Question NO 1: On June 1, 2018, Regal Aviation purchased an Aircraft carrier costing Rs. 70,000.

At the
conclusion of its 6-year service life, the equipment is estimated to have a residual value of Rs. 8,000. The
machine is expected to be utilized for 7,000 hours during its useful life. The aircraft was used as follows:

Explain why different companies use different depreciation methods? Why it is important to maintain
the depreciation of the assets for the benefit of the company. .

• Prepare depreciation schedules on the basis of following methods.

1. Straight line Method:

2. Units of Output Method.

3. Double Declining Balance Method.

Question NO 2 You attended a marketing managers' session dedicated to a review on credit practices

as the accountant at Syed Brothers. You report to the conference that toxic assets are expected to cost
$40,000, and receivables at year-end total $1,50,000, less a $24,000 cushion for dubious accounts. Bad
debts are estimated to cost 2% of sales, according to the corporation Required: Explain why there is a
distinction between bad debts expenditure and the provision for questionable accounts, as well as
whether this is common or exceptional. And why do we have separate

accounts for bad debts costs and doubtful accounts allowance?

Question NO 3: On April 1, 2020, Hassan Sajjad Store Cash Book showed debit balances of Cash Rs. 1,750
and Bank Rs. 16,775. During the month of April following business was transacted. You are required

to prepare Cash Book?

April 2020

02 Purchased Office Type-Writer for Cash Rs. 950; Cash Sales Rs. 1,615.

07 Deposited Cash Rs. 700 to bank 10 Received from A. Hussain a check for Rs. 2,750 in part payment of
his account (not deposited)

16 Paid by check for merchandise purchased worth Rs. 1.265.

20 Deposited into Bank the check received from A. Hussain.

22 Received from customer a chock for Rs. 875 in full settlement of his accounts (not deposited) 24 Sold
merchandise to sweet Bros. for Rs 1,800 who paid by check which was deposited into bank

26 Paid creditor a Salman Rs. 1115 by check.

28 Deposited into Bank the check of customer of worth Rs. 1225 was dated 2nd April

29 Paid wages by cash Rs. 700 and salary Rs. 1500 by bank

30 Drew from Bank for Office uile Rs. 350 and Personal use R 200

Question NO 4: Mr Ali learned how to make cookies from his grandmother for most of his youth
They spent many joyful hours practicing every type of cookie possible and then developing new easy and
tasty recipes. Mr All is now in his second year of study, and as part of the requirements of the industrial
training in which he is enrolled, he is studying several options for beginning his own firm. Mr All,
according to a long-time

friend, must include cookies in his business plan in some way. He settles on the idea of running a cookie
muling business after a succession of brainstorming meetings He'll start off part-time and provide his
skills to folks in their homes. The possibilities seem limidess new

that he's begun thinking about it. During the autumn, he'll focus on Christmas treats. He will provide bod
personal and group lessons which will probably be more entertainment than education for the
participants) In addition, he decides to also include youngsters in his target demographic

The very first challenging Issue is deciding on the ideal name for his company. He finally settles an
"Cookie Mania and then goes on to more pressing matters.

Required:

1. Identify specific asset, liability, and equity accounts that Cookie Mania will likely use to record its
business transactions?

2. Should Mr All open a separate bank account for the business? Why or why not?

3. Journal Entries for Januvary 2020: Pass Entries and Prepare Lodgher

Jan 08. Mr Ali cashes his Savings Bonds and receives $520, which she deposits in his personal bank
account.

Jan 09. She opens a bank account under the name "Cookie Creations" and transfers $500 from his
personal

account to the new account in exchange for ordinary shares.

Jan 11. Mr Ali pays $165 to have advertising brochures and posters printed. She plans to distribute these
as opportunities arise.

Jan 13. She buys baking supplies, such as flour, sugar, butter, and chocolate chips, for $125 cashs Jan 14.
Mr Ali starts to gather some baking equipment to take with his when teaching the cookie classes She has
an excellent top-of-the-line food processor and mixer that originally cost his $750. Mr Ali decides to
start using it only in his new business. She estimates that the equipment is currently worth $300. She
invests

the equipment in the business in exchange for ordinary shares.

Jan 16. Mr Ali realizes that his initial cash investment is not enough. His grandmother lends his $2,000
cash

for which Mr Ali signs a note payable in the name of the business. Mr Ali deposits the money in the
business bank account.

Jan 17. He buys more baking equipment for $900 cash.

Jan 20, He teaches his first class and collects $125 cash. Jan 25. Mr Ali books a second class for
December 4 for $150. He receives $30 cash in advance as a down

payment

Jan 30 Mr Ali pays $1,320 for a one-year insurance policy that will expire on December 1, 2018