practicalweek48-0809answers

8/12/2019 practicalweek48-0809answers

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Answers Practical Problems week 48

Problem 1: Fulton Security Service (taken from mid-term test November !" !!8#

Fulton Security Service provides users and security personnel for athletic events and other functions. Here is

Fultons trial balance at the end of October:

Fulton Security Services Trial Balance October 31, 2008

Cash 26,600

ccounts receivable !","00

Supplies !,!20

#$uip%ent !&,600

ccounts payable !0,600

Share capital 20,000

'etained earnin(s 2!,!20

)ividends *,000

Security service revenue &6,000

+a(es epense -2,000

#lectricity epense -,200'ent epense 6,*00

!0,20 !0,20

$urin( /ove%ber 200", Fulton en(a(ed in the folloin( transactions:

! 'eceived cash fro% a custo%er billed last %onth, ",*00.

- 1ade a pay%ent on accounts payable, 6,200.

urchased supplies on credit, "60.

" 3illed a client for security services perfor%ed, *,*00.!0 1ade a rent pay%ent for /ove%ber, !,600.

!! 'eceived fro% custo%ers for security services perfor%ed, -,200.

!2 aid a(es to the security staff for the first half of /ove%ber, 2,"00.

!* Ordered e$uip%ent, !,600.

!& aid the current %onths electricity bill, "00.

! 'eceived and paid for the e$uip%ent ordered on /ove%ber !*, !,600.

!4 'eturned for full credit da%a(ed supplies purchased on /ove%ber , 2*0.

2! aid for the supplies purchased on /ove%ber less the return on /ove%ber !4, 620.

2- 3illed a custo%er for security services perfor%ed, -,600.

-0 aid a(es to the security staff for the second half of /ove%ber, 2,!00.

-0 aid a dividend of 2,000.

%uestion A

'ecord the transactions in 5ournal entries. se only the accounts in the trial balance. lease s7ip a line

beteen the entries.

%uestion &

#nter the October -! trial balance in the 89accounts.

%uestion '

ost the 5ournal entries to the 89accounts.

%uestion $

Close the 89accounts and prepare the trial balance as of /ove%ber -0, 200".

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%uestion A

)ate ccount )ebit Credit

! Cash ",*00

ccounts receivable ",*00

- ccounts payable 6,200

Cash 6,200

Supplies "60

ccounts payable "60

" ccounts receivable *,*00

Security services revenue *,*00

!0 'ent epense !,600

Cash !,600

!! Cash -,200

Security services revenue -,200

!2 +a(es epense 2,"00

Cash 2,"00

!* /o entry

!& #lectricity epense "00

Cash "00

! #$uip%ent !,600

Cash !,600

!4 ccounts payable 2*0

Supplies 2*0

2! ccounts payable 620

Cash 620

2- ccounts receivable -,600

Security services revenue -,600

-0 +a(es epense 2,!00

Cash 2,!00

-0 )ividends 2,000

Cash 2,000

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%uestion &'

Cash ccounts receivable Supplies

3 26,600

! ",*00

!! -,200

# 20,*"0

- 6,200

!0 !,600

!2 2,"00

!& "00! !,600

2! 620

-0 2,!00

-0 2.000

3 !","00

" *,*00

2- -,600

# !",*00

! ",*00 3 !,!20

"60

# !,*0

!4 2*0

#$uip%ent ccounts payable Share capital

3 !&,600! !,600

# !,200

- 6,200!4 2*0

2! 620

3 !0,600 "60

# *,*00

3 20,000

# 20,000

'etained earnin(s )ividends Security services revenue

3 2!,!20

# 2!,!20

3 *,000

-0 2,000

# 6,000

3 &6,000

" *,*00

!! -,200

2- -,600

# 6,200

+a(es epense #lectricity epense 'ent epense

3 -2,000

!2 2,"00

-0 2,!00

# -6,400

3 -,200

!& "00

# *,000

3 6,*00

!0 !,600

# ",000

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Problem Sun" ' and Sand 'om)any

Sun, C and Sand Companystarted its activities on ! Septe%ber 200. t trades in life style consu%er (oods.

8he co%pany uses the )er)etual inventory system. 8he chart of accounts is added as a separate appendi

at the end of the ea%. se only these accounts in your ansers. 8he co%panys classified balance sheet at

-0 Septe%ber 200 ; the end of its first %onth of operations ; is (iven belo.

Sun" ' and Sand 'om)any'lassified &alance S*eet at +! Se)tember !!,

Current ssets Current !iabilities

Cash -&,&&0 3an7


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%uestion A

Dive the 5ournal entries for the folloin( transactions of Sun, C and Sand Companyin October 200. lease

s7ip a line beteen the different 5ournal entries.

ournal Sun" ' and Sand 'om)any

No. Account $ebit 'redit

! nventory -,000

ccounts ayable -,000

E

Frei(ht n &0

Frei(ht n ayable &0

2 ccounts receivable ,&00

Sales ,&00

E

Cost of Doods Sold *,&00

nventory *,&00

E

Frei(ht Out #pense -&

Frei(ht Out ayable -&

- ccounts ayable -,000

Frei(ht n ayable &0

Cash -,0&0

* Cash ,-&0

Sales )iscount @ !&0

ccounts 'eceivable ,&00

& +a(es #pense !,!00

+a(es ayable !00

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Cash !,200

6 ccounts ayable 6,000

Cash 6,000

E

nterest #pense !00

Cash !00

'ent #pense !,000

repaid 'ent !,000

E

)epreciation #pense, Shop #$uip%ent 2&0

ccu%ulated )epreciation, Shop #$uip%ent 2&0

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%uestion &

repare a 1ultistep nco%e State%ent for Sun, C and Sand Companyfor October 200.

n addition to the infor%ation in $uestion , the folloin( details are available:

- nco%e ta rate *0

nyho, you %ust include in the inco%e state%ent the folloin( ite%s:

-net profit

- (ross profit

- net sales

- profit fro% operations

'om)any Sun" ' and Sand

/ultiste) 0ncome Statement for ctober !!,

Net Sales:

Dross Sales ,&00

!essSales )iscounts 9!&0

/et Sales ,-&0

'ost of 2oods Sold:

Cost of Doods Sold before Frei(ht n *,&00

Frei(ht n &0

Cost of Doods Sold 9*,&&0

Dross rofit 2,"00

)eratin3 5)enses:

Frei(ht Out #pense -&

'ent #pense !,000 +a(es #pense !,!00

)epreciation #pense 2&0

8otal Operatin( #penses 92,-"&

Profit from )erations *!&

t*er 6evenue and 5)enses

nterest #pense !00

9!00

Profit before 0ncome 7a5es -!&

0ncome 7a5es (4!# 9!26

Net Profit !"4

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practicalweek48-0809answers

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