Exercises – Session 3 – Reporting transactions

B5.1 [S] Financial & Management Accounting _ Weetman

a. Analyse each of the following transactions to show the two aspects of the transaction:

Jane Gate commenced her dental practice on 1 April by depositing £60,000 in a

Apr. 1
business bank account.
Apr. 1 Rent for a surgery was paid, £800, for the month of April.
Apr. 2 Dental equipment was purchased for £35,000, paying in cash.
Apr. 3 Dental supplies were purchased for £5,000, taking 30 days’ credit from a supplier.
Fees of £1,200 were collected in cash from patients and paid into the bank
Apr. 4
account.
Apr. 15 Dental assistant was paid wages for two weeks, £700.
Apr. 20 Jane Gate withdrew £500 cash for personal use.
Apr. 21 Fees of £2,400 were collected in cash from patients and paid into the bank.
Apr. 29 Dental assistant was paid wages for two weeks, £700.
Invoices were sent to patients who are allowed 20 days’ credit for work done
Apr. 29
during April amounting to £1,900.
Apr. 30 Telephone bill for April was paid, £80.
Dental supplies unused were counted and found to be worth £3,500,
Apr. 30
measured at cost price.
b. Using the list of transactions above, prepare a spreadsheet analysing transactions into the
elements of the accounting equation.
B5.2 [S]
Using the totals from the columns of the spreadsheet of question B5.1, prepare for the
dental practice in the month of April:
(a) a statement of cash flows;
(b) a statement of financial position (balance sheet); and
(c) an income statement (profit and loss account)

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Exercises – Session 3 – Reporting transactions

B6.2 [S]
The following list of transactions relates to the business of Peter Gold, furniture supplier,
during the month of April. Analyse each transaction to show the two aspects of the
transaction.

Amount
Date Business transactions and events (nature of the entity: wholesale trader)
£
Apr. 1 The owner pays cash into a bank account for the business. 60,000
Apr. 2 The business acquires buildings for cash. 20,000
Apr. 4 The business acquires equipment for cash. 12,000
Apr. 6 The business purchases an inventory (stock) of goods for cash. 8,500
The business purchases an inventory (stock) of goods on credit from
Apr. 7 7,000
R. Green and receives an invoice.
Apr. 11 The business pays R. Green in cash for the goods it acquired on credit. 7,000
Apr. 14 The business pays a gas bill in cash. 400
Items costing £5,500 are removed from the store because sales have
Apr. 17 5,500
been agreed with customers for this date.
The business sells some of the goods removed from store for cash of
Apr. 17 6,000
£6,000.
The business sells the remainder of the goods removed from store on
Apr. 17 4,200
credit to P. Weatherall and sends an invoice.
Apr. 24 P. Weatherall pays in cash for the goods obtained on credit. 4,200
Apr. 28 The owner draws cash from the business for personal use. 2,700
Apr. 29 The business pays wages to employees for the past month, in cash. 2,800
The business discovers that its equipment has fallen in value over the
Apr. 30 550
month.
B6.3 [S]
Using the list of transactions at question B6.2 above, prepare a spreadsheet analysing
transactions into the elements of the accounting equation.
B6.4 [S]
Using the total from the columns of the spreadsheet of question B6.3, prepare for the
business in the month of April:
(a) a statement of cash flows;
(b) a statement of financial position (balance sheet); and
(c) an income statement (profit and loss account).
P1-1A Financial Accounting _ Weygandt Kinney’s Repair Ltd. was started on May 1. A
summary of May transactions is presented below.
1. Shareholders invested £10,000 cash in the business in exchange for ordinary shares.
2. Purchased equipment for £5,000 cash.
3. Paid £400 cash for May office rent.
4. Paid £500 cash for supplies.
5. Incurred £250 of advertising costs in the Beacon News on account.
6. Received £4,700 in cash from customers for repair service.
7. Declared and paid a £1,000 cash dividend.
8. Paid part-time employee salaries £1,000.
9. Paid utility bills £140.
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Exercises – Session 3 – Reporting transactions

10. Provided repair service on account to customers £980.

11. Collected cash of £120 for services billed in transaction (10).
Instructions
(a) Prepare a tabular analysis of the transactions, using the following column headings:
Cash, Accounts Receivable, Supplies, Equipment, Accounts Payable, Share Capital,
and Retained Earnings (with separate columns for Revenues, Expenses, and Dividends).
Revenue is called Service Revenue.
(b) From an analysis of the Retained Earnings columns, compute the net income or net
loss for May.
E1-8 Financial Accounting _ Weygandt
An analysis of the transactions made by J. L. Kang & Co., a public accounting firm, for
the month of August is shown below. Each increase and decrease in equity is explained.
Instructions
(a) Describe each transaction that occurred for the month.
(b) Prepare an income statement for August and a statement of financial position at August
31, 2021.

E1-11 Two items are omitted from each of the following summaries of statement of financial
position and income statement data for two companies for the year 2020, Steven Craig and
Georgia Enterprises.

Instructions
Determine the missing amounts.
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