Acct1501 Tut Sol W5

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ACCT1501 2012 Sem1 Tutorial Question Solution Week 5
DQ4. 14 The main reason for not including human capital on the balance sheet is the measurement problem. If we take the consulting firm, the problem is putting a dollar figure on each staff member. Would it be based on years of past service, years to retirement, ability to generate future revenues etc. There is also an issue of control, as you will see in later chapters. Options for measurement include: i Present value of future profits generated by firms ii Amounts previously spent on training iii Cost of obtaining a replacement and training that person.

Problem 4.14
1

Morilla
 Ltd
  General
 journal
 
 
  (a)
 
 
  (b)
 
 
 
 
  (c)
 
 
  (d)
 
 
  (e)
 
 
  (f)
 
 
  (g)
 
 
  (h)
 
 
  Dr
  Cr
 
  Dr
  Cr
  Dr
  Cr
 
  Dr
  Cr
 
  Dr
  Cr
 
  Dr
  Cr
 
  Dr
  Cr
 
  Dr
  Cr
 
  Dr
  Cr
  Inventory
  Accounts
 Payable
  Accounts
 Receivable
  Sales
  COGS
  Inventory
  Cash
  Accounts
 Receivable
  Accounts
 Payable
  Cash
  Misc.
 Expenses
  Cash
  Salaries
 Expense
  Cash
  Depreciation
 Expense
  Accumulated
 Depreciation
  Long-­‐term
 loan
  Cash
  $
  8
 250
 
 
  11
 000
 
  7
 700
 
 
  19
 000
 
 
  11
 000
 
 
  1
 500
 
 
  2
 600
 
 
  200
 
 
  800
 
  $
 
  8
 250
 
 
  11
 000
 
  7
 700
 
 
  19
 000
 
 
  11
 000
 
 
  1
 500
 
 
  2
 600
 
 
  200
 
 
  800
 

Problem 4.14(cont’d) Please note that all the t-accounts we use in this course are based on the traditional method, which includes calculating the sum of debits and credits and transferring the value in closing balance to the opening balance for next accounting period. This is additional to the t-accounts used in the textbook, which do not include these two steps.

2
1
 Feb
 
 
 
 
  1
 Mar
 
  1
 Feb
 
 
  1
 Mar
 
  1
 Feb
 
 
  1
 Mar
 
 

Posting to the ledger accounts
Opening
 balance
  Accounts
  receivable
 
 
 
  o/b
 
 
  Opening
 balance
  Sales
 
  o/b
  Opening
 balance
  Accounts
 payable
 
  o/b
  21
 000
  19
 000
 
  Cash
 
 
  Accounts
 payable
  Misc.
 expenses
  Salaries
 expense
  Long-­‐term
 loan
  c/b
 
 
  11
 000
  1
 500
  2
 600
  800
  24
 100
  40
 000
 
  19
 000
  17
 000
  36
 000
 
  7
 700
  36
 550
  44
 250
 
 

  28
 Feb
  40
 000
 
 
 
 
 
 24
 100
 
 
  Accounts
 receivable
  25
 000
 
  Cash
  11
 000
  28
 Feb
  c/b
  36
 000
 
 
  17
 000
 
 
 
  Inventory
  36
 000
 
  8
 250
  28
 Feb
 
 
 
 
 44
 250
 
 
 
 
 
 
 36
 550
 
 

COGS
  c/b
 
 
 

Equipment
  1
 Feb
 
 
 Opening
 balance
 
 
 
 
 
 
 
 
 
 
 
 24
 000
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