Accounting Principles Assignment-
Q1. Smith Catering Service completed the following transactions during its first month of operations for July 2016:
a. Smith Catering Service commenced operations by receiving $12000 cash and a generator (non-current asset) valued at $22000.
b. Paid office rent, $1200. This rent isn't paid in advance.
c. Prepaid insurance for $1400.
d. Completed a large catering service, billed the customer for $3000 and received a promise to collect the $3000 within one week.
e. Paid employee salary, $1400.
f. Paid $600 cash for supplies.
g. Received $24000 cash for performing catering services.
h. Collected $1200 in advance for catering service to be performed later.
i. Collected $3000 cash from a customer on credit.
j. Owner withdrew cash of $4200.
k. Purchased $400 for fuel for the generator on credit.
l. Performed catering services on credit, $1800.
m. Paid $400 on account.
n. Performed catering services for a customer and received $1600 cash.
Requirements:
1. Record each transaction in the journal. Key each transaction by its letter. Explanations aren't required.
2. Post the transactions that you recorded in Requirement 1 in the T-accounts (all).
3. Enter the trial balance in the worksheet (including Income statement and Balance Sheet columns) for the month ended 31 July 2016. Complete the worksheet using the adjustment data given at 31 July:
i. Accrued salary expense, $1400.
ii. Depreciation expense, $120.
iii. Prepaid insurance expired, $500.
iv. Supplies on hand, $400.
v. Unearned service revenue earned during July, $1000.
4. Prepare Smith Catering Service's income statement and statement of changes in equity for the month ended 31 July 2016, and the classified balance sheet as at that date.
5. Journalise and post the adjusting entries, beginning with i.
6. Journalise and post the closing entries.
7. Prepare a post-closing trial balance as at 31 July 2016.
Q2. Perfect Ltd's financial year runs from 1 July to 30 June. The following information regarding inventory transactions is available for the month of July 2016:
|
Date
|
Description
|
Qty
|
Unit cost or selling price
|
|
Jul 1
|
Beginning Inventory
|
1000
|
$12
|
|
Jul 7
|
Purchase
|
500
|
14
|
|
Jul 11
|
Sale
|
700
|
|
|
Jul 18
|
Sale
|
600
|
|
|
Jul 20
|
Purchase
|
1000
|
15
|
|
Jul 25
|
Sale
|
600
|
|
Required: Determine the correct balances at 31 July for Merchandise inventory and Cost of goods sold under each of the following inventory methods: (a) FIFO, (b) LIFO and (c) weighted-average. (For the purposes of the question, please ignore GST).