Fred Jones started a consulting business on 1 March 2016. During the period up to 30 June

Question:

Fred Jones started a consulting business on 1 March 2016. During the period up to 30 June 2016, the following transactions occurred:
1. Fred put $10 000 of his own money into the business.
2. He borrowed $30 000 from the bank at 10 per cent per annum for one year with interest to be repaid at the end of the loan.
3. He sent bills for $35 000 to customers for work performed. By 30 June he had received $30 000 and expected the other $5000 in July.
4. He bought a computer for $8100 that has an expected useful life of three years.
5. He paid $12 000 in wages.
6. He paid other expenses of $20 000.
7. He received a $500 bill for advertising (appeared in newspapers in May; will be paid in July).
Using the concepts of accrual accounting, calculate Fred's profit for the four months ending 30 June 2016.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  answer-question

Financial Accounting An Integrated Approach

ISBN: 9780170349680

6th Edition

Authors: Ken Trotman, Michael Gibbins, Elizabeth Carson

Question Posted: