Concept explainers
This serial problem began in Chapter 1 and continues through most of the book. If previous chapter segments were not completed, the serial problem can begin at this point.
SP 5 Santana Rey created Business Solutions on October 1, 2019. The company has been successful, and its list of customers has grown. To accommodate the growth, the accounting system is modified to set up separate accounts for each customer. The following chart of accounts includes the account number used for each account and any balance as of December 31, 2019. Santana Rey decided to add a fourth digit with a decimal point to the 106 account number that had been used for the single
In response to requests from customers, S. Rey will begin sell1ng computer software. The company will extend credit terms of 1/10, n/30, FOB shipping point, to all customers who purchase this merchandise. However, no cash discount is available on consulting fees. Additional accounts (Nos. 119, 413, 414, 415, and 502) are added to its general ledger to accommodate the company's new merchandising activities. Its transactions for January through March follow.
The following additional facts are available for preparing adjustments on March 31 prior to financial statement preparation.
- a. The March 31 amount of computer supplies still available totals $2,005.
- b. Prepaid insurance coverage of $555 expired during this three-month period.
- c. Lyn Addie has not been paid for seven days of work at the rate of $125 per day.
- d. Prepaid rent of $2,475 expired during this three-month period.
- e.
Depreciation on the computer equipment for January 1 through March 31 is $1,250. - f. Depreciation on the office equipment for January 1 through March 31 is $400.
- g. The March 31 amount of merchandise inventory still available totals $704.
Required
- 1. Prepare
journal entries to record each of the January through March transactions. - 2. Post the journal entries in part 1 to the accounts in the company's general ledger. Note: Begin with the ledger’s post-closing adjusted balances as of December 31,2019.
- 3. Prepare a 6-column work sheet (similar to the one shown in Exhibit 3.13) that includes the unadjusted
trial balance , the March 31 adjustments (a) through (g), and the adjusted trial balance. Do not prepare closing entries and do not journalize the adjustments or post them to the ledger. - 4. Prepare an income statement (from the adjusted trial balance in part 3) for the three months ended March 31, 2020. (a) Use a single-step format. List all expenses without differentiating between selling expenses and general and administrative expenses. (b) Use a multiple-step format that begins with gross sales (service revenues plus gross product sales) and includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses. Categorize the following accounts as selling expenses: Wages Expense, Mileage Expense, and Advertising Expense. Categorize the remaining expenses as general and administrative.
- 5. Prepare a statement of owner’s equity (from the adjusted trial balance in part 3) for the three months ended March 31, 2020.
- 6. Prepare a classified balance sheet (from the adjusted trial balance) as of March 3 1, 2020.
Prepare journal entries to record the transactions from January to March.
Explanation of Solution
Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.
Prepare journal entries to record the transactions from January to March.
Date | Account title and explanation | PR | Amount | |
Debit | Credit | |||
2020 | ||||
4-Jan | Wages Expense | 623 | $125 | |
Wages Payable | 210 | $500 | ||
Cash | 101 | $625 | ||
(To record the Paid employee) | ||||
5-Jan | Cash | 101 | $25,000 | |
Person R, Capital | 301 | $25,000 | ||
(To record the Additional investment by owner.) | ||||
7-Jan | Merchandise Inventory | 119 | $5,800 | |
Accounts Payable - Corporation K | 201 | $5,800 | ||
(To record the Purchase of merchandise on credit) | ||||
9-Jan | Cash | 101 | $2,668 | |
Accounts Receivable— Company G | 106.6 | $2,668 | ||
(To record the Collected accounts receivable) | $5,500 | |||
11-Jan | Accounts Receivable—Company AE | 106.1 | $5,500 | |
Unearned Computer Services Revenue | 236 | $1,500 | ||
Computer Services Revenue | 403 | $7,000 | ||
( To record the Completed work on project) | ||||
13-Jan | Accounts Receivable—Corporation L | 106.5 | $5,200 | |
Sales | 413 | $5,200 | ||
(To record the merchandise sold on credit.) | ||||
13-Jan | Cost of Goods Sold | 502 | $3,560 | |
Merchandise Inventory | 119 | $3,560 | ||
( To Record the cost of January 13 sale) | ||||
15-Jan | Merchandise Inventory | 119 | $600 | |
Cash | 101 | $600 | ||
( To record the freight paid on incoming merchandise) | ||||
16-Jan | Cash | 101 | $4,000 | |
Computer Services Revenue | 403 | $4,000 | ||
(To record the cash collected revenue from customer) | ||||
Jan. 17 | Accounts Payable - Corporation K | 201 | $5,800 | |
Merchandise Inventory | 119 | $58 | ||
Cash | 101 | $5,742 | ||
(To record the payment of account payable within discount period) | ||||
20-Jan | Sales Returns and Allowances | 414 | $500 | |
Accounts Receivable—Corporation L | 106.5 | $500 | ||
( To record the defective goods returned from customers) | ||||
22-Jan | Cash | 101 | $4,653 | |
Sales Discounts | 415 | $47 | ||
Accounts Receivable—Corporation L | 106.5 | $4,700 | ||
(To record the Collections from accounts receivable) | ||||
24-Jan | Accounts Payable | 201 | $496 | |
Merchandise Inventory | 119 | $496 | ||
(To record the return of merchandise for credit) | ||||
26-Jan | Merchandise Inventory | 119 | $9,000 | |
Accounts Payable - Corporation K | 201 | $9,000 | ||
( To record the purchase of merchandise for resale) | ||||
26-Jan | Accounts Receivable—Incorporation KC | 106.8 | $5,800 | |
Sales | 413 | $5,800 | ||
(To record the merchandise sold on credit) | ||||
26-Jan | Cost of Goods Sold | 502 | $4,640 | |
Merchandise Inventory | 119 | $4,640 | ||
( To record the cost of January 26 sales) | ||||
31-Jan | Wages Expense | 623 | $1,250 | |
Cash | 101 | $1,250 | ||
( To record the payment of employee wages) | ||||
1-Feb | Prepaid Rent | 131 | $2,475 | |
Cash | 101 | $2,475 | ||
( To record the payment of three months’ rent in advance) | ||||
3-Feb | Accounts Payable | 201 | $8,504 | |
Merchandise Inventory | 119 | $90 | ||
Cash | 101 | $8,414 | ||
(To record the payment of account payable within discount period) | ||||
5-Feb | Advertising Expense | 655 | $600 | |
Cash | 101 | $600 | ||
( To record the payment for advertising expense) | ||||
11-Feb | Cash | 101 | $5,500 | |
Accounts Receivable—Alex’s Eng. Co. | 106.1 | $5,500 | ||
( To record the collection of cash from customers) | ||||
15-Feb | Person R, Withdrawals | 302 | $4,800 | |
Cash | 101 | $4,800 | ||
(To record the withdrawals of owner) | ||||
23-Feb | Accounts Receivable—Corporation D | 106.7 | $3,220 | |
Sales | 413 | $3,220 | ||
( To record the sale of merchandise on credit) | ||||
23-Feb | Cost of Goods Sold | 502 | $2,660 | |
Merchandise Inventory | 119 | $2,660 | ||
( To record the cost of February 23 sales) | ||||
26-Feb | Wages Expense | 623 | $1,000 | |
Cash | 101 | $1,000 | ||
( To record the payment of wages to employee) | ||||
27-Feb | Mileage Expense | 676 | $192 | |
Cash | 101 | $192 | ||
(To record the Reimbursement of business mileage) | ||||
8-Mar | Computer Supplies | 126 | $2,730 | |
Accounts Payable-Company H | 201 | $2,730 | ||
( To record the purchase of supplies on credit) | ||||
9-Mar | Cash | 101 | $3,220 | |
Accounts Receivable—Corporation D | 106.7 | $3,220 | ||
( To record the collection of accounts receivable) | ||||
11-Mar | Repairs Expense–Computer | 684 | $960 | |
Cash | 101 | $960 | ||
(To record the payment for computer repairs) | ||||
16-Mar | Cash | 101 | $5,260 | |
Computer Services Revenue | 403 | $5,260 | ||
( To record the collection cash revenue from customer) | ||||
19-Mar | Accounts Payable | 201 | $3,830 | |
Cash | 101 | $3,830 | ||
( To record the payment of accounts payable ($1,100 + $2,730)) | ||||
24-Mar | Accounts Receivable—Company EL | 106.3 | $9,047 | |
Computer Services Revenue | 403 | $9,047 | ||
(To record the billed customer for services) | ||||
25-Mar | Accounts Receivable—Company WS | 106.2 | $2,800 | |
Sales | 413 | $2,800 | ||
( To record the sale of merchandise on credit) | ||||
25-Mar | Cost of Goods Sold | 502 | $2,002 | |
Merchandise Inventory | 119 | $2,002 | ||
( To record the cost of sales of March 25 ) | ||||
30-Mar | Accounts Receivable—Company IFM | 106.4 | $2,220 | |
Sales | 413 | $2,220 | ||
( To record the sale of merchandise on credit) | ||||
30-Mar | Cost of Goods Sold | 502 | $1,048 | |
Merchandise Inventory | 119 | $1,048 | ||
( To record the cost of sales of March 30 ) | ||||
31-Mar | Mileage Expense | 676 | $128 | |
Cash | 101 | $128 | ||
(To record the Reimbursement of business mileage) |
Table (1)
2.
Post the journal entries to the accounts in the general ledger of Company BS.
Explanation of Solution
Account: A record, that documents or records the change in assets, liabilities, or equity for a particular period, is referred to as an account.
Cash No. 101 | |||||
Date | PR | Debit | Credit | Balance | |
31-Dec | $48,372 | ||||
4-Jan | $625 | $47,747 | |||
5-Jan | $25,000 | $72,747 | |||
9-Jan | $2,668 | $75,415 | |||
15-Jan | $600 | $74,815 | |||
16-Jan | $4,000 | $78,815 | |||
17-Jan | $5,742 | $73,073 | |||
22-Jan | $4,653 | $77,726 | |||
31-Jan | $1,250 | $76,476 | |||
1-Feb | $2,475 | $74,001 | |||
3-Feb | $8,414 | $65,587 | |||
5-Feb | $600 | $64,987 | |||
11-Jan | $5,500 | $70,487 | |||
15-Feb | $4,800 | $65,687 | |||
26-Feb | $1,000 | $64,687 | |||
27-Feb | $192 | $64,495 | |||
9-Mar | $3,220 | $67,715 | |||
11-Mar | $960 | $66,755 | |||
16-Mar | $5,260 | $72,015 | |||
19-Mar | $3,830 | $68,185 | |||
31-Mar | $128 | $68,057 | |||
Accounts Receivable—Company AE No. 106.1 | |||||
Date | PR | Debit | Credit | Balance | |
31-Dec | Balance | $0 | |||
11-Jan | $5,500 | $5,500 | |||
11-Feb | $5,500 | $0 | |||
Accounts Receivable—Company WS No. 106.2 | |||||
Date | PR | Debit | Credit | Balance | |
31-Dec | Balance | $0 | |||
25-Mar | $2,800 | $2,800 | |||
Accounts Receivable—Company EL No. 106.3 | |||||
Date | PR | Debit | Credit | Balance | |
31-Dec | Balance | $0 | |||
24-Mar | $9,047 | $9,047 | |||
Accounts Receivable—Company IFM No. 106.4 | |||||
Date | PR | Debit | Credit | Balance | |
31-Dec | Balance | $3,000 | |||
30-Mar | $2,220 | $5,220 | |||
Accounts Receivable—Corporation L No. 106.5 | |||||
Date | PR | Debit | Credit | Balance | |
31-Dec | Balance | $0 | |||
13-Jan | $5,200 | $5,200 | |||
20-Jan | $500 | $4,700 | |||
22-Jan | $4,700 | $0 | |||
Accounts Receivable—Company G 106.6 | |||||
Date | PR | Debit | Credit | Balance | |
31-Dec | Balance | $2,668 | |||
9-Jan | $2,668 | $0 | |||
Accounts Receivable—Company D No. 106.7 | |||||
Date | PR | Debit | Credit | Balance | |
31-Dec | Balance | $0 | |||
23-Feb | $3,220 | $3,220 | |||
9-Mar | $3,220 | $0 | |||
Accounts Receivable—Incorporation KC No. 106.8 | |||||
Date | PR | Debit | Credit | Balance | |
31-Dec | Balance | $0 | |||
26-Jan | $5,800 | $0 | $5,800 | ||
Accounts Receivable—Incorporation D No. 106.8 | |||||
Date | PR | Debit | Credit | Balance | |
31-Dec | Balance | $0 | |||
Merchandise inventory—Incorporation D No. 119 | |||||
Date | PR | Debit | Credit | Balance | |
31-Dec | Balance | $0 | |||
7-Jan | $5,800 | $5,800 | |||
13-Jan | $3,560 | $2,240 | |||
15-Jan | $600 | $2,840 | |||
17-Jan | $58 | $2,782 | |||
24-Jan | $496 | $2,286 | |||
26-Jan | $9,000 | $11,286 | |||
26-Jan | $4,640 | $6,646 | |||
3-Feb | $90 | $6,556 | |||
23-Feb | $2,660 | $3,896 | |||
25-Mar | $2,002 | $1,894 | |||
30-Mar | $1,048 | $846 | |||
Compute supplies No. 126 | |||||
Date | PR | Debit | Credit | Balance | |
31-Dec | Balance | $580 | |||
8-Mar | Balance | $2,730 | $3,310 | ||
Prepaid Insurance No. 128 | |||||
Date | PR | Debit | Credit | Balance | |
31-Dec | Balance | $1,665 | |||
Prepaid Rent No. 131 | |||||
Date | PR | Debit | Credit | Balance | |
31-Dec | Balance | $825 | |||
1-Feb | $2,475 | $3,300 | |||
Office equipment No. 163 | |||||
Date | PR | Debit | Credit | Balance | |
31-Dec | Balance | $8,000 | |||
Accumulated depreciation- Office equipment No. 164 | |||||
Date | PR | Debit | Credit | Balance | |
31-Dec | Balance | $400 | |||
Computer equipment No. 167 | |||||
Date | PR | Debit | Credit | Balance | |
31-Dec | Balance | $20,000 | |||
Accumulated depreciation- Computer equipment No. 168 | |||||
Date | PR | Debit | Credit | Balance | |
31-Dec | Balance | $1,250 | |||
Accounts payable No. 201 | |||||
Date | PR | Debit | Credit | Balance | |
31-Dec | Balance | $1,100 | |||
7-Jan | Balance | $5,800 | $6,900 | ||
17-Jan | Balance | $5,800 | $1,100 | ||
24-Jan | Balance | $496 | $604 | ||
26-Jan | Balance | $9,000 | $9,604 | ||
3-Feb | Balance | $8,504 | $1,100 | ||
8-Mar | Balance | $2,730 | $3,830 | ||
9-Mar | Balance | $3,830 | $0 | ||
Wages payable No. 210 | |||||
Date | PR | Debit | Credit | Balance | |
31-Dec | Balance | $500 | |||
4-Jan | $500 | $0 | |||
Unearned computer services revenue No. 236 | |||||
Date | PR | Debit | Credit | Balance | |
31-Dec | Balance | $1,500 | |||
11-Jan | $1,500 | $0 | |||
Person R, Capital No. 301 | |||||
Date | PR | Debit | Credit | Balance | |
31-Dec | Balance | $80,360 | |||
5-Jan | $25,000 | $105,360 | |||
Person R, Withdrawals No. 302 | |||||
Date | PR | Debit | Credit | Balance | |
15-Feb | $4,800 | $4,800 | |||
Computer services revenue No. 403 | |||||
Date | PR | Debit | Credit | Balance | |
11-Jan | $7,000 | $7,000 | |||
16-Jan | $4,000 | $11,000 | |||
16-Mar | $5,260 | $16,260 | |||
24-Mar | $9,047 | $25,307 | |||
Sales No. 413 | |||||
Date | PR | Debit | Credit | Balance | |
13-Jan | $5,200 | $5,200 | |||
26-Jan | $5,800 | $11,000 | |||
23-Feb | $3,220 | $14,220 | |||
25-Mar | $2,800 | $17,020 | |||
30-Mar | $2,220 | $19,240 | |||
Sales returns and allowances No. 414 | |||||
Date | PR | Debit | Credit | Balance | |
20-Jan | $500 | $500 | |||
Sales discounts No. 415 | |||||
Date | PR | Debit | Credit | Balance | |
20-Jan | $47 | $0 | $47 | ||
Cost of goods sold No. 502 | |||||
Date | PR | Debit | Credit | Balance | |
13-Jan | $3,560 | $3,560 | |||
26-Jan | $4,640 | $8,200 | |||
23-Feb | $2,660 | $10,860 | |||
25-Mar | $2,002 | $12,862 | |||
30-Mar | $1,048 | $13,910 | |||
Depreciation expense - Office equipment No. 612 | |||||
Date | PR | Debit | Credit | Balance | |
Depreciation expense - Computer equipment No. 613 | |||||
Date | PR | Debit | Credit | Balance | |
Wages expense No. 623 | |||||
Date | PR | Debit | Credit | Balance | |
4-Jan | $125 | $125 | |||
31-Jan | $1,250 | $1,375 | |||
26-Feb | $1,000 | $2,375 | |||
Insurance expense No. 637 | |||||
Date | PR | Debit | Credit | Balance | |
Rent expense No. 640 | |||||
Date | PR | Debit | Credit | Balance | |
Computer supplies expense No. 652 | |||||
Date | PR | Debit | Credit | Balance | |
Advertising expense No. 655 | |||||
Date | PR | Debit | Credit | Balance | |
5-Feb | $600 | $600 | |||
Mileage expense No. 676 | |||||
Date | PR | Debit | Credit | Balance | |
27-Feb | $192 | $192 | |||
31-Mar | $128 | $320 | |||
Miscellaneous Expenses No. 677 | |||||
Date | PR | Debit | Credit | Balance | |
Repairs Expense—Computer No. 684 | |||||
Date | PR | Debit | Credit | Balance | |
11-Mar | $960 | $960 |
3.
Prepare a partial worksheet of Company BS for the three months ended March 31, 2020.
Explanation of Solution
Worksheet: A worksheet is the summarized form of accounting information which is made in order to ensure that the accounts are made properly.
Prepare a partial worksheet of Company BS for the three months ended March 31, 2020.
Table (2)
4.
Prepare a single step income statement of Company BS for the three months ended March 31, 2020.
Explanation of Solution
Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.
Single-step income statement: This statement displays the total revenues as one line item from which the total expenses including cost of goods sold is subtracted to arrive at the net profit /net loss for the period.
Prepare a statement of income of Company BS for the three months ended March 31, 2020.
Company BS | ||
Statement of Income | ||
For the three months ended March 31, 2020 | ||
Particulars | Amount | Amount |
Revenues | ||
Computer services revenue | $25,307 | |
Net sales () | $18,693 | |
Total revenues | $44,000 | |
Expenses | ||
Cost of goods sold | $14,052 | |
Depreciation expense—Office equipment | $400 | |
Depreciation expense—Computer equipment | $1,250 | |
Wages expense | $3,250 | |
Insurance expense | $555 | |
Rent expense | $2,475 | |
Computer supplies expense | $1,305 | |
Advertising expense | $600 | |
Mileage expense | $320 | |
Repairs expense—Computer | $960 | |
Total expenses | ($25,167) | |
Net income | $18,833 |
Table (3)
The net income of Company BS for the three months ended March 31, 2020 is $18,833.
5.
Prepare a statement of owner’s equity of Company BS for the three months ended March 31, 2020.
Explanation of Solution
Prepare a statement of owner’s equity of Company BS for the three months ended March 31, 2020.
Company BS | ||
Statement of owner’s equity | ||
For the three months ended March 31, 2020 | ||
Particulars | Amount | Amount |
Person R, Capital, December 31, 2019 | $80,360 | |
Add: Investments by owner | 25,000 | |
Net income | 18,833 | |
$124,193 | ||
Less: Withdrawals by owner | ($4,800) | |
Person R, Capital, as on March 31, 2020 | $119,393 |
Table (4)
The owner’s equity of Company BS for the three months ended March 31, 2020 is $119,393.
6.
Prepare a classified balance sheet of Company BS as of March 31, 2020.
Explanation of Solution
Classified balance sheet: The main elements of balance sheet assets, liabilities, and stockholders’ equity are categorized or classified further into sections in a classified balance sheet. Assets are further classified as current assets, long-term investments, property, plant, and equipment (PPE), and intangible assets.
Prepare a classified balance sheet as of March 31, 2020.
Company BS | ||
Balance sheet | ||
As of March 31, 2020 | ||
Assets | Amount | Amount |
Current assets | ||
Cash | $68,057 | |
Accounts receivable | $22,867 | |
Merchandise inventory | $704 | |
Computer supplies | $2,005 | |
Prepaid insurance | $1,110 | |
Prepaid rent | $825 | |
Total current assets | $95,568 | |
Plant assets | ||
Office equipment | $8,000 | |
Accumulated depreciation—Office equipment | ($800) | $7,200 |
Computer equipment | $20,000 | |
Accumulated depreciation—Computer equipment | ($2,500) | $17,500 |
Total plant assets | $24,700 | |
Total assets | $120,268 | |
Liabilities and Stockholder's Equity | ||
Liabilities | ||
Current liabilities | ||
Wages payable | $875 | |
Stockholders’ Equity | ||
Person R, Capital | $119,393 | |
Total liabilities and equity | $120,268 |
Table (5)
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Principles of Financial Accounting.
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- As the bookkeeper of a new start-up company, you are responsible for keeping the chart of accounts up to date. At the end of each year, you analyze the accounts to verify that each account should be active for accumulation of costs, revenues, and expenses. In July, the accounts payable (A/P) clerk asked you to open an account named New Expenses. You know that an account name should be specific and well defined, and you're afraid the A/P clerk might charge some expenses to the account that are inappropriate. Why do you think the A/P clerk needs the New Expenses account? Who needs to know this information and what action should you consider?arrow_forwardSwift Company is a merchandising business organized in 2020. It is located in J. Hernandez Avenue, Naga City, with telephone number 1989-1213, and website tswiftmerchandising.com You were asked by the owner, Ms. T. Swift, to create a simple computerized accounting system for her business which they will use for records keeping, preparation of financial statements, and as substantiation for regulatory requirements. The December 31, 2021 post-closing trial balance for the Swift Company follows: Swift Company Post-Closing Trial Balance December 31, 2021 110 Cash ₱ 240,000 120 Accounts Receivable 210,000 130 Merchandise Inventory 730,000 140 Prepaid Rent 90,000 150 Office Supplies 160,000 160 Office Equipment 1,000,000 165 Accumulated Depreciation ₱…arrow_forwardThe sum of all of your customer Accounts Receivable is listed as part of on your balance sheet. * O Current Assets Current Liabilities Long-term Assets Suppose you are closing the books at the end of a fiscal year and you have a balance of $75000 in your Revenue account. What should you do with the balance? * O You should do nothing, and carry it over to the next accounting year. You should zero it out. You should move it to the liability account.arrow_forward
- Mr. Hussein is a trade supplier who has been approached by Al Shinas Trading LLC which is requesting credit terms for the first time.Their managing director has provided Mr. Hussein with the following extracts from the final accounts for the past two years and Mr.Hussein has approached you for advice.Details 2019 (OMR) 2020 (OMR)Accounts payables 75,000 65,000Sales revenue 620,000 910,000Equipment 30,000 22,000Cost of Goods sold 400,000 350,000Machinery 3,150,000 3,128,000Inventory 50,000 80,000Operating costs 192,000 170,000Non-operating expenses 25,000 15,000Common share capital 550,000 550,000Bonds 95,000 90,000Retained earnings 70,000 90,000Bank (25,000) 65,000Accounts Receivables 50,000 85,000Long-term loan 100,000 70,000Shareholders’ fund…arrow_forwardIn November Year 2 your accounting firm placed a one-time website advertisement with Today’s CPA. This is your first ad with this vendor. You pay for the one-time advertising with your company’s Citibank Visa credit card. Below is the transaction you completed for this purchase. If you ran the report Transaction List by Vendor, for all dates, what dollar amount will appear under the vendor Today’s CPA? Why?arrow_forwardGJ started operating his new salon business (Sir George Salon) during 2017. He provides services for corporate accounts with 60-day payment term. He submits the following data in 2018: Supplies inventory, 1/1/2018 50,000 Supplies inventory, 12/31/2018 80,000 Revenues 3,000,000 Accounts receivable, Jan. 1, 2018 500,000 Accounts receivable, Dec. 31, 2018 700,000 Purchase of supplies from VAT registered entities (net) 100,000 Purchase of supplies from non-VAT registered entities 50,000 Determine the following: What is the applicable business tax for the taxpayer? How much is the correct business tax due? Assume the taxpayer is non-VAT registered, how much is the VAT payable for the year? Assume the taxpayer is VAT registered, how much is the VAT payable for the year?arrow_forward
- On 9/1, Bugsy Pest Control receives $12,000 in advance to provide provide pest control services to a client over the next 4 months. When the business transaction is recorded on 9/1, what amount, if any, would be recorded for Service Revenue? Fill in the blank with your calculated number. DO NOT include commas, $ signs, period, decimal points, etc., just enter the raw number. Webcourses will add commas to your answer automatically. For example, if you calculated the answer to be $24,123, you would only input: 24123 ASUS f5 E3 f6 [X f8 f9 团 f10 f11 %24 4 & 5 7 8. Y U F G J K 因 6 近arrow_forwardThe accounting records and bank statement of Jeff's Seashell Store provide the following information at the end of April. The closing 'Cash' account balance was $29000, and the bank statement shows a closing balance of $31000. On reviewing the bank statement it is found an account customer has deposited $2500 into the bank account for a March sale and the monthly insurance premium of $550 was automatically charged to the account. Interest of $1500 was paid by the bank and a bank fee of $50 was charged to the account. A payment of $950 to a supplier has been recorded twice in the accounts. After the calculation of the "ending reconciled cash balance", what is the balance of the 'cash' account?A. 33,350 B. None of the other answers C. 31,450 D. 29,000 E. 35,350arrow_forwardJuice World Jamaica Limited, a leading juice manufacturing company has recently hired you as an Accounting Officer. As per job description, you are required to assist in the preparation of the financial statements. The Accounts Manager has extracted a list of balances as at December 2021 for you to review. Revenue 7 600 010 Administrative Expenses 2 300 000 Distribution Costs 980 231 Interest paid on loan Purchases 125 000 4 500 330 1 018 900 Inventories at 1 January 2021 Trade receivables 630 340 Provision for doubtful debts at Jan 2021 19 634 Bad debts 70 110 Non- current Investment 300 900 Additional notes i. Provide for Administrative Expenses of $500 000 paid in advance at 31 December 2021 and Distribution Costs of $50 528 owing at 31 December 2021 Provision for Doubtful Debts is to be maintained at 10% of receivables ii. iii. Inventories at 31 December 2021 were valued at $1 000 000 iv. Provide for corporation tax of S80 000 which is payable on October 1, 2022 Loan interest…arrow_forward
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