Adam Mullings is a retailer who had not kept a full set of accounting records. The...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Adam Mullings is a retailer who had not kept a full set of accounting records. The following is a summary of her bank transactions in her cash book for the year ended December 31, 2020, Receipts Details Trade Receivables Cash sales Loan 2 3 4 6 S 1,38,500 Trade payables 950,080 Rent 300,000 Electricity You are given the following additional information: 1 7 2.634.580 Details Loan principal Water Salary Payments Accounting fee (2019) Telephone Computer equipment Drawings Cash purchases S 745,540 312,000 40,720 100,000 13,780 613,600 32,000 23,080 300,000 4,000 301,440 2.486.160 Favourable bank balance per cash book on January 1, 2020 amounting to $106,920 During the financial year discounts allowed by trade payables amounted to $440 and those allowed to trade receivables $800. During the financial year goods returned by trade receivables amounted to $1,600 and goods returned to trade payables amounted to $6,900. During the financial year a trade debt of $1,200 owed by Lottie Graham was off-set against the $2,000 owing to the same Lottie Graham a trade creditor. Janet Hutton, a cash sales customer returned goods during the financial year amounting to $700, Janet Hutton was repaid her $700 from the daily cash sales. Adam Mullings grants a credit period of 30 days to trade receivables. The closing trade receivables balance includes a debt of $800 from Fanon Browning. The goods were sold to Fanon in November 2019. Fanon went to the United States of America for a two (2) weeks' vacation in February 2020, On December 31, 2020 Fanon was still in the USA. The amount of cash received from cash sales were all paid into the bank with the exception of: $2,800 Plumbing repairs $4,000 Donation to community Christmas party 8 9 10 Adam Mullings keeps a cash float of $10,000 for change in his retail outlet. Adam Mullings agreed to pay his daughter Virginia, a commission of 5% of the net profit after charging such commission, for working in the retail outlet on Sundays. (Round to the nearest dollar) The computer equipment was purchased on April 9, 2020. Depreciation should be calculated on the computer equipment on the straight line basis at a rate of 20% per annum on cost. It is the policy of the business to charge a full month's depreciation in the month of acquisition or disposal. 11 The accounting fee for preparing the 2020 financial statements is estimated at $35,200. 12 During the year, Adam Mullings puts a further $135,000 into the bank account of the business to shore up working capital. 13 On April 1, 2020 Adam Mullings received a loan of $300,000 from his mother Mara Mullings. Interest should be charged on the reducing balance at a rate of 10% per annum. The first interest payment is to be made on March 31, 2021. The principal is being paid in equal instalments of $100,000 on September 30, 2021, September 30, 2022 and September 30, 2023. 14 Inventory Furniture (at cost) Allowance for depreciation - furniture Trade receivables Trade payables Rent paid in advance Electricity owing December 31, 2019 138,400 100,000 30,000 6,900 1,420 3,500 December 31, 2020 77,300 100,000 40,000 2,360 5,200 24,000 3,660 Required: a) Prepare the Trade Debtors Control Account b) Prepare the Trade Creditors Control Account c) Prepare the Statement of Affairs as at December 31, 2019 d) Prepare the Income Statement for the year ended December 31, 2020 (10 marks) (8 marks) (15 marks) (25 marks) e) Prepare the Statement of changes in owner's equity for the year ended 31 December, 2020. (7 marks) f) Prepare a COMPARATIVE Statement of Financial Position as at 31 December, 2020. (25 marks) g) Prepare a Statement of Cash Flow for the year ended 31 December, 2020 (25 marks) Adam Mullings is a retailer who had not kept a full set of accounting records. The following is a summary of her bank transactions in her cash book for the year ended December 31, 2020, Receipts Details Trade Receivables Cash sales Loan 2 3 4 6 S 1,38,500 Trade payables 950,080 Rent 300,000 Electricity You are given the following additional information: 1 7 2.634.580 Details Loan principal Water Salary Payments Accounting fee (2019) Telephone Computer equipment Drawings Cash purchases S 745,540 312,000 40,720 100,000 13,780 613,600 32,000 23,080 300,000 4,000 301,440 2.486.160 Favourable bank balance per cash book on January 1, 2020 amounting to $106,920 During the financial year discounts allowed by trade payables amounted to $440 and those allowed to trade receivables $800. During the financial year goods returned by trade receivables amounted to $1,600 and goods returned to trade payables amounted to $6,900. During the financial year a trade debt of $1,200 owed by Lottie Graham was off-set against the $2,000 owing to the same Lottie Graham a trade creditor. Janet Hutton, a cash sales customer returned goods during the financial year amounting to $700, Janet Hutton was repaid her $700 from the daily cash sales. Adam Mullings grants a credit period of 30 days to trade receivables. The closing trade receivables balance includes a debt of $800 from Fanon Browning. The goods were sold to Fanon in November 2019. Fanon went to the United States of America for a two (2) weeks' vacation in February 2020, On December 31, 2020 Fanon was still in the USA. The amount of cash received from cash sales were all paid into the bank with the exception of: $2,800 Plumbing repairs $4,000 Donation to community Christmas party 8 9 10 Adam Mullings keeps a cash float of $10,000 for change in his retail outlet. Adam Mullings agreed to pay his daughter Virginia, a commission of 5% of the net profit after charging such commission, for working in the retail outlet on Sundays. (Round to the nearest dollar) The computer equipment was purchased on April 9, 2020. Depreciation should be calculated on the computer equipment on the straight line basis at a rate of 20% per annum on cost. It is the policy of the business to charge a full month's depreciation in the month of acquisition or disposal. 11 The accounting fee for preparing the 2020 financial statements is estimated at $35,200. 12 During the year, Adam Mullings puts a further $135,000 into the bank account of the business to shore up working capital. 13 On April 1, 2020 Adam Mullings received a loan of $300,000 from his mother Mara Mullings. Interest should be charged on the reducing balance at a rate of 10% per annum. The first interest payment is to be made on March 31, 2021. The principal is being paid in equal instalments of $100,000 on September 30, 2021, September 30, 2022 and September 30, 2023. 14 Inventory Furniture (at cost) Allowance for depreciation - furniture Trade receivables Trade payables Rent paid in advance Electricity owing December 31, 2019 138,400 100,000 30,000 6,900 1,420 3,500 December 31, 2020 77,300 100,000 40,000 2,360 5,200 24,000 3,660 Required: a) Prepare the Trade Debtors Control Account b) Prepare the Trade Creditors Control Account c) Prepare the Statement of Affairs as at December 31, 2019 d) Prepare the Income Statement for the year ended December 31, 2020 (10 marks) (8 marks) (15 marks) (25 marks) e) Prepare the Statement of changes in owner's equity for the year ended 31 December, 2020. (7 marks) f) Prepare a COMPARATIVE Statement of Financial Position as at 31 December, 2020. (25 marks) g) Prepare a Statement of Cash Flow for the year ended 31 December, 2020 (25 marks)
Expert Answer:
Answer rating: 100% (QA)
a Trade Debtors Control Account Date Particulars Details Debit Credit Balance 01012020 Balance bd 106920 Cash Sales 138500 138500 245420 Discounts Allowed 800 244620 Goods Returned 1600 1600 243020 Se... View the full answer
Related Book For
Understanding Financial Accounting
ISBN: 9781119406921
2nd Canadian Edition
Authors: Christopher D. Burnley
Posted Date:
Students also viewed these accounting questions
-
The statement of cash flows for the year ended December 31, 2013, for Bronco Metals is presented below. Required: Prepare the statement of cash flows assuming that Bronco prepares its financial...
-
In its income statement for the year ended December 31, 2010, Maris Company reported the following condensed data. Instructions (a) Prepare a multiple-step income statement. (b) Calculate the profit...
-
In its income statement for the year ended December 31, 2014, Michael Company reported the following condensed data. Instructions (a) Prepare a multiple-step income statement. (b) Prepare a...
-
33. Monker Dining Room Furniture manufactures two models of dining table sets: Traditional brand Contemporary. Manufacturing requirements are as follows: um boxi mod sq to get YTO TRADITIONAL...
-
Actuary and trustee reports indicate the following changes in the PBO and plan assets of Douglas-Roberts Industries during 2011: Required: 1. Determine Douglas-Roberts' pension expense for 2011 and...
-
For the system shown in Fig. 3.49, \(x\) and \(y\) denote, respectively, the absolute displacements of the mass \(m\) and the end \(Q\) of the dashpot \(c_{1}\). (a) Derive the equation of motion of...
-
To whom are reports on compliance with laws and regulations typically distributed?
-
ANALYSIS OF PROFITABILITY Based on the financial statement data in Exercise 24-1A, compute the following profitability measures for 20-2 (round all calculations to two decimal places): (a) profit...
-
In three hundred words or more please describe your culture in terms of Hofstede's six cultural dimensions. Where does your culture typically rank within each of these six dimensions? it should be...
-
Jake, Inc., is a manufacturer that just completed the first month of a new fiscal year. After reviewing the variances of actual results from the master budget, the finance department provided an...
-
Great Guard, which used a standard cost accounting system, manufactured 180,000 boat fenders during the year, using 1,490,000 feet of extruded vinyl purchased at $1.45 per foot. Production required...
-
Distinguish between set representations that are implicit and those that are explicit.
-
Add a Boolean member function IsBST to the class TreeType that determines whether a binary tree is a binary search tree. comments. 2. Write a recursive implementation of this function.
-
Modify the DeleteNode function so that it uses the immediate successor (rather than the predecessor) of the value to be deleted in the case of deleting a node with two children. You should call the...
-
True or false? 1. Invoking the delete function in this chapter might create a tree with more levels than the original tree had. 2. A preorder traversal processes the nodes in a tree in the exact...
-
How would you modify the radix sort algorithm to sort the list in descending order?
-
According to LinkedIn What can someone with the Account Manager role do as a Campaign Manager? Explain
-
In 1995 Miguel purchased a home for $130,000. In 2000 he sold it for $170,000 and immediately purchased another one for $180,000, which he sold in 2007 for $235,000. How much taxable capital gain, if...
-
Majestic Equipment Sales Company, which sells only on account, had a $120,000 balance in its Accounts Receivable and a $4,200 balance in its Allowance for Doubtful Accounts on December 31, 2019....
-
Brick Brewing Co. Limited is a Canadian-owned brewery with its head office in Kitchener, Ontario. The company brews, sells, and markets its products under the Waterloo, Laker, Red Baron, Red Cap, and...
-
You are in a board meeting when one of your fellow board members stated: I would prefer to see the statement of income prepared without any depreciation expense. When I review this statement, I...
-
Find the boundaries for each measurement. a. 32.4 feet b. 86 Fahrenheit c. 27.54 mg/dl
-
State which sampling method was used. a. Out of 14 banks in a city, a researcher selects one bank and records the number of savings deposits made in a one-day period. b. A researcher divides a group...
-
Read the following on attendance and grades, and answer the questions. A study conducted at Manatee Community College revealed that students who attended class 95 to 100% of the time usually received...
Study smarter with the SolutionInn App