principles of accounts exercise
Q1.Evaluate the following items, and determine the correct amount to report on the income statement for each, using the accrual basis of accounting for the referenced period of time.
Revenues
A Company had beginning accounts receivable of $8,000. The company reported cash basis revenues of $100,000. The ending accounts receivable amounted to $18,000.
Supplies
B Company purchased $25,000 of supplies. Supplies on hand decreased by $5,000 during the period.
Rent
C Company started the year with no prepaid rent, and ended the year with $1,000 in prepaid rent. Rent expense on a cash basis was $13,000.
Equipment
At the beginning of the year, D Company purchased and expensed an item of equipment for $20,000. The equipment has a 4-year life, and will be worthless after four years.
Wages
There was no wages payable at the beginning of the year. E Company paid $145,000 in wages during the year, and owed an additional $12,000 at year's end.
56111085 MUTEMWA TAFIRA BIT III. ASSSIGNMENT 2 POA
Q2
ZULU ZULU formed a management consulting firm specializing in cost management systems. Below are the transactions that occurred during the initial month of operation.
June 2
ZULU ZULU invested $25,000 cash in the capital stock of the newly formed corporation.
June 3
Hired an administrative assistant, to be paid $3,000 per month. Leased office space at the rate of $1,000 per month. Signed a contract with XX Ltd to deliver consulting services valued at $7,500.
June 8
Purchased (and immediately used) office supplies on account for $750.
June 9
Received $2,500 from XX Ltd for work performed to date.
June 15
Paid $1,200 for travel costs associated with consultation work.
June 16
Provided services on account to ABC co for $3,000.
June 17
Paid $1,500 to administrative assistant for salary.
June 23
Billed Farris for $4,000 consulting engagement performed.
June 25
The company paid ZULU ZULU a $1,000 dividend.
June 26
Revenues
A Company had beginning accounts receivable of $8,000. The company reported cash basis revenues of $100,000. The ending accounts receivable amounted to $18,000.
Supplies
B Company purchased $25,000 of supplies. Supplies on hand decreased by $5,000 during the period.
Rent
C Company started the year with no prepaid rent, and ended the year with $1,000 in prepaid rent. Rent expense on a cash basis was $13,000.
Equipment
At the beginning of the year, D Company purchased and expensed an item of equipment for $20,000. The equipment has a 4-year life, and will be worthless after four years.
Wages
There was no wages payable at the beginning of the year. E Company paid $145,000 in wages during the year, and owed an additional $12,000 at year's end.
56111085 MUTEMWA TAFIRA BIT III. ASSSIGNMENT 2 POA
Q2
ZULU ZULU formed a management consulting firm specializing in cost management systems. Below are the transactions that occurred during the initial month of operation.
June 2
ZULU ZULU invested $25,000 cash in the capital stock of the newly formed corporation.
June 3
Hired an administrative assistant, to be paid $3,000 per month. Leased office space at the rate of $1,000 per month. Signed a contract with XX Ltd to deliver consulting services valued at $7,500.
June 8
Purchased (and immediately used) office supplies on account for $750.
June 9
Received $2,500 from XX Ltd for work performed to date.
June 15
Paid $1,200 for travel costs associated with consultation work.
June 16
Provided services on account to ABC co for $3,000.
June 17
Paid $1,500 to administrative assistant for salary.
June 23
Billed Farris for $4,000 consulting engagement performed.
June 25
The company paid ZULU ZULU a $1,000 dividend.
June 26