Requirement 1

Bank service charge

Deposit in transit
Book error

TOTAL

Requirement 2

Dec 26 Cash

Dec 31 Unearned revenue

Requirement 3

Nov 30 Prepaid expenses - Insurance

Dec 31 Insurance expense

Requirement 4

Dec 12 Investment in stock, 100 @ 5

Dec 24 Cash

Dec 31 Short term investment

Dec 31 As share price increased, no

Requirement 5

Nov 1 Notes receivable (90 days, 6%

Dec 31 Interest receivable

 Requirement 1

Revenues

Net sales

Requirement 2

Allowance for uncol account

1% of 300000

Dec 31 Uncollectible account expens

Beginning inventory

Purchases
Feb 4
March 14
2% disc if less than 10 days

Requirement 1

Cash (or Accounts Receiv)

COGS
Requirement 2

Inventory

Accounts payable
Requirement 1
Book Bank
33690 16380
Bank service charge -40 Miscelaneous expense (bank fee) 40
Deposit in transit 17150 Cash
Book error -120
Rent expense 120
33530 33530 Cash

Requirement 2
Debit Credit
3000
Unearned revenue 3000

Unearned revenue 250

Service revenue 250

Requirement 3

Prepaid expenses - Insurance premium 2400

Cash 2400

Insurance expense 100

Prepaid expenses - Insurance premium 100

Requirement 4

Investment in stock, 100 @ 50 5000

Cash 5000

3360
Investment in stock, 60 @ 50 3000
Gain on sale of invesment 360

Short term investment 280 NOT PART OF THE EXAM

Unrealised gain on investment 280

As share price increased, no impairement is needed

Requirement 5

Notes receivable (90 days, 6%) 100000

Service revenue 100000

Interest receivable 1000

Interest revenue 1000
Requirement 1 Requirement 3

900000 Allowance for uncol accounts 4650

Aging method
Sold with discount 300000
Paid 280000 Dec 31 Uncollectible account expense 3650
Discount for early pa -5600 Allowance for uncol
Not paid 20000

Sold with credit card 200000 Requirement 4

Credit card fee -6000 OPEX!!! % of sales
Accounts receivable 500
Sold and paid in cash 400000 Left from 2005

894400 Accounts receivable 2006 20000

Allowance for uncol account 4000

Requirement 2 (1000 left from 2005)
Net realisable value of accounts receivable 16500
Allowance for uncol accounts 3000
1% of 300000

Uncollectible account expense 3000 2006 Allowance for uncol 1500

Allowance for uncol 3000 Accounts receivable

units Price
Beginning inventory 100 @ 10 1000

COGS
400 @ 11 4400 Mar 2 350 @
150 @ 12 1800 Average price 10.8
2% disc if less than 10 days

Requirement 1 Requirement 3
Debit Credit
Cash (or Accounts Receiv) 5250 Sales revenue 5250
Sales revenue 5250 COGS 3780
Gross profit 1470
3780
Inventory 3780
Requirement 2 Requirement 4

1800 Inventory 3384

Accounts payable 1800

Accounts payable 1800

Cash 1764
Inventory 36
 40

120
 3650

Aging
500

20000

4650

15850

Write-off
1500

15 5250
 Income statement

Sales revenue 83720

-COGS 53655
Gross profit 30065
-OPEX 5015
Operating profit (EBIT 25050

Balance sheet

Assets Liabilities

Current assets Accounts payable 36000

Cash 77305
Prepaid rent 6000
Inventory 31845 Equity
Accounts receivable 16400
Paid-in capital 100000
Long-term assets RE 25050
Furniture (-deprec) 29500

Total 161050 161050

Net profil 200000

Equity

Ordinary shares 52500

Less: treasury -6000
46500

Preference shares 100000

Share premium 219600
RE 169500

TOTAL 535600
 Debit Credit
a Dec 31 Salary expenses 7000
Salary payable 7000
Salary expenses 4/5 of total week

Debit Credit
b Dec 31 Depreciation expenses - Equip 4000 SLD
Accummulated deprec - Equip 4000
Depreciation of equipment for year 2015

Debit Credit
c Dec 31 Unearned revenue 100000
Service revenue 100000
Accured revenue 20 out of 24 homes

Debit Credit
d Dec 31 Insurance expense 600
Pre-paid expense insurance 600
Deferred expense for insurance

e Dec 29 Accounts receivable 7000

Service revenue 7000
Service fully delivered but not paid

Jan 1 Cash 100000 Purchases

Paid-in capital 100000 Jan 5
Jan 26
Jan 1 Prepaid rent 9000
Cash 9000 Sales
prepaid for 3 months Jan 19
Jan 28
Jan 1 Furniture 30000
Cash 30000 Averag on 27
Furniture
Purchase 1
Jan 5 Inventory 49500 Sale 19
Cash 49500 Purchase 26
Purchase of goods including transp. costs and 1% disc Sales 28

Jan 19 Cash 67320

Sales discount 680 Contra account of sales revenue
Sales revenue 68000
Delivery expense 1500 OPEX
Cash 1500
Sale with 1% disc and trasnport expense

COGS 42075
 Inventory 42075

Jan 26 Inventory 36000

Accounts Payable 36000
Purchase of goods on account

Jan 28 Accounts receivable 16400

Sales revenue 16400

COGS 11580
Inventory 11580

Jan 31 Bank service charge expense 15 OPEX

Cash 15

Jan 31 Rent expenses 3000 OPEX

Prepaid rent 3000
1 month rental incurred

Jan 31 Depreciation expense - Furnitur 500 OPEX

Accum deprec - Furniture 500
Depreciation corresponding to 1 month DDB

Inventory 31845 Since net realizable value is higher we keep the lowest (IFRS rule)
33000

Requirement 1

Shares authorised:
50,000 ordinary of 5 $ par
20,000 preference of 100 $ par, annual dividend of 8% per share

Ordinary shares
Jan 1 Issued 10,000 ordinary shares par 5$ 50000
Sep 1 Issued 500 shares as dividend payment 2500

Preference shares
Jan 1 Issued 1,000 preference shares par 100$ 100000

Share premium
Jan 1 Issued 10,000 ordinary shares at 15$ 200000
Jan 1 Issued 1,000 preference shares at 110 $ 10000
 Sep 1 Dividend payment 10000
Nov 1 Less, loss from treasury shares -400

Treasury shares 10000

Less sold 4000
6000

Debit Credit
a) Jan 1 Cash 360000
Ordinary shares 50000
Share premium, ordinary 200000
Preference shares 100000
Share premium, preference 10000
Issued 10,000 ordinary shares at 15$
Issued 1,000 preference shaers at 110 $

b) Jul 1 Retained Earnings 18000

Dividend payable (1$ per ordinary shares) 10000
Dividend payable (8% pref shares) 8000
Declared cash dividend

c) Aug 1 Dividend payable (1$ per ordinary shares) 10000

Dividend payable (8% pref shares) 8000
Cash 18000
Paid cash dividend

d) Sep 1 Retained Earnings 12500

Share dividend, ordinary share 2500
Share dividend, ordinnary share premium 10000
Declared and paid share dividend

e) Oct 1 Treasury shares 10000

Cash 10000
Buyback at 20 $ of 500 shares ordinary

f) Nov 1 Cash 3600

Share premium 400
Treasury shares 4000
Buyback at 18 $ of 200 shares ordinary
 4000

100000

600

Units @ Price / unit

100 495 49500
60 600 36000

85 792 67320
20 820 16400

579
Price Number Avg price
100 495 49500 49500 100 495
85 495 42075 7425 15 495
60 600 36000 43425 75 579
20 579 11580 31845 55 579

of sales revenue
 6000 p. year

lowest (IFRS rule)

Contra account of ordinary shares

#shares
500
 Assumed that they have changed the dep
Initial value DDB rate
1 132000 0.2
2 0.2
3 0.2
4 0.2
5 0.2
6 0.2
7 0.2
8 0.2
9 0.2
10 0.2

1.1 Depreciation expense-Equip

DDB depreciation

2.1 Unearned revenue

Revenues for the 1200 at 30

2.2 Adv. Expense

90

2.3 Salary expense

Admissions revenue
Advertising expense
Salaries and wages expenses

Current assets
Notes receivable 36000
Accounts receivable 182100
Less: Allowance for doubtfull accounts 17300
200800
1. Cash 98000
Accounts receivable

Cash 39600
Sales discounts 400
Accoutns receivable

2. Interest receivable (4%) 360

Interest revenue

3. Allowance for doubtful account 17500

Accounts receivable

4. Doubful accounts expense 15200

15000 Allowance for doubful accounts
Aged account receivables
hey have changed the depreciation method
Initial Book value Depreciation End Book Value Acm depre
132000 26400 105600 26400
105600 21120 84480 47520
84480 16896 67584 64416
67584 13517 54067 77933
54067 10813 43254 88746
43254 8651 34603 97397
34603 6921 27682 104318
27682 5536 22146 109854
22146 4429 17717 114283
17717 -6283 24000 108000

preciation expense-Equip 26400

Acc. Depreciation-Equip 26400
B depreciation

earned revenue 36000

Admis reven. 36000
venues for the 1200 at 30 $

379
Prepaid advertising expe 379
0.344444444444 378.8888889

ary expense 4700

Salary payable 4700

missions revenue 416000

vertising expense 14059
aries and wages expenses 55300
98000

40000

360

17500

15200