2008_ACCT2542_Practice_Questions_Solutions_D_Mayorga

2008_ACCT2542_Practice_Questions_Solutions_D_Mayorga - 1...

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Unformatted text preview: 1 ACCT2542 Corporate Financial Reporting and Analysis Session 2, 2008 Solutions to Practice Questions for Tutorials held in: Week 1: Revision of Financial Accounting Fundamentals Week 8: Equity Accounting & Accounting for Joint Ventures Week 9: Introduction to Corporate Financial Reporting Also includes self study material for: Lecture Topic Week 12: Segment Reporting 2 WEEK 1 (28 July - 1 August) Review of Basic Financial Accounting Concepts The objective of this weeks tutorial is to test whether you have a solid understanding of basic financial accounting concepts covered in ACCT 1501 & 1511 to ensure that you are prepared for ACCT 2542. For all questions from Kieso et al. (2008), Please refer to chapter 3 reading materials posted on WebCT. Kieso et al. 2008, Chapter 3, E3.19 BRADLEY PTY LTD Work Sheet (partial) For the Month Ended 30 April 2007 Adjusted Trial Balance Income Statement Balance Sheet Account Titles Dr. Cr. Dr. Cr. Dr. Cr. Cash 19 472 19 472 Accounts receivable 6 920 6 920 Prepaid rent 2 280 2 280 Equipment 18 050 18 050 Accum. depreciation 4 895 4 895 Notes payable 5 700 5 700 Accounts payable 5 472 5 472 Bradley, Capital 34 960 34 960 Bradley, Drawing 6 650 6 650 Services revenue 11 590 11 590 Salaries expense 6 840 6 840 Rent expense 2 260 2 260 Depreciation expense 145 145 Interest expense 83 83 Interest payable _____ ___83 _____ _____ _____ ___83 Totals 62 700 62 700 9 328 11 590 53 372 51 110 Net income 2 262 _____ _____ 2 262 Totals 11 590 11 590 53 372 53 372 3 BRADLEY PTY LTD Balance Sheet 30 April 2007 Assets Current Assets Cash $19 472 Accounts receivable 6 920 Prepaid rent 2 280 Total current assets 28 672 Property, plant and equipment Equipment $18 050 Accumulated depreciation (4 895 ) 13 155 Total assets $41 827 Liabilities and Owners Equity Current liabilities Accounts payable $ 5 472 Interest payable 83 Notes payable 5 700 Total liabilities 11 255 Equity Bradley, Capital 30 572 * Total liabilities and owners equity $41 827 *Beg. Balance Drawings + Net Income = Ending Balance $34 960 $6650 + $2262 = $30 572 4 Kieso et al. 2008, Chapter 3, P3.5 Cr. 43 ,000 14 ,600 1,700 50 ,000 109 ,700 6,000 3,000 228,000 28,500 256,500 Balance Sheet Dr. 37 ,400 1 ,200 3 ,900 80 ,000 120 ,000 14 ,000 _____ 256,500 ______ 256,500 Cr. 279 ,500 ____ 279,500 ____ 279,500 Income Statement Dr. 109 ,000 30 ,500 9 ,400 16 ,900 21 ,000 12,000 28,000 17,400 6,800 ____ 251,000 28,500 279,500 Cr. 43 ,000 14 ,600 1,700 50 ,000 109 ,700 279 ,500 6,000 3,000 507,500 Adjusted Trial Balance Dr. 37 ,400 1 ,200 3 ,900 80 ,000 120 ,000 14 ,000 109 ,000 30 ,500 9 ,400 16 ,900 21 ,000 12,000 28,000 17,400 6,800 _____ 507,500 Cr. 17 ,400 28 ,000 6,800 1,000 6,000 3,000 62,200 (b) (a) (c) (d) (f) (e) Dr. 1 ,000 3 ,000 6,000 28,000 17,400 6,800 ____ 62,200 Adjustments (d) (e) (f) (a) (b) (c) Cr. 36 ,200 14 ,600 2,700 50 ,000 109 ,700 278 ,500 _____ 491,700 Trial Balance Dr. 37 ,400 18 ,600 31 ,900 80 ,000 120 ,000 14 ,000 109 ,000 30...
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