprest of £100 is restored at the beginning of each week. His petty cash transactions were:Voucher number Jun 16 Petty cash in hand £15.74 16 Petty cash restored to imprest amount 17 Batteries for wall clock £2.77 iplusYKT 48p) 12 18
Hazar Khan keeps his petty cash on the imprest system. On 1 July there was £21.35 balance in hand and the first available petty cash voucher was number 28. The imprest of £150 is restored at the beginning of each week. His petty cash transactions were:Jul 1 Petty cash restored to imprest amount 2
Denise Fielding keeps her petty cash on the imprest system. On 1 August there was £35.28 balance in hand and the first available petty cash voucher was number 62. The imprest of £200 is restored at the beginning of each month. Her petty cash transactions during the month ofAugust were:Aug 1 Petty
George Mainwaring maintains a petty cash book for all payments less than £20. The imprest of £100 is restored at the end of each week. Other payments are made by cheque, and all receipts are paid into the bank. At the start of business on Monday 3 March 20-6 his bank cash book showed a balance in
DougWigby pays all receipts into his bank account and makes all payments greater than £15 by cheque. All other payments are made out of petty cash, at the end of each week the petty cash is restored to the imprest amount of £50.On 5 January 20-7 DougWigby’s bank cash book showed a balance in
Penny Wheelwright runs a small retail business. She makes all payments over £20 by cheque and pays all money received into the bank. On 1 April 20-9 her bank cash book showed a balance in the bank of £304.28 and there was £28.96 petty cash in hand.Penny keeps her petty cash book on the imprest
James Rogers operates a small electrical business. He makes all payments over £25 by cheque and pays all money received into the bank. On 1 May 20-9 his bank cash book showed an overdrawn bank balance of £726.85 and there was £14.30 petty cash in hand.James Rogers keeps his petty cash book on
Christine Groves’ cash book for the month of May 20-4 is shown below:Cash Book (bank columns only)20-4 May 1 Balance b/d£900.00 20-4 May 2 T Rogers«•£^ 175.00 9C Briggs 465.00 8YEB 368.00 18 Sales 575.00 19 L Gibson 112.00 25 A Ridgeway 750.00 28 Rates 125.00 30 Sales 590.00 31 Balance c/d
Here is Andrew Garcia’s cash book for the month of June 20-4:Cash Book (bank columns only)20-4£20-4£Jun 1 Balance b/d 750.00 Jun 3 R Moore 298.00 4Sales 455.00 8B Ramsden 324.00 9B Sinclair 250.00 12 Insurance 450.00 13 Sales 625.00 14 S Franks 675.00 19 R Patel 170.00 30 Rent 150.00 30 L
On 31 October 20-4 David Alexander’s cash book showed a bank balance of£2,750; on the same date his bank statement showed a balance of £2,290.The difference between the two balances was found to be due to the following:(a) On 15 October a payment of £25 for a trade subscription had been made
Carol Sanderson’s cash book for the month of Mar 20-4 is shown below:Cash Book (bank columns only)20-4£20-4£Mar 1 Balance b/d 2,500.00 Mar 3 Drawings 150.00 8T Oliver 365.00 '6 R Kemp 263.00 15 L McQuade 186.00 ^/Rates 500.00 23 M Singh 470.00 -28 B Dixon 128.00 31 D Warner 259.00 30 F Readman
On 2 May 20-9 Jenny Ashcroft received her bank statement for the month ofApril 20-9. On 30 April her cash book showed a balance in hand of£1,975.On checking her records the following information was revealed:(a) The bank had paid a standing order of £195 for Rent and a direct debit of £368 for
The bank columns of Robert Williams’ cash book for the month of April 20-5 are shown below:Cash Book Cheque number 20-5 1 Apr Balance b/d£765 .20-5 3 Apr Rent 59635! 170 5 Apr F Mills 250 7 Apr Smart Motors 59636 108y 10 Apr J Kingsway 590 v/8 Apr L Summers 59637 325y'17 Apr M Fieldhouse 186 20
Jill Chippendale makes all payments over £20 by cheque and pays all money received into the bank. On 1 May 20-9 the bank column of her cash book showed a balance at the bank of £2,780.During the month of May the following transactions took place:3 May Paid M Hudson a cheque of £285 (cheque
Denise Hemingway makes all payments over £20 by cheque and pays all money received into the bank. On 2 October 20-9 her bank cash book showed a balance in the bank of £2,304.During the month of October the following transactions took place:4 Oct Drew a cheque for £450 (cheque number 60619),
Gina Howard makes all payments over £20 by cheque and pays all money received into the bank. On 1 May 20-5 the bank cash book showed a balance in the bank of £1,405.During the month of May the following transactions took place:3 May Drew a cheque for £450 (cheque number 20609), £105 was for
Your firm has decided to buy an Amastar Computer. Three different suppliers were asked for prices and delivery dates and the following quotations have now been received:(a) Use your calculator to work out all three prices (b) State which supplier is offering the best price.Suppliers Price c
James Dickson of 34 Kingsway, Leeds LSI6 8ER is the proprietor of a small business. His sales on credit for the month of May 20-7 were as follows:2 May G A Coleman, 2 Parkfield, Nottingham, Invoice number 3481 6 Garden chairs at £4.50 each 10 Deck chairs at £3.75 each 6 Patio furniture sets at
Speed Electrics of 2 High Street, Huddersfield is a wholesale electrical business. During the month of June 20-7 they make the following sales:1 June James McMillan, 2 Spring Lane, Bradford, Invoice number 5724 3 Electric kettles at £19.50 each 10 Electric toasters at £18.75 each 3 Electric
Martin Greendale, 8 Parkside, Darlington is the owner of a garden acces¬ sories business. During the month of August 20-7 his sales on credit were:1 Aug Adel Garden Shop, Heathway, Adel, Leeds, Invoice number 395 3 Lawn mowers at £55 each 6 Garden forks at £6.50 each 3 Garden spades at £7.50
James Sellars, 34 High Street Bradford, is a textile wholesaler.Price list White cotton pillow cases 45p each White cotton sheets £2.50 each Grey mixture blankets £5.75 each White wool blankets £7.50 each During the month of September 20-8 he made the following sales:1 Sep G Miller 10 White
There is no limit to the number of people who may become members of the company. The capital of a company is divided up into what are called shares, which may be of any amount decided by the members, e.g. SOp, £1, £5. Someone becomes a member or shareholder by purchasing one or more shares in the
The members of the company have limited liability. This means that the maximum amount that a member can lose is the capital which he has actually invested in the company. So unlike a sole trader or a partner, the shareholder's private possessions cannot be used to pay for the debts of the business.
To test your understanding of these important points match each item in list A with the appropriate item in list B:List A 1 A company 2 Shareholders 3 Shares 4 The liability of shareholders List B (a) are members of a company.(b) is limited to the amount of their investment.(c) is a separate legal
which has at least twenty shareholders True/False LO.1
which has a minimum authorised share capital of £50,000 True/False LO.1
whose name is followed by the letters 'ltd' True/False LO.1
which is registered as a public company with the Registrar of Companies True/False LO.1
Those wishing to form a company have to submit certain documents to the Registrar of Companies together with the relevant fee. The documents are:(a) The Memorandum of Association which gives the company's name, the address of its registered office, the objects of the company, the maximum amount of
Once these documents have been checked and passed, the Registrar of Companies will issue a Certificate of Incorporation. This then means that the company has come into existence as a legal entity. As it is a private company it may then begin .trading. LO.1
There are more sources of t1nance available. True/False LO.1
There is limited liability for the owners. True/False LO.1
There are fewer formalities. True/False LO.1
Accounts do not have to be audited. True/False LO.1
The company continues in existence even if the major shareholder dies.True/False LO.1
What laws govern the operation of limited liability companies? LO.1
Which of the following are public companies? Tick the correct items:(a) Dave Salmons, Motor Trader(b) Cowley's Cars Ltd(c) Vernon's Vehicles PLC(d) Cardiff Vehicles CCC(e) Cymru Cars Cyf. LO.1
The two main documents which have to be submitted to the Registrar of Companies in order to form a limited liability company are the ________ of Association and the of Association. Complete the blanks. LO.1
Tom Downes, a friend of yours, had built up a thriving business selling computer systems. He is now in need of more finance and is thinking of forming his business into a company. He asks you for your advice.Briefly list the points you would bring to his attention.Let's now look at some detailed
Complete the blanks in the following:There is a ___ rate of ___ payable on preference shares, but the amount payable. on shares may vary from year to year. LO.1
Tick the correct answer.Coalmans Ltd has authorised share capital of 10,000 £1 ordinary shares of which 5,000 have been issued and fully paid for. The directors proposed a dividend of 20%. How much:(a) will the company pay in total?(i) £1,000(ii) £2,000(iii) £3,000(b) will the holder of one
To summarise the main features of debentures complete the blanks in the following paragraph:A is the written acknowledgement of a debt. Interest on debentures is charged at a rate. Debenture holders are to the company, not shareholders or owners of it. They will normally be provided with for the
Trading and profit and loss account. The only differences here will be the introduction of certain types of expenses peculiar to limited companies, e.g. directors' salaries and debenture interest. LO.1
Profit and loss appropriation account. As with a partnership, because there is more than one owner of the business, there must be a statement to show how the profits of the business are to be used. In the case of a company, the profits are either:(a) distributed- paid out in the form of dividends
Balance sheet. In the assets part of the balance sheet there will be no difference. In the finance part the balance sheet must show:(a) the authorised share capital and the issued share capital separately, unless all of the authorised share capital has been issued, when the two can be combined.{b)
Indicate where the following items would appear in the final accounts of a limited company, using 'P' for profit and loss account. 'A' for appropriation account and 'BS' for balance sheet. Some items may appear twice.(a) Debenture interest paid (b) Proposed dividend(c) Transfer to general reserve
Indicate whether or not the following items are a true description of the reserves of a limited company. Reserves represent:(a) the profits of the company which are held within it and not distributed to shareholders True/False(b) the cash which the business has available to use. True/False(c)
The net profit for the year was £60,000. Out of this Joe proposed to transfer £10 000 to a general reserve, to pay the preference dividend and an ordinary share dividend of 10%. LO.1
The company had fixed assets of £141 ,000, current assets totalling£70,000 and its current liabilities for creditors and expenses were£30,000.The final accounts at the end of the company's first year would appear as in Figure 13.1. Check them through carefully together with the notes which I've
The Clarke Welding Company Ltd has an authorised capital of£200,000, split into 150,000 £1 ordinary shares and 50,000 6% £1 preference shares. On 1 January 19-8 the company had issued 100,000 ordinary shares and all the preference shares. At 1 January the company's fixed assets were valued at
During the year ended 31 December 19-8 the Clarke Welding Company Ltd made a net profit of £50,000. The directors propose to pay the preference share dividend and a 10% dividend on the ordinary shares. The fixed assets at 31 December were valued at £150,000, the current assets £90,000 and
The Marston Co. Ltd has an authorised capital of £400,000 dividend into 300,000 £1 ordinary shares and 100,000 6% £1 preference shares.Of these, 60,000 preference shares and 250,000 ordinary shares have been issued and fully paid.At the end of the year (31 December) the following information was
The following trial balance was obtained from the books of Florists Ltd at 31 December:£1 debentures Freehold buildings at cost 80,000 Purchases 91,000 Sales Debtors and creditors 8,900 Rent receivable General salaries 18,000 Rates and insurance 500 Motor expenses 1,000 Directors' salaries 19,000
The following trial balance was extracted from the books of Shorts Ltd as at 30 June 19-9:Share capital - ordinary shares 10% debentures Building at cost Purchases and sales Debtors and creditors Rent receivable Salaries Rates and insurance Motor vehicle expenses Directors' salaries General
A new company began trading on 1 January 1986. Its ftxed assets included new machinery which it had purchased for £13,000. This machinery had a life expectancy of eight years with an estimated scrap value of £1 ,000 after that time.(a) Calculate the amount of depreciation to be written off each
Complete the following depreciation schedule for machinery X, using the reducing instalment method with a fixed rate of 10%. Depreciation should be calculated to the nearest £1.Machinery X: cost £13,000 Year 1986 1987 1988 1989 1990 Depn for the year ended 31 Dec.£1,300 1,170 Accumulated depn up
Complete the accounts relating to the machinery and its depreciation up to the end of December 1988.LO.1
Complete the accounts relating to the machinery and its depreciation up to the end of December 1988. This time, use the provision for depreciation method.LO.1
The same business bought a motor vehicle for £5,000 on 1 Apri11989. It was decided to depreciate it by 30% per annum using the reducing instalment method. Calculate the amount of depreciation to be written off in the financial year ended 31 December 1989.Take care when calculating these
Examine the following trial balance of M. Trigg, retailer, taken from his books at 30 June 1990.Fixed assets (at cost)Provision for depn on fixed assets Stock Debtors Provision for bad debts Bank Creditors Cash Capital Sales Purchases Wages Drawings General expenses£ dr 40,000 8,000 1,500 200
Complete the blanks in the following sentence to produce a definition of a partnership.A partnership has or owners who each provide for the business and are usually _____ _ liable for the debts of the business. LO.1
Which of the following are partnerships? Tick the correct items.(a) Albert Haddock, fishmonger(b) Cook, Cook and Cook, solicitors(c) McEnroe and Co, butchers(d) Easthills Sports and Social Club(e) United Consolidated PLC(f) Smith and Jones The second set of regulations governs the partnership's
What is a partnership? Give a brief definition. LO.1
Harry Clipper has worked for thirty years as a barber in Oldtown.Whilst he still has a regular number of older people as his customers, his business has declined steadily over the last few years. Some of his customers have died and a lot of other trade has been taken by a new and more modern
List the main points you would wish to see covered in a partnership agreement if you decided to go into a partnership with a friend in setting up and running a shop selling small computers. LO.1
If there is no partnership agreement then the Partnership Act 1890 states that:(a) Salaries and interest on capital are allowed True/False(b) profits and losses are to be shared equally True/False(c) loans to the partnership by a partner receive interest of 10% per year True/False Before moving on
John and Kevin will each need separate ledger accounts to record the fixed capitals they have contributed, the earnings they have made from the business and the money which they have drawn out. Obviously it would be very confusing and could lead to errors if this information was all in one account.
The fixed capital which they have each agreed to put in should be kept separate from the increase in capital which occurs when the profits earned by each partner are greater than their drawings. (This also helps to highlight when a partner's drawings are greater than the profits he has earned!)
We now need t_ accounts to record the fixed ________ contributions which we've each agreed to put in. LO.1
We need t accounts to show what we've each earned from the partnership and what we have actually taken out in LO.1
When I prepare the final accounts, I will have to do a profit and loss ________ account to show how the profits or losses have been shared. LO.1
Mary and Liz are partners in a boutique business. They agreed to share profits in the ratio 4:1 because Mary provided most of the capital. In their first year the business made a net profit of £4,500. How much does each partner receive? LO.1
In their second year they changed their ratios to 4:3 when Liz provided more capital. Their business made a net profit of £7,700. How much does each receive? LO.1
Capital accounts: a separate account is opened for each partner and credited with the relevant capital contribution. LO.1
Current accounts:(a) throughout the year the drawings made by the partners are debited to their current account e.g. DR Current A/C, CR Bank when a partner takes money out of the business for his own personal use;(b) at the end of the financial year, the current account is credited with the
Profit and loss appropriation account:(a) this account appears below the profit and loss account in the final accounts and begins with the net profit brought down from that account - this is the total amount which is available for distribution;(b) the debit side shows the split of the profit
Steve and Roger are in partnership with capital contributions of£10,000 and £7,200 respectively. The partnership agreement provides for:• salaries of £2,400 per year to Steve and £1,800 to Roger.• interest on capital of 10% per year• a profit sharing ratio of 2: 1 Select the correct
March to 30 June?i £600 ii £800 iii £750 iv £1,000(b) How much interest on capital would Roger be entitled to for a period of five months?i £330 ii £360 iii£240 iv £300(c) How much profit share would Steve receive in a year when the net profit was £14,920?i £6,000 ii £5,920 iii £3,000
Pete Thomas and Frank Lock go into partnership whereby they provide capital of £6,000 and £5,000 respectively on 1 April. Their partnership agreement states that:• Frank should receive a salary of £800 per year• interest on capital should be given of 7% per year• the profit-sharing ratio
Dave, John and Jim have joined Fred in an electrical retail business.How many capital and current accounts will there be? Briefly note the information that you would expect to find in each type of account and explain why separate capital and current accounts are kept. LO.1
Jane and Jill began a partnership running a health food shop on 1 January when they contributed £3,000 and £2,000 respectively. Their partnership agreement stated that interest on capital of 10% per year should be given and that the profit-sharing ratio would be in the same ratio as their capital
December the business makes a net profit of £6,000 and the partners take out drawings of £1,400 (Jane) and £1,100 (Jill).Complete the capital and current accounts of the partners, the profit and loss appropriation account for the year, and show the capital section of the final balance sheet. LO.1
Bill and Ben trade in partnership under the name 'The Master Potters'.Their partnership agreement allows for the payment of interest on capital at 12% per year and a salary to Ben of £2,000 per year. The remainder, whether profit or loss, is to be apportioned in the ratio of Bill 3: Ben 1.Using

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Mastering Accounting 1st Edition George Bright, Michael Herbert - Solutions

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