Date Details DR CR

31-Aug-16 Insurance Expense 1,125 3/12 x 4500

Prepaid Insurance 1,125

31-Aug-16 Supplies expense 2,150 2600-450

Supplies 2,150

Cottages
31-Aug-16 Dep'n expense - cottages 1,080 Cost - Salvage = depreciable cost
Acc. Dep'n cottages 1,080 120000-(10%*120000)=108,000

DC/ useful life = annual dep'n

108000/25 4320

3 mth dep'n :
4320*3/12

31-Aug-16 Dep'n expense - furniture 360 Furniture

Acc. Dep'n furniture 360 Cost - Salvage = depreciable cost
16000-(10%*16000)=14,400

DC/ useful life = annual dep'n

14400/10 1440

3 mth dep'n :
1440*3/12

31-Aug-16 Advanced rent revenue 3,800

Rent revenue 3,800

31-Aug-16 Salaries expense 375

Salaries payable 375

31-Aug-16 Accounts receivable 800

Rent revenue 800
Income statement
Rent Revenue 80,800

Salaries expense 45,175

Utilities expense 9,200
Supplies expense 2,150
Dep'n expense 1,440
Maintenance expense 3,600
Insurance expense 1,125 62,690

Net Income 18,110

Balance sheet
Current assets
Cash 19,600
Accounts receivable 800
Prepaid Insurance 3,375
Supplies 450
Total current assets 24,225

Property, Plant & equipment

Land 20,000
Cottages 120,000
Furniture 16,000
less: acc. Dep'n (1,440)
Total Property, Plant and equipment 154,560

Total assets 178,785

Current liabilities
Accounts payable 4,500
Salaries payable 375
Advanced rent revenue 800
5,675

Long-term liability : mortgage payable 60,000

Total liabilities 65,675

Shareholder's equity
Common stock 100,000
Retained earnings 13,110
Total shareholder's equity 113,110

Total shareholder's equity andliabilities 178,785

Date Description Amount Cost Total
4-Feb Purchases 40 10 $ 400.00
6-Mar Purchases 20 12 $ 240.00
9-Oct Purchases 10 15 $ 150.00
70 $ 790.00

Units sold 57
Units left 13 ending inventory

FIFO
9-Oct 10 15 150
6-Mar 3 12 36
ending inventory 186

cost of goods available for sale $ 790.00

ending inventory $ (186.00)
cost of goods sold $ 604.00

LIFO
4-Feb 13 10 130

ending inventory 130

cost of goods available for sale $ 790.00

ending inventory $ (130.00)
cost of goods sold $ 660.00

AVCO

AVCO cost per unit $ 11.29 (COGAFS/units available for sale) 790/70

ending inventory 13 $ 11.29 $ 146.71

cost of goods available for sale $ 790.00

13 $ (146.71)
cost of goods sold $ 643.29
Balance per bank 4,270.00 Date Details
less: outstanding cheques (2,500.00) Feb 28 2016 Cash
add: deposits intransit 1,650.00 Interest revenue
Adjusted balance per bank 3,420.00
Feb 28 2016 Cash
Acc receivable

Feb 28 2016 Acc payable

Cash
Balance per books 4,000.00
add: interest 250 Feb 28 2016 Bank charges
customer deposit 170 Cash
420.00

less: standing order -700 Feb 28 2016 Acc payable

bank charges -160 Cash
rejected -140 (1,000.00)
3,420.00

-
 Dr Cr
250
250

170
170

700
700

160
160

140
140
Part b)

10,240-1,600 8,640

Entry:
Dr: Bad debt expense 8,640
Cr: Allowance for doubtful accounts

Part c)

10,240+1,600 11,840

Entry:
Dr: Bad debt expense 11,840
Cr: Allowance for doubtful accounts

Part d)
Dr: Allowance for doubtful accounts 3,200
Cr: Accounts receivable

Part e)
Dr: Accounts receivable 2,500
Cr: Allowance for doubtful accounts

Dr: Cash 2,500

Cr: Accounts receivable
 Part a)
Provision
1,440
2,560
1,600
2,560
2,080
10,240

8,640

11,840

3,200

2,500

2,500
1 a)
Machine 2
NBV beg of year rate Dep'n Acc dep'n NBV end of year
2014 30000 20% 6000 6000 24000
2015 24000 20% 4800 10800 19200
2016 19200 20% 2240 13040 16960 7/12 of the dep'n for the ye

Accumulated Dep'n 13,040

Loss on disposal 960
Cash 16,000 *the cash is the balancing figure
Machinery 30,000

1 b)

Machine 1
NBV beg of year rate Dep'n Acc dep'n NBV end of year
2014 20000 20% 4000 4000 16000
2015 16000 20% 3200 7200 12800
2016 12800 20% 2560 9760 10240

Dep'n expense 2,560

Acc Dep'n 2,560

Part A2
Cost $ 350,000
Useful life in units 1,000,000
Depreciable cost per unit 350,000/1,000000 $ 0.35
Units in first month 23,500
Depreciation cost first month 23,500*0.35 8225

Dep'n expense 8,225

Acc Dep'n 8,225

Part A3
Accumulated Dep'n 15,000
Cash 24,000
Machinery 36,000
Gain on disposal 3,000 *the gain is the balancing figure
7/12 of the dep'n for the year

ncing figure