Question

Activity 13: Green 1. Al 30 September Year : 2. Closing inventory valued at $10 000 3. Wages not yet paid but v ed in the period 1 000 4. On tot Mary the fee for account was paid others were paid for the accountant before for her. The fee was paid for halay May-31 ) 5. The suspense account includes a payment contribution to the business from the owner of the business Green) The bookkeeper did not what to do with the payment so she included the payment in the book, but ther e was the s ense account 6. One of our customer went bankrupt whose standing bace was $300 the towance for doubtfuldebts will be 5according to previous excence 7. The motor vehicles are used for the eligunction. Ther e is only for the vehicle & There is no income tax charged in the country and for the year the ending Required Prepare the financial statements of Green for 30 September Show all calculations

Answer 1

75,000 1,000 27,348 46,652 45 10,000 Green Income Statement For the Year Ended September 30, 7 Sales revenue Less: Sales return Less: Cost of goods sold Gross profit Less: Operating expenses: Wages and salaries (4000+1000) 5,000 Advertising 1,500 Motor vehicle running cost 2,210 Accountancy fees (2500-417) 2,083 Discount granted 1,000 Allowance for doubtful debt 630 Bad debt (760+300) 1,060 Total Operating Expenses Add: Other Income: Discount received 2,500 11,970 Bank 1,500 417 23,932 13,483 Green Balance Sheet At September 30, 7 Assets Current assets: Cash Inventory Accounts receivable 13,000 Less: Allowance for doubtful debt (100+300) 400 12,600 Less: Allowance for doubtful debt 12600*5% 630 4,500 Less: Suspense account 3,000 Advance fees Total current assets Fixed assets: Fixture and fittings Motor vehicle 18,000 Add: Insurance 3,000 Total fixed assets Total assets Liabilities and Owners' Equity Current liabilities: Accounts payable Wages payable Total current liabilities Owners' equity Capital Retained earnings Total owners' equity Total liabilities and owners' equity 11,700 Total Other Income Net income 2,500 35,669 21,000 32,700 56,632 $ Beginning Retained earnings Add: Net Income Less: Drawings Ending Retained earnings 8,463 35,669 4,500 39,632 1,000 1,000 2,000 15,000 39,632 54,632 56,632 Calculation for Cost of Goods Sold: Beginning inventory Add: Purchases Less: Pusrchase Return Less: Ending inventory Cost of Goods Sold Amount 1,153 37,695 1,500 10,000 27,348 Explanation: 1 Accountant fees is paid for 6 months, May to Oct but books are closed on September. Advance fees for October = 2500*1/6 = 417 2 Journal entry to correct the suspense account: Suspenseaccount 3,000 Cash 3,000 (To record the payment made from suspense account) 3 Insurance is on the motor vehicle, thus it is capitalised.