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Assignment 1

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32 views

Assignment 1

Uploaded by

cjbless7
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Bookkeeping (16:090)

Assignment #1 (due Oct 21, 2024)

Please hand in a paper copy of the assignment

1. The following information was taken from Clearly Company’s records on Nov 30, 2023.
Cash $5,000
Accounts receivable $15,000
Property, plant, eq $76,000
Accounts payable $8,000
Loan $20,000
Owner’s equity $68,000

The following transactions occurred during the month of December 2023.

- Sold $4,000 of merchandise for cash


- Paid $1,200 cash for utilities
- Purchased a car for $20,000 on account
- Paid $900 cash for salaries
- Paid $400 cash for gas

Required:

a) Complete the cash T-account and determine the ending balance of cash
b) What is Clearly Company’s income for the period?
c) What is Clearly Company’s owner’s equity on December 31?

2. Bryce Foster recently started his own snow removal company. Transactions for the first month of
operations are as follows:

- Bryce invested $10,000 into the business


- Purchased equipment worth $3,000 with cash
- Paid fuel expense of $500 with cash
- Received $2,300 cash from customers for snow removal services performed during the
month
- Provided snow removal services worth $1,200 on account
- Paid $1,000 salary to two workers
- Received $100 telephone bill to be paid next month
- Purchase another $1,000 of equipment on account

Required:

a) Record the above transactions in their respective T-accounts


3. Record the following journal entries:
- January 13, repaid $7,000 of bank loan
- February 14, purchased equipment and paid $15,000 in cash
- March 10, purchased $2,000 of inventory and paid on account
- April 2, paid $3,000 of accounts payable
- May 18,paid $3,500 rent expense
- June 26, paid $6,000 of salaries
- July 10, sold merchandise and receive $6,500 in cash
- August 1, borrowed $9,000 from the bank

Accounts:

Cash, accounts receivable, inventory, prepaid accounts, equipment, vehicles, buildings

Accounts payable, notes payable, loan, mortgage

Owner’s equity, owner’s contribution, owner’s withdrawal

Revenue

Equipment expense, inventory expense, interest expense, rent expense, salaries expense

4. Calculate the yearly depreciation for the following four assets using the straight-line method:

a) $250,000 piece of equipment expected to last five years with no residual value
b) $16,000 piece of equipment expected to last five years with no residual value
c) $1,000,000 building expected to last 25 years with $100,000 residual value
d) $60,000 vehicle expected to last six years with $15,000 residual value
5. Use the following trial balance to produce an income statement and a balance sheet for Smith
Plumbing for the year ended December 31, 2023

Smith Plumbing

Trial Balance

As at December 31, 2023

DR CR
Cash
12,000
Accounts
receivable 45,000
Prepaid expenses
6,000
Equipment, net
12,500
Vehicles, net
67,000
Accounts payable
13,000
Notes payable
12,000
Loan
50,000
Owner's Equity
32,000
Revenue
97,000
Advertising
expense 4,500
Fuel expense
6,000
Rent expense
9,000
Salary expense
42,000

204,000 204,000

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