Question 1 (5 marks)

Evans Ltd was started on 1 July 2021 with an investment of $150 000 cash. Following are the assets and liabilities of the company on 30 June 2022, and the revenues and expenses for the year of operations.

Cash	$155 100		Bank loan	$90 000
Accounts receivable	43 000		Rent expense	37 500
Equipment (net)	120 000		Repair expense	700
Service revenue	250 000		Office expense	68 000
Advertising expense	16 500		Depreciation expense	30 000
Accounts payable	24 800		Insurance expense	24 000

No further shares were issued during the year, but a dividend of $20 000 in cash was paid.

Required:

Prepare a statement of profit or loss statement. (2 marks)

Prepare a calculation of retained earnings for the year. (1 marks)

Prepare a statement of financial position as at 30 June 2022. (2 marks)

Question 2 (5 marks)

Selected transactions from the journal of Ink Pad Printers Ltd during its first month of operations are presented here:

Required:

Post the transactions to T accounts.

Prepare a trial balance as at 31 August 2022

Question 3 (5 marks)

Vivian West commenced a dental practice on 1 January 2022. During the first month of operations the following transactions occurred:

Performed services for patients and, at 31 January, $1500 was earned for these services but not yet billed to the patients.

Electricity expense incurred and not paid or recorded prior to 31 January, $1040.

Purchased dental equipment on 1 January 2022 for $160 000, paying $40 000 in cash and signing a $120 000 interest-bearing note payable. (Interest is payable on 31 December 2022.) The equipment depreciates at $1600 per month and interest on the note is $500 per month.

Purchased a 1-year insurance policy on 1 January 2022 for $24 000.

Purchased $3200 of dental supplies (recorded as an asset). On 31 January, $700 worth of supplies was still on hand.

Required:

Prepare the adjusting entries on 31 January 2022.

Question 4 (5 marks)

Shoe City Pty Ltds bank reconciliation clerk is unable to reconcile the bank balance at 31 January. The balance of the cash at bank account, before any entries for transactions initiated by the bank, was $4770.20 in the company records.

The clerks attempt at the bank reconciliation statement is as follows:

Cash balance as per bank statement Add: Dishonoured cheque Unpresented cheques Less: Outstanding deposits Bank charges Cash balance as per company records

$4 392.20 Cr 516.00 Cr 5 876.00 Cr 6 392 708.00 Cr 30.00 Cr 738 $5 046.20 Cr

Cash balance as per bank statement	$4 392.20 Cr
Add: Dishonoured cheque	516.00 Cr
Less: Bank charges	30.00 Cr
Less: Outstanding deposits	708.00 Cr
Add: Unpresented cheques	5 876.00 Cr
Cash balance as per company records	$5 046.20 Cr

Required:

Prepare a correct bank reconciliation. (3 marks)

Journalise the entries required by the reconciliation. (2 marks)