ABC Ltd commenced its' food business on 1 January 2022. The following transactions occurred during the...
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ABC Ltd commenced its' food business on 1 January 2022. The following transactions occurred during the month of January. January 01 02 03 09 17 20 23 30 Owners invested $20,000 cash in the business Paid $1500 for one month of Office Rent in advance. Rent in advance is treated as a current asset. Purchased $18000 of inventory; 75% on credit; 25% in cash Sold goods for $20,000. 50% received in cash and the rest is on account. The cost of the goods sold was $15000. Paid $500 for employee salaries. Purchase furniture in cash $2000 Depreciation Expense for the fixed asset $200 Utility bill of $300 has been received but not paid yet Requirements: (1) Record the business transactions for January 2022 for the ABC using Accounting Equation. (Assets Liabilities + Owners Equity) (16 marks). (2) Prepare Income Statement for the month of January for ABC and calculate net profit/loss for the business. (5 marks) (3) What are the underlying limitations of accounting profit that ABC Ltd has calculated for their business operation? (4 marks) ABC Ltd commenced its' food business on 1 January 2022. The following transactions occurred during the month of January. January 01 02 03 09 17 20 23 30 Owners invested $20,000 cash in the business Paid $1500 for one month of Office Rent in advance. Rent in advance is treated as a current asset. Purchased $18000 of inventory; 75% on credit; 25% in cash Sold goods for $20,000. 50% received in cash and the rest is on account. The cost of the goods sold was $15000. Paid $500 for employee salaries. Purchase furniture in cash $2000 Depreciation Expense for the fixed asset $200 Utility bill of $300 has been received but not paid yet Requirements: (1) Record the business transactions for January 2022 for the ABC using Accounting Equation. (Assets Liabilities + Owners Equity) (16 marks). (2) Prepare Income Statement for the month of January for ABC and calculate net profit/loss for the business. (5 marks) (3) What are the underlying limitations of accounting profit that ABC Ltd has calculated for their business operation? (4 marks)
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Answer rating: 100% (QA)
1 Recording Business Transactions using Accounting Equation Heres how the transactions would be recorded for ABC Ltd using the Accounting Equation Jan ... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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