10 and 15 20x5 assuming the company does not use

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Unformatted text preview: able 300,000 Rent Revenues 300,000 To record accrued rent revenue b) Total salaries are $2,580,000 ($2,625,000 + $45,000) Total rent revenue is $14,100,000 ($14,400,000 + $300,000) c) Jan. 1 Salaries Payable 45,000 Salaries Expense 45,000 To reverse accrued salaries Jan. 1 Rent Revenues 300,000 Rent Receivable 300,000 To reverse accrued rent revenue d) Jan. 10 Salaries Expense 120,000 Cash 120,000 To record payment of salaries Jan. 15 Cash 750,000 Rent Revenues 750,000 To record collection of rent e) Jan. 10 Salaries Expense 75,000 Salaries Payable 45,000 Cash 120,000 To record payment of salaries Jan. 15 Cash 750,000 Rent Receivable 300,000 Rent Revenues 450,000 To record collection of rent f) Salaries expense without reversing entries of $75,000 (see entry (e)) equals the results from (c) and (d) with reversing entries ($120,000 - $45,000). Rent revenues without reversing entries of $450,000 (see entry (e)) equals the results from (c) and (d) with reversing entries ($750,000 - $300,000). Download free eBooks at bookboon.com 25 Problem 5 Accounting Cycle Exercises IV Problem 5 Dingane Ndubizu owns a diamond mining business in South Africa. He is interested in attracting additional investors to obtain financing for planned expansion. Some potential investors have expressed a concern that money is really being sought to address liquidity problems being faced by Dingane’s company. To alleviate this concern Dingane provided the following complete list of assets and liabilities of the company. The currency unit is the South African Rand. Use this information to determine the company’s current assets, current liabilities, working capital, current ratio, and quick ratio. Based on your calculations, does it appear that the company is experiencing liquidity problems? Accumulated Depreciation R 7,995,750 Prepaid Rent 80,150 Note Payable (due in 3 months) 175,000 Accounts Receivable 819,000 Accounts Payable 360° thinking 446,250 Patent 5,250,000 Cash 1,382,500 Supplies 235,900 Unearned Revenues Equipment 232,750 15,360,800 78,750 Loan Payable (due in 3 years) Please click the advert Interest Payable . 2,625,000 360° thinking . 360° thinking . Discover the truth at www.deloitte.ca/careers © Deloitte & Touche LLP and affiliated entities. Discover the truth at www.deloitte.ca/careers © Deloitte & Touche LLP and affiliated entities. Download free eBooks at bookboon.com 26 Discover the truth at www.deloitte.ca/careers © Deloitte & Touche LLP and affiliated entities. © Deloitte & Touche LLP and affiliated entities. D Problem 5: Worksheet Accounting Cycle Exercises IV Worksheet 5 Current Assets Accumulated Depreciation Prepaid Rent Quick Assets Current Liabilities R 7,995,750 80,150 Note Payable (due in 3 months) 175,000 Accounts Receivable 819,000 Accounts Payable 446,250 Patent 5,250,000 Cash 1,382,500 Supplies 235,900 Unearned Revenues 232,750 Equipment Interest Payable Loan Payable (due in 3 years) 15,360,800 78,750 2,625,000 Working...
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This document was uploaded on 09/24/2013.

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