Q.1. NP Enterprises operates several miniature golf courses, all of which are located on rented land within city parks. Shown below is the company’s adjusted trial balance at December 31, 2019. The company closed its accounts at the end of each calendar year.

    NP Enterprises

Trial Balance

Dec 31, 2019

Cash	Rs        41,100
Accounts Receivable	7,800
Buildings	180,000
Accumulated Depreciation: Buildings		Rs      36,000
Golf Course Structures	270,000
Accumulated Depreciation: Golf Course Structures		90,000
Account Payable		23,100
Salaries Payables		6,900
Nick Palmer, Capital (December 31, 2018)		331,560
Nick Palmer, Drawing	75,000
Admissions Revenue		576,000
Advertising Expense	45,000
Rent expense	108,000
Repairs Expense	15,600
Salaries Expense	237,000
Light & Power Expense	13,500
Depreciation Expense: Buildings	18,000
Depreciation Expense: Golf Course Structures	45,000
Insurance Expense	7,560
	Rs   1,063,560	Rs 1,063,560

Instructions: (10 Marks)

How the useful life of Buildings and of Golf Course Structures can be calculated based on the above trial balance (Show the calculation and the explain the answer in your own words) 

Prepare an income statement and a statement of owner’s equity for the year ended December 31, 2019? Also explain the impact on net income upon the increase in company’s revenue, and the impact on company’s capital upon the increase of drawings?

Prepare a balance sheet as of December 31, 2019? Explain the concept of accumulated depreciation in the balance sheet of the company in your own words? 

Answer rating: 100% (QA)

a The useful life can be calculated by dividing the cost of the asst by the annual asset depreciatio... View the full answer