Comprehensive%20Example%20Answers

Comprehensive%20Example%20Answers - THE UNIVERSITY OF NEW...

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Session 1, 2010 AFM1A 1 THE UNIVERSITY OF NEW SOUTH WALES School of Accounting ACCT 1501: Accounting and Financial Management 1A Weeks 3 – 6 APPENDIX: COMPREHENSIVE CLASS EXAMPLE – PIANO TUNING SERVICES LTD Adapted from Hoggett, Edwards and Medlin, Problem 5.7, pp. 217-8. Student Handout Blackboard: http://telt.unsw.edu.au
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Session 1, 2010 AFM1A 2 Alex Schubert owns Piano Tuning Service Ltd. The post-closing trial balance at 30 June 2009 is shown below. Account Account number Debit Credit Cash at bank A1 3 280 Accounts receivable A2 3 880 Prepaid insurance A3 190 Supplies A4 210 Motor vehicle A5 21 400 Accumulated depreciation – motor vehicle A5.1 8 026 Accounts payable L1 1 940 Interest payable L2 440 Bank loan L3 7 000 Share capital 0E1 11 000 Retained profits OE2 554 $28 960 $28 960 The Chart of Accounts is shown below: Account Account number Account Account number Cash at bank A1 Retained earnings OE2 Accounts receivable A2 Profit and loss summary OE3 Prepaid insurance A3 Piano tuning fees R1 Supplies A4 Piano repair fees R2 Motor vehicle A5 Petrol and oil expense E1 Accumulated depreciation – motor vehicle A5.1 Depreciation expense – motor vehicle E2 Accounts payable L1 Supplies expense E3 Interest Payable L2 Insurance expense E4 Bank loan L3 Telephone expense E5 Telephone expense payable L4 Interest expense E6 Share capital OE1 Transactions completed during the year ended 30 June 2010 are summarised below: 1. Tuning fees of $28 600 were receivable during the year; $23 940 of this total was received in cash. The remainder consisted of transactions on credit. 2. Revenue from piano repairs was $24 380. Cash received totalled $16 800, and accounts receivable increased by $7 580. 3. Supplies costing $340 were purchased during the year on credit. 4. On 1 January 2010, Alex Schubert paid $3 000 off the bank loan, plus interest of $860. The interest payment consisted of $440 accrued up to 1 July 2009 and a further $420 which accrued for the period to 31 December 2009. 5. Petrol and oil for the vehicle cost $ 2680 in cash. 6. Insurance on the vehicle, paid in advance was $840. 7. Telephone expense of $2 240 was paid.
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Session 1, 2010 AFM1A 3 8. Accounts receivable of $13 900 were collected, and $2 000 was paid on accounts payable. The following information relating to adjusting entries is available at the end of June 2006. 9.
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Comprehensive%20Example%20Answers - THE UNIVERSITY OF NEW...

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