Solution manual Accounting An Introduction to Principles & Practice 7th EditionEdward A Clarke

Solution manual Accounting An Introduction to Principles & Practice 7th EditionEdward A Clarke

Clarke 7e Accounting: An introduction to principles and practice SOLUTIONS MANUAL
Accounting: An introduction to principles and practice, 7e. Solutions Manual 1

23 February 20 15
Chapter 1 Accounting: its foundations Question 1.1 Across: 2 non current; 5 current liability; 8 accrual; 10 profit; 11 interpreting; 12 users; 15 analysing; 16 external; 17 revenue; 18 process. Down: 1 current asset; 3 owners equity; 4 accounts payable; 6 internal; 7 service; 9 collecting; 13 expense; 14 assets. Question 1.2 Across: 2 creditors; 5 debtors; 6 stationery; 10 office equipment; 11 accounts receivable; 14 postage; 15 stock on hand; 16 drawings; 17 loan; 19 machinery; 20 computers; 21 inventory. Down: 1 mortgage; 3 cash; 4 land; 7 accounts payable; 8 cash at bank; 9 motor vehicles; 12 capital; 13 building; 18 stock. Question 1.3 Across: 1 materiality; 3 disclosure; 4 continuity; 6 historical cost; 9 consistently; 11 conservatism; 12 Australian; 15 one year; 16 cost. Down: 2 indefinitely; 5 going concern; 7 entity; 8 monetary; 10 period; 13 laws; 14 all. Question 1.4 Across: 2 public; 5 financial statements; 7 users; 8 accrual; 10 corporations; 11 enforceability; 14 framework; 15 external; 16 balance sheet; 17 companies; 19 accrual; 20 assumptions. Down: 1 AASB; 3 consistency; 4 fair; 6 income statement; 9 going concern; 12 international; 13 entity; 14 financial; 18 IASB. Question 1.5 Across: 5 unlimited; 6 partners; 8 agreement; 9 silent; 12 shareholders; 13 partnership; 14 sole trader; 15 limited. Down: 1 corporations; 2 ltd; 3 directors; 4 pty; 7 shares; 10 proprietary; 11 registered; 13 public. Question 1.6 a. deposited, cashed; b. payee, drawer Question 1.7

Natural Australia Bank NITROGEN BRANCH 23 February 20 15 PAY L J Booker OR BEARER
FOR Rent for March THE SUM OF Two hundred and twenty dollars only $ 220.00
TO LJ Booker 23 February 20 15
D Haren D HAREN “.823192 “.078″474″:156″.8087”. 823192

$ 220.00
Natural Australia Bank NITROGEN BRANCH 23 February 20 15 PAY L Reyes OR BEARER
FOR Inventory purchased THE SUM OF Ninety nine dollars only $ 99.00
TO L Reyes
D Haren D HAREN “.823191 “.078″474″:156″.8087”. 823191

$ 99.00
Accounting: An introduction to principles and practice, 7e. Solutions Manual 2

Question 1.8

Natural Australia Bank NITROGEN BRANCH 10 August 20 15
PAY Wages OR BEARER
FOR Wages for the period

THE SUM OF Six hundred and forty dollars $ 640.00
10 August 20 15 TO Wages
A Rossana A ROSSANA “.533234 “.078″474″:156″.8087”. 533234

$ 640.00
Natural Australia Bank NITROGEN BRANCH 15 August 20 15 PAY Telstra OR BEARER
FOR Telephone account

THE SUM OF Three hundred and nineteen dollars only $ 319.00
15 August 20 15 TO Telstra
A Rossana A ROSSANA
“.533235 “.078″474″:156″.8087”. 533235

$ 319.00
Natural Australia Bank NITROGEN BRANCH 21 August 20 15
PAY Roads & Traffic Authority OR BEARER
FOR Vehicle registration

THE SUM OF Five hundred and sixty one dollars only $ 561.00
21 August 20 15 TO Roads & Traffic Authority
A Rossana A ROSSANA
“.533236 “.078″474″:156″.8087”. 533236

$ 561.00
Natural Australia Bank NITROGEN BRANCH 23 February 20 15 PAY Wages OR BEARER
FOR Wages, week ended 22 February THE SUM OF Nine hundred and ninety dollars only $ 990.00
TO Wages 23 February 20 15
D Haren D HAREN “.823193 “.108″474″:156″.8087”. 823193

$ 990.00
Accounting: An introduction to principles and practice, 7e. Solutions Manual 3

Question 1.9

Question 1.10

Natural Australia Bank NITROGEN BRANCH 28 August 20 15
PAY M Solis OR BEARER
FOR Inventory purchased

THE SUM OF Two hundred and forty two dollars only $ 242.00
28 August 20 15
TO M Solis
A Rossana A ROSSANA
“.533237 “.078″474″:156″.8087”. 533237

$ 242.00
2 June 2015 RECEIPT NO. 454 J Adam – cheque One hundred dollars 10¢ Cash sale 100.10 J Lawson
6 June 2015 RECEIPT NO. 455 Cash
Eighty three dollars 60 ¢

Cash sale 83.60 J Lawson
Natural Australia Bank PHOSPHORUS BRANCH

DEPOSIT

DATE 2 June 20 15
NOTES COIN CHEQUES

TOTAL
CREDIT (Deposit to the account of) J Lawson DRAWER BANK BRANCH J Adam Strate Hopeton 100 10

100 10
Accounting: An introduction to principles and practice, 7e. Solutions Manual 4

Question 1.11

6 November 2015 RECEIPT NO. 671 T Timms – cheque
Two hundred & nine dollars only
Cash sale 209.00 J Crowe
6 November 2015 RECEIPT NO. 672 S Byrne – cheque
One hundred & sixty five dollars only
Rent received 165.00 J Crowe
Natural Australia Bank PHOSPHORUS BRANCH

DEPOSIT

DATE 6 November 20 15
NOTES COIN CHEQUES

CREDIT (Deposit to the account of) J Crowe DRAWER BANK BRANCH T Timms Comm Scone S Byrne ANZ Yass TOTAL 209 00 165 00 374 00
Natural Australia Bank PHOSPHORUS BRANCH

DEPOSIT

DATE 6 June 20 15
NOTES COIN CHEQUES

TOTAL
CREDIT (Deposit to the account of)
DRAWER BANK BRANCH
80 00 3 60

83 60

J Lawson
Accounting: An introduction to principles and practice, 7e. Solutions Manual 5

17 November 2015 RECEIPT NO. 673 M Postma – cash Eighty eight dollars only
Cash sale 88.00 J Crowe
Natural Australia Bank PHOSPHORUS BRANCH

DEPOSIT

DATE 17 November 20 15
NOTES 85 00 COIN 3 00 CHEQUES
CREDIT (Deposit to the account of) J Crowe DRAWER BANK BRANCH

TOTAL 88 00
28 November 2015 RECEIPT NO. 674 M Beatty – cheque
Two hundred & twenty dollars only
Cash sale 220.00 J Crowe
28 November 5 RECEIPT NO. 675 Ukansel – cheque
Three hundred & thirty dollars only
Commission received 330.00 J Crowe
28 November 2015 RECEIPT NO. 676 J Holt – cash
Ninety eight dollars only
Cash sale 98.00 J Crowe
Accounting: An introduction to principles and practice, 7e. Solutions Manual 6

Question 1.12 a. Debit card – Payer presents card to payee who swipes it. Funds are transferred from the business bank account to supplier’s account. Electronic funds transfer (EFT) – funds transferred from business bank account to supplier’s account using a computer or similar device. b. EFTPOS – customers pay the business using a debit card or bank issued credit card. Electronic funds transfer (EFT) – A customer can transfer money directly from their bank account to the business bank account using a computer or similar device.
Question 1.13 a.
Bank Deposit Batch Report Date 15 Apr 2015

Batch item Cheque details Cash Drawer Bank Amount Notes Coin $ c $ c $ c Receipts (Nos 375–376) Cash 45 00 Cheques M Eckett NSW, Newcastle 147 65 Cash sale dockets (Nos 006–007) Cash 80 00 3 00 Cheques Cash register tape Cash 675 00 50 Cheques N Leighton Victoria, Broken Hill 225 00 J Walsh Regal, Sydney 42 70 M Ivetic NSW, Hay 98 00 Totals 513 35 800 00 3 50 Deposit details $ c Cash 803 50 Cheques 513 35 Total deposit 1 316 85

Natural Australia Bank PHOSPHORUS BRANCH

DEPOSIT

DATE 28 November 20 15
CREDIT (Deposit to the account of) J Crowe DRAWER BANK BRANCH M Beatty Comm Ulladulla Ukansel National Port Kembla

NOTES COIN CHEQUES

TOTAL
95 00 3 00

220 00 330 00 648 00
Accounting: An introduction to principles and practice, 7e. Solutions Manual 7

b.
Natural Australia Bank PHOSPHOROUS BRANCH
DEPOSIT DATE 15 April 2015 CREDIT (Deposit to the account of) NOTES 800 00 Billie Taylor COIN 3 50 DRAWER BANK BRANCH CHEQUES M Eckett NSW Newcastle 147 65 N Leighton Victoria Broken Hill 225 00 J Walsh Regal Sydney 42 70 M Ivetic NSW Hay 98 00 TOTAL 1 316 85
Question 1.14 a. source; b. control; c. cheque; d. receipt, duplicate receipt; e. receives, original; f. sends, duplicate copy; g. memo Question 1.15 a. Customer purchase order, inventory price list, despatch docket b. Purchase order, goods received advice Question 1.16 a. due care; b. integrity; c. objectivity; d. professional competence; e. confidentiality; f. professional behaviour Question 1.17 The explanation should include the topic matters covered in the text, including the standards. Question 1.18 Refer to text; topic matters covered: basic accounting terms. Question 1.19 Horizontal terms: 2 analysing; 3 non-current; 4 revenue; 5 accounts payable; 6 service, profit; 7 asset; 8 collecting; 9 process; 14 current liability; 18 users; 20 interpreting. Vertical terms: 7–18 owners equity; 16–18 tax. Diagonal terms: 9–15 accrual; 19–8 current asset; 20–14 expense. Question 1.20 a. postage, b. loan, c. drawings, d. mortgage, e. accounts receivable, f. cash at bank, g. debtors, h. creditors, i. motor vehicles, j. building, k. machinery, l. capital, m. cash, n. bank, o. land, p. accounts payable, q. office equipment, r. inventory, s. computers. t. sales, u. stock on hand, v. stock Question 1.21 1 period convention; 2 entity convention; 3 going concern convention; 4 recognition of law convention; 5 entity convention; 6 historical cost convention; 7 monetary convention; 8 period convention; 9 historical cost convention; 10 consistency doctrine; 11 disclosure doctrine; 12 disclosure doctrine; 13 materiality doctrine.
Accounting: An introduction to principles and practice, 7e. Solutions Manual 8

Question 1.22 a. continuity of activity; b. going concern; c. historical record; d. conservatism; e. recognition of law; f. materiality; g. accounting period; h. consistency; i. accounting entity; j. disclosure; k. historical cost; l. monetary; m. business entity Question 1.23 Refer to text ‘Purpose or objective of standards’. Question 1.24 Refer to text ‘Framework for the preparation and presentation of financial statements (the Framework)’. Question 1.25 AASB 101 Presentation of Financial Statements AASB 102 Inventories AASB 107 Cash Flow Statements AASB 112 Income Taxes AASB 116 Property, Plant and Equipment AASB 127 Consolidated and Separate Financial Statements AASB 134 Interim Financial Reporting AASB 137 Provisions, Contingent Liabilities and Contingent Assets AASB 138 Intangible Assets AASB 141 Agriculture Question 1.26 (Note: vertical = v; diagonal = d) a. corporations (v)18–7; b. ltd (v)13–11; c. public (v)9–4; d. directors (d)16–8; e. pty (d)1–3; f. unlimited (d)2–10; g. partners (v)11–4; h. shares (v)20–15;i. agreement (v)11–3; j. silent (d)3–8; k. proprietary (d)4–14; l. registered (d)12–3; m. shareholders (v)18–7; n. partnership (v)12–2; o. sole trader (v)8–17; p. limited (v)13–19. Question 1.27

Question 1.28 3 March: $2413.84; 6 March: $2505.03; 9 March: $1225.07; 12 March: $2950.20; 23 March: $402.05; 28 March: $3045.90; Total for March: $12 542.09. Question 1.29 Refer to text; topic matters covered in ‘Ethics as it applies to accounting’. Question 1.30 Refer to text; topic matter ‘Accounting conventions or assumptions and accounting doctrines’.
Natural Australia Bank NITROGEN BRANCH
26 February 20 15
PAY Glenn Peters Cleaning Supplies OR BEARER
FOR Inv 75963 $398.97 less C/n 290145 $74.80

THE SUM OF Three hundred and twenty four dollars 17 $ 324.17
26 February 20 15 TO Glenn Peters Cleaning Supplies
M Jane MERIDETH JANE ’S RESTAURANT “.010369 “.078″474″:156″.8087”. 010369

$ 324.17
Accounting: An introduction to principles and practice, 7e. Solutions Manual 9

Question 1.31

Question 1.32

Question 1.33 a. A copy of each sales invoice is normally retained by the business. These would be filed in invoice number order. b. Purchase invoices should be filed with a copy of the relevant purchase invoice and goods received advice, normally in cheque number of EFT reference number order. They should be marked as ‘Paid’ with the relevant reference number written on them.
Dubbo Book Nook Phone/fax: (02) 6881 3404 Main Street, Dubbo NSW 2830 SOLD TO ABN: 12 345 467 890 Dunedoo Soil Co-op Tax Invoice No. 13171 Mendooran Road 27 July 2010 Dunedoo 2844

Customer No. Order Number Trading Terms 1612 59 net 30 days DESCRIPTION QTY UNIT PRICE AMOUNT
How Can I Use Herbs in my Daily Life 2 40.00 80.00 by Isabell Shipard
Add 10% GST 8.00
TOTAL AMOUNT PAYABLE $88.00
E&OE
BOURKE SUPPLIERS Co Tax Invoice Supply Street, Bourke NSW 2840 41987 (02) 6872 2287 ABN: 98 765 432 187
SOLD TO DELIVER TO Louth Purchasing Co Shed behind Wilcannia Road Shindy’s Inn Louth 2840 generator

Date Customer Number Customer Order Number 6 April 2010 LOU05 LPC 8995 Description Qty Unit Amount Price Payable

Nudger NG14 Gate 3 380.00 1140.00
Add 10% GST 114.00 TOTAL AMOUNT PAYABLE $1254.00

E&OE
27 July 2015

6 April 2015
Accounting: An introduction to principles and practice, 7e. Solutions Manual 10

Accounting: An introduction to principles and practice, 7E. Solutions Manual 10

Chapter 2 The accounting equation Question 2.1 5000 = 0 + 5000 Question 2.2 1 15 000 = 0 + 15 000 6 85 000 = 15 000 + 70 000 2 25 000 = 0 + 25 000 7 37 000 = 0 + 37 000 3 20 000 = 5000 + 15 000 8 38 000 = 0 + 38 000 4 30 000 = 7000 + 23 000 9 60 000 = 10 000 + 50 000 5 10 000 = 3000 + 7000 10 75 000 = 25 000 + 50 000
Question 2.3 1 July 2015 A Argenton commenced business Assets = Liabilities + Owners’ Equity Bank = 6 000 Capital = 31 000 Motor Vehicle = 25 000 31 000 = + 31 000 4 July 2015 purchased inventory on credit Assets = Liabilities + Owners’ Equity Bank 6 000 Accounts Payable = 3 300 Capital 31 000 Inventory = 3 300 Motor Vehicle 25 000 34 300 = 3 300 + 31 000 5 July 2015 paid cash for inventory Assets = Liabilities + Owners’ Equity Bank 6 000 Accounts Payable 3 300 Capital 31 000 – 2 200 = 3 800 Inventory 3 300 + 2 200 = 5 500 Motor Vehicle 25 000 34 300 = 3 300 + 31 000

Accounting: An introduction to principles and practice, 7E. Solutions Manual 11

6 July 2015 additional capital introduced Assets = Liabilities + Owners’ Equity Bank 3 800 Accounts Payable 3 300 Capital 31 000 + 3 000 + 3 000 = 6 800 + 4 500 Inventory 5 500 = 38 500 Motor Vehicle 25 000 Office Equipment = 4 500 41 800 = 3 300 + 38 500 Question 2.4 22 August 2015 P Dumont obtained a loan Assets = Liabilities + Owners’ Equity Bank 3 000 Accounts Payable 1 500 Capital 48 700 + 10 000 Loan from Bank = 10 000 = 13 000 Inventory 2 200 Premises 45 000 60 200 = 11 500 + 48 700 25 August 2015 paid accounts payable Assets = Liabilities + Owners’ Equity Bank 13 000 Accounts Payable 1 500 Capital 48 700 – 1 500 – 1 500 = 11 500 = 0 Inventory 2 200 Loan from Bank 10 000 Premises 45 000 58 700 = 10 000 + 48 700 26 August 2015 acquired inventory on credit and for cash Assets = Liabilities + Owners’ Equity Bank 11 500 Accounts Payable = 3 080 Capital 48 700 – 1 210 Loan from Bank 10 000 = 10 290 Inventory 2 200 + 3 080 + 1 210 = 6 490 Premises 45 000 61 780 = 13 080 + 48 700

Accounting: An introduction to principles and practice, 7E. Solutions Manual 12

Question 2.5 1 September 2015 P Barrack commenced business with various assets Assets = Liabilities + Owners’ Equity Bank = 2 000 Capital = 46 000 Inventory = 1 000 Motor Vehicle = 8 000 Premises = 35 000 46 000 = 46 000 3 September 2015 inventory purchased for cash Assets = Liabilities + Owners’ Equity Bank 2 000 Capital 46 000 – 1 012 = 988 Inventory 1 000 + 1 012 = 2 012 Motor Vehicle 8 000 Premises 35 000 46 000 = 46 000 4 September 2015 bank granted a mortgage Assets = Liabilities + Owners’ Equity Bank 9 88 Mortgage = 15 000 Capital 46 000 + 15 000 = 15 988 Inventory 2 012 Motor Vehicle 8 000 Premises 35 000 61 000 = 15 000 + 46 000 6 September 2015 machinery was purchased on credit Assets = Liabilities + Owners’ Equity Bank 15 988 Accounts Payable = 8 250 Capital 46 000 Inventory 2 012 Mortgage 15 000 Motor Vehicle 8 000 Premises 35 000 Machinery = 8 250 69 250 = 23 250 + 46 000

Accounting: An introduction to principles and practice, 7E. Solutions Manual 13

Question 2.5 continued
7 September 2015 purchased inventory on credit Assets = Liabilities + Owners’ Equity Bank 15 988 Accounts Payable 8 250 Capital 46 000 Inventory 2 012 + 1 320 + 1 320 = 9 570 = 3 332 Mortgage 15 000 Motor Vehicle 8 000 Premises 35 000 Machinery 8 250 70 570 = 24 570 + 46 000 10 September 2015 machinery was purchased for cash Assets = Liabilities + Owners’ Equity Bank 15 988 Accounts Payable 9 570 Capital 46 000 – 2 530 Mortgage 15 000 = 13 458 Inventory 3 332 Motor Vehicle 8 000 Premises 35 000 Machinery 8 250 + 2 530 = 10 780 70 570 = 24 570 + 46 000 13 September 2015 payment of an account payable Assets = Liabilities + Owners’ Equity Bank 13 458 Accounts Payable 9 570 Capital 46 000 – 8 250 – 8 250 = 5 208 = 1 320 Inventory 3 332 Mortgage 15 000 Motor Vehicle 8 000 Premises 35 000 Machinery 10 780 62 320 = 16 320 + 46 000

Accounting: An introduction to principles and practice, 7E. Solutions Manual 14

Question 2.6 1 September 2015 commenced business with various assets Assets = Liabilities + Owners’ Equity Bank = 2 000 dr Capital = 46 000 cr Inventory = 1 000 dr Motor Vehicle = 8 000 dr Premises =35 000 dr 46 000 = 46 000 3 September 2015 inventory purchased for cash Assets = Liabilities + Owners’ Equity Bank 2 000 dr Capital 46 000 cr – 1 012 cr = 988 dr Inventory 1 000 dr + 1 012 dr = 2 012 dr Motor Vehicle 8 000 dr Premises 35 000 dr 46 000 = 46 000 4 September 2015 bank granted a mortgage Assets = Liabilities + Owners’ Equity Bank 988 dr Mortgage = 15 000 cr Capital 46 000 cr + 15 000 dr = 15 988 dr Inventory 2 012 dr Motor Vehicle 8 000 dr Premises 35 000 dr 61 000 = 15 000 + 46 000 6 September 2015 machinery was purchased on credit Assets = Liabilities + Owners’ Equity Bank 15 988 dr Accounts Payable = 8 250 cr Capital 46 000 cr Inventory 2 012 dr Mortgage 15 000 cr Motor Vehicles 8 000 dr Premises 35 000 dr Machinery = 8
dr 69 250 = 23 250 + 46 000

Accounting: An introduction to principles and practice, 7E. Solutions Manual 15

Question 2.6 continued 7 September 2015 inventory purchased on credit Assets = Liabilities + Owners’ Equity Bank 15 988 dr Accounts Payable 8 250 cr Capital 46 000 cr Inventory 2 012 dr + 1 320 cr + 1 320 dr = 9 570 cr = 3 332 dr Mortgage 15 000 cr Motor Vehicle 8 000 dr Premises 35 000 dr Machinery 8 250 dr 70 570 = 24 570 + 46 000 10 September 2015 machinery was purchased for cash Assets = Liabilities + Owners’ Equity Bank 15 988 dr Accounts Payable 9 570 cr Capital 46 000 cr – 2 530 cr Mortgage =15 000 cr = 13 458 dr Inventory 3 332 dr Motor Vehicle 8 000 dr Premises 35 000 dr Machinery 8 250 dr + 2 530 dr = 10 780 dr 70 570 = 24 570 + 46 000 13 September 2015 payment of an account payable Assets = Liabilities + Owners’ Equity Bank 13 458 dr Accounts Payable 9 570 cr Capital 46 000 cr – 8 250 cr – 8 250 dr = 5 208 dr = 1 320 cr Inventory 3 332 dr Mortgage 15 000 cr Motor Vehicle 8 000 dr Premises 35 000 dr Machinery 10 780 dr 62 320 = 16 320 + 46 000

Accounting: An introduction to principles and practice, 7E. Solutions Manual 16

Question 2.7 Account balances of Fred McKay as 31 March 2015 Assets = Liabilities + Owners’ Equity Current Assets Current Liabilities Capital 32 000 Bank 15 000 Accounts Payable 8 000 Inventory 10 000 Non-current Liabilities Non-current Assets Loan – J Flynn 35 000 Motor Vehicles 30 000 Mortgage 50 000 Premises 65 000 Computers 5 000 125 000 = 93 000 + 32 000 Question 2.8 Account balances of Margaret Robertson as 31 March 2015 Assets = Liabilities + Owners’ Equity Current Assets Current Liabilities Capital 105 000 Cash at Bank 25 000 Accounts Payable 35 000 Inventory 40 000 Non-current Liabilities Non-current Assets Loan – A Pendix 100 000 Land & Buildings 120 000 Mortgage – Union 45 000 Machinery 80 000 Office Equipment 20 000 285 000 = 180 000 + 105 000

Accounting: An introduction to principles and practice, 7E. Solutions Manual 17

Question 2.9
Account Group Account Number Assets 10 – 19 [debit] Current Assets 10 – 14 Bank 10 Cash on Hand 11 Inventory 12 Petty Cash 13 Non-current Assets 15 – 19 Computers 15 Land and Buildings 16 Machinery 17 Motor Vehicles 18 Liabilities 20 – 29 [credit] Current Liabilities 20 – 24 Accounts Payable 20
Non-current Liabilities 25 – 29 Loan from P Broker 25 Mortgage on Land and Buildings 26 Owners’ Equity 30 – 39 [credit] Capital 30

Accounting: An introduction to principles and practice, 7E. Solutions Manual 18

Question 2.10
Account Group Account Number Assets 10 – 19 [debit] Current Assets 10 – 14 Bank 10 Inventory 11 Non-current Assets 15 – 19 Premises 15 Motor Vehicle 16 Machinery 17 Office Equipment 18 Computers 19 Liabilities 20 – 29 [credit] Current Liabilities 20 – 24 Accounts Payable 20 Non-current Liabilities 25 – 29 Mortgage 25 Loan from Bank 26 Owners’ Equity 30 – 39 [credit] Capital 30 Question 2.11 Balance Sheet of Fred McKay as at 31 March 2015 Current Assets Current Liabilities Bank 15 000 Accounts Payable 8 000 Inventory 10 000 25 000 Non-current Liabilities Non-current Assets Loan from J Flynn 35 000 Motor Vehicles 30 000 Mortgage 50 000 85 000 Premises 65 000 Total Liabilities 93 000 Computers 5 000 100 000 Owners’ Equity Capital 32 000 125 000 125 000

Accounting: An introduction to principles and practice, 7E. Solutions Manual 19

Question 2.12
Balance Sheet of Margaret Robertson as at 31 March 2015 Current Assets Current Liabilities Bank 25 000 Accounts Payable 35 000 Inventory 40 000 65 000 Non-current Liabilities Non-current Assets Loan from A Pendix 100 000 Land & Buildings 120 000 Mortgage – Credit Union 45 000 145 000 Machinery 80 000 Total Liabilities 180 000 Office Equipment 20 000 220 000 Owners’ Equity Capital 105 000 285 000 285 000 Question 2.13 Balance Sheet of A Argenton as at 6 July 2015 Current Assets Current Liabilities Bank 6 800 Accounts Payable 3 300 Inventory 5 500 12 300 Owners’ Equity Non-current Assets Capital 38 500 Motor Vehicles 25 000 Office Equipment 4 500 29 500 41 800 41 800 Question 2.14 Balance Sheet of P Dumont as at 31 August 2015 Current Assets Current Liabilities Bank 10 290 Accounts Payable 3 080 Inventory 6 490 16 780 Non-current Liabilities Non-current Assets Loan – Bank 10 000 Premises 45 000 Total Liabilities 13 080 Owners’ Equity Capital 48 700 61 780 61 780

Accounting: An introduction to principles and practice, 7E. Solutions Manual 20

Question 2.15
Balance Sheet of P Barrack as at 30 September 2015 Current Assets Current Liabilities Bank 5 208 Accounts Payable 1 320 Inventory 3 332 8 540 Non-current Liabilities Non-current Assets Mortgage 15 000 Motor Vehicles 8 000 Total Liabilities 16 320 Premises 35 000 Owners’ Equity Machinery 10 780 53 780 Capital 46 000 62 320 62 320
Question 2.16 1 September 2015 commencement of business by K Pullen Assets = Liabilities + Owners’ Equity Bank =12 000 dr Mortgage = 7 500 cr Capital = 52 000 cr Inventory = 3 000 dr Building =37 000 dr Machinery = 7 500 dr 59 500 = 7 500 + 52 000 4 September 2015 purchased inventory for cash Assets = Liabilities + Owners’ Equity Bank 12 000 dr Mortgage 7 500 cr Capital 52 000 cr – 2 310 cr = 9 690 dr Inventory 3 000 dr + 2 310 dr = 5 310 dr Building 37 000 dr Machinery 7 500 dr 59 500 = 7 500 + 52 000

Accounting: An introduction to principles and practice, 7E. Solutions Manual 21

Question 2.16 continued 7 September 2015 additional cash and motor vehicle contributed by owner Assets = Liabilities + Owners’ Equity Bank 9 690 dr Mortgage 7 500 cr Capital 52 000 cr + 7 500 dr + 7 500 cr =17 190 dr + 15 000 cr Inventory 5 310 dr = 74 500 cr Building 37 000 dr Machinery 7 500 dr Motor Vehicle =15 000 dr 82 000 = 7 500 + 74 500 10 September 2015 inventory purchased on credit Assets = Liabilities + Owners’ Equity Bank 17 190 dr Accounts Payable = 2 915 cr Capital 74 500 cr Inventory 5 310 dr Mortgage 7 500 cr + 2 915 dr = 8 225 dr Building 37 000 dr Machinery 7 500 dr Motor Vehicle 15 000 dr 84 915 = 10 415 + 74 500 13 September 2015 machinery bought for cash Assets = Liabilities + Owners’ Equity Bank 17 190 dr Accounts Payable 2 915 cr Capital 74 500 cr – 4 620 cr Mortgage 7 500 cr =12 570 dr Inventory 8 225 dr Building 37 000 dr Machinery 7 500 dr + 4 620 dr =12 120 dr Motor Vehicle 15 000 dr 84 915 = 10 415 + 74 500

Accounting: An introduction to principles and practice, 7E. Solutions Manual 22

Question 2.16 continued 17 September 2015 loan from V Alan Assets = Liabilities + Owners’ Equity Bank 12 570 dr Accounts Payable 2 915 cr Capital 74 500 cr + 10 000 dr Mortgage 7 500 cr = 22 570 dr Loan from V Alan =10 000 cr Inventory 8 225 dr Building 37 000 dr Machinery 12 120 dr Motor Vehicle 15 000 dr 94 915 = 20 415 + 74 500 22 September 2015 machinery purchased on credit Assets = Liabilities + Owners’ Equity Bank 22 570 dr Accounts Payable 2 915 cr Capital 74 500 cr Inventory 8 225 dr + 8 800 cr Building 37 000 dr =11 715 cr Machinery 12 120 dr Mortgage 7 500 cr + 8 800 dr Loan from V Alan 10 000 cr =20 920 dr Motor Vehicle 15 000 dr 103 715 = 29 215 + 74 500 23 September 2015 inventory purchased for cash Assets = Liabilities + Owners’ Equity Bank 22 570 dr Accounts Payable 11 715 cr Capital 74 500 cr – 3 960 cr Mortgage 7 500 cr =18 610 dr Loan from V Alan 10 000 cr Inventory 8 225 dr + 3 960 dr =12 185 dr Building 37 000 dr Machinery 20 920 dr Motor Vehicle 15 000 dr 103 715 = 29 215 + 74 500