The following information contained the financial accounts of Excellence Grade College for the accounting year ended 31st
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Question:
The following information contained the financial accounts of Excellence Grade College for the accounting year ended 31st December 2020:
Account description | Amount $ |
Tuition fee earned | 2,000,000 |
Rental fee earned | 50,000 |
Rental of premise | 100,000 |
Staff salaries | 500,000 |
Air conditioner servicing fee | 24,000 |
Cash at bank | 20,000 |
Accounts payable | 20,000 |
Administrative expenses | 30,000 |
IT equipment | 300,000 |
Loss on disposal of assets | 500 |
Accrued expenses | 10,000 |
Prepaid expenses | 8,500 |
Rent deposit paid | 30,000 |
Accumulated depreciation of IT equipment | 60,000 |
Inventory | 7,500 |
Owner’s equity | ? |
Fee received in advance | 35,000 |
Fees overdue from students | 25,000 |
Bank loan | 200,000 |
Freehold property | 600,000 |
Required:
- Prepare a fully classified Balance Sheet for Excellence Grade College for the year ending 31st December 2020. Use the accounting equation to determine the value of Equity at the end of the year. (6 marks)
- Discuss and elaborate how ‘Fees Received in Advance’ meets the definition and recognition criteria according to the Conceptual Framework to allow it to be recorded in the Balance Sheet. (4 marks)
Related Book For
Accounting Business Reporting for Decision Making
ISBN: 9780730302414
4th edition
Authors: Jacqueline Birt, Keryn Chalmers, Albie Brooks, Suzanne Byrne, Judy Oliver
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