Category: Dictionary

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Retained profit

Capital introduced is $200. Capital brought forward at the beginning of the year amount to $400 and liabilities are $280. Assets are $360.

What is the retained profit for the year?

Answer

Asset = liabilities + capital

Capital = Assets – Liabilities

Ending capital = beginning capital + additional capital + profit (loss) -drawing

$200 + $400 + profit for the year = $360 – $280

$600 + profit (loss) = $80 , so profit (loss) = 80-600= – 520

Therefore, the profit for the year is in fact a loss of $520.

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Retained earnings

The following extract is from the statement of profit or loss of ABC Co for the year ended 30 April 20X7.

$
Profit before tax 17,000
Tax (8,000)
Profit for the year 9,000

In addition to the profit above:

1. ABC Co paid a dividend of $5,250 during the year.

2. A gain on revaluation of land resulted in a surplus of $4,500.

What total amount will be added to retained earnings at the end of the financial year?

Answer

$
Profit for year 9,000
Dividend (5,250)
Added to retained earnings 3,750
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Net effect on profit

Channy has prepared her draft financial statements for the year ended 30 April 20X7, and needs to adjust them for the following items:

1. Rent of $2,625 was paid and recorded on 2 January 20X6 for the period 1 January to 31 December 20X6. The landlord has advised that the annual rent for 20X7 will be $3,000 although it has not been invoiced or paid yet.

2. Property and contents insurance is paid annually on 1 March. Channy paid and recorded $1,500 on 1 March 20X7 for the year from 1 March 20X7 to 28 February 20X8.

What should the net effect on profit be in the draft financial statements for the year ended 30 April 20X7 of adjusting for the above items?

Answer

$
Rent accrual ($3,000 x 4/12) (1,000)
Insurance prepayment ($1,500 x 10/12 ) 1,250
Net increase in profit 250

Journal Entry on 1 March 20X7

Dr. Insurance Expense…………1,500

Cr. Cash……………………………………1,500

Adjusting Entry on 30 April 20X7

Dr. Prepayment ………………..1,250

Cr. Insurance Expense…………………….1,250

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Receivables in the statement of profit or loss

Selena had receivables of $149,650 at 30 November 20X7. Her allowance for receivables at 1 December 20X6 was $3,115. She wished to change it to the equivalent of 2% of receivables at 30 November 20X7. On 29 November 20X7 she received $159 in full settlement of a debt that she had written off in the year ended 30 November 20X6.

What total amount should be recognised for receivables in the statement of profit or loss for the year ended 30 November 20X7 ?

Answer

$
Receivables allowance at 30/11/X7 (149,650 x 2%) 2,993
Opening allowance at 1/12/X6 (3115)
Reduction in allowance (credit to statement of profit or loss) (122)

Total credit to statement of profit or loss = 122 + 159  = $281

Journal Entry

Dr. Cash………………………………………….159

Cr. Irrecoverable debts…………………………….……159

Dr. allowances for receivables…..122

Cr. Irrecoverable debts ……………………..122

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Remaining balance on suspense account

David has extracted a trial balance and created a suspense account with a credit balance of $1,520 to make it balance.

David found the following:

  1. A sales invoice for $9,140 has not been entered in the accounting records.
  2. A payment of $3,024 has been posted correctly to the payables control account but no other entry has been made.
  3. A credit sale of $264 has only been credited to the sales account.

What is the remaining balance on the suspense account after these errors have been corrected?

Answer

SUSPENSE ACCOUNT
    $ $
Cash 3,024 Bal b/f 1,520
Receivables 264
Bal c/f 1,240
3,024 3,024

Adjusting Entry

Dr. Suspense Account…..3,024

Cr. Cash………………………………….3,024

Dr.  Receivable …………..264

Cr. Suspense Account……………….264

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Closing Inventory using Perpetual FIFO

A firm has the following transactions with its product R.

1 January 20X3 Opening inventory: nil
1 February 20X3 Buys 15 units at $100 per unit
11 February 20X3 Buys 19 units at $75 per unit
1 April 20X3 Sells 11 units at $150 per unit
1 August 20X3 Buys 7 units at $50 per unit
1 December 20X3 Sells 19 units at $150 per unit

The firm uses Perpetual FIFO to value its inventory. What is the inventory value at the end of the year?

Answer

Closing inventory $650

Inventory Unit
Purchases Sales Balance value cost
Units Units Units $ $
15 15 1,500 100
19 1,425 75
34 2,925
11 (1,100) 11 x 100
23 1,825
7 350 50
30 2,175
19 (1,525)*
16 650

* 4 @ $100 + 15 @ $75 = $1,525

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Depreciation

The plant and equipment account in the records of a company for the year ended 31 December 20X8 is shown below.

PLANT AND EQUIPMENT – COST
20X8 $ 20X8 $
1 Jan Balance 240,000
1 July Cash 12,000 30 Sept Transfer disposal account 21,000
             – 31 Dec Balance 231,000
252,000 252,000

The company’s policy is to charge depreciation on the straight line basis at 30% per year, with proportionate depreciation in the years of purchase and sale.

What should be the charge for depreciation in the company’s statement of profit or loss for the year ended 31 December 20X8?

Answer

$
Held all year ((240,000 – 21,000) x 30%) 65,700
Addition (12,000 x 30% x 6/12) 1,800
Disposal (21,000 x 30% x 9/12) 4,725
Depreciation 72,225
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Receivables expense

At 1 January 20X8 a company had an allowance for receivables of $12,250.

At 31 December 20X8 the company’s trade receivables were $215,750  and it was decided to write off balances totaling $5,750 . The allowance for receivables was to be adjusted to the equivalent of 4% of the remaining receivables.

What total figure should appear in the company’s statement of profit or loss for receivables expense?

Answer

$ $
Trade receivables 215,750
Irrecoverable debts write off (5,750)
210,000
Closing allowance for receivables (4% x 210,000) 8,400
Opening allowance 12,250
Reduction (3,850)
Charge = 5,750 – 3,850 = 1,900

Journal Entry

Dr. Irrecoverable debts ………….. 5,750

Cr. Receivable………………………………………. 5,750

Dr. allowance for receivables…. 3,850

Cr. Irrecoverable debts …………………………….. 3,850

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Carrying amount

The carrying amount of a company’s non-current assets was $100,000 at 1 August 20X2. During the year ended 31 July 20X3, the company sold non current assets for $12,500 on which it made a loss of $2,500. The depreciation charge of the year was $10,000.

What was the carrying amount of noncurrent assets at 31 July 20X3?

Answer

Gain(loss) = proceeds – carrying amount

Carrying amount = proceeds – gain(loss)

$
Carrying amount at 1st August 20X2 50,000
Less depreciation (5,000)
45,000
Proceeds 6,250
Loss 1,250
Carrying amount of asset sold (7,500)
Therefore carrying amount 37,500
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Closing balance of receivable after adjusting errors

The following receivables ledger control account has been prepared by a trainee accountant:

$ $
20X5
Balance 71,170 31-Dec Cash received from credit customers 44,948
Credit sales 47,280 Contras against amounts
owing by company in
payables ledger		 200
Discounts allowed 915 Balance 75,897
Irrecoverable debts written off 450
Sales returns 1,230              –
121,045 121,045

What should the closing balance on the account be when the errors in it are corrected?

Answer

RECEIVABLES LEDGER CONTROL ACCOUNT
$ $
Opening balance 71,170 Cash received 44,948
Credit sales 47,280 Discounts allowed 915
Irrecoverable debts written off 450
Sales returns 1,230
Contras 200
             – Closing balance  70,707
118,450 118,450
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Balance of Receivable in Statement of Financial Position

At 1 July 20X7 a company’s allowance for receivables was $12,000.

At 30 June 20X8, trade receivables amounted to $209,500. It was decided to write off $18,000 of these debts and adjust the allowance for receivables to $15,000.

What are the final amounts for inclusion in the company’s statement of financial position at 30 June 20X8?

Answer

Trade receivables = 209,500 – 18,000 = 191,500

Allowance for receivables = 15,000

Net balance = 191,500 – 15,000 = 176,500

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Inventory destroyed

On 1 September 20X8, a business had inventory of $95,000. During the month, sales totaled $162,500 and purchases $120,000. On 30 September 20X8 a fire destroyed some of the inventory. The undamaged goods in inventory were valued at $55,000. The business operates with a standard gross profit margin of 20%.

Based on this information, what is the cost of the inventory destroyed in the fire?

Answer

$
Sales (100%) 162,500
Cost of sales (80%) 130,000
Gross profit (20%) 32,500
Opening inventory 95,000
Purchases 120,000
215,000
Closing inventory (bal. fig.) (85,000)
Cost of sales 130,000
Calculated inventory 85,000
Actual inventory 55,000
Lost in fire 30,000
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Sales revenue

The following information is available about the transactions of David, a sole trader who does not keep proper accounting records:

Opening inventory   $19,250

Closing inventory   $21,000

Purchases   $190,750

Gross profit as a percentage of sales   20%

Based on this information, what is David’s sales revenue for the year?

Answer

Margin = (sale –cost)/sale = 20%

$ $
Sales (balancing figure) 100% 236,250
Opening inventory 19,250
Purchases 190,750
210,000
Closing inventory (21,000)
Cost of sales (80%) 189,000
Gross profit ( 20/80 x 189,000) 47,250
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Trade Receivable

At 1 January 20X7 a company had an allowance for receivables of $4,500

At 31 December 20X7 the company’s trade receivables were $114,500.

It was decided:

a) To write off debts totaling $7,000 as irrecoverable

b) To adjust the allowance for receivables to the equivalent of 10% of the remaining receivables

What figure should appear in the company’s statement of profit or loss for the total of debts written off as irrecoverable and the movement in the allowance for receivables for the year ended 31 December 20X7?

Answer

$
Closing receivables 114,500
Irrecoverable debts write off (7,000)
107,500
Allowance required (10% x 107,500) 10,750
Existing allowance (4,500)
Increase required 6,250
Charge to statement of profit or loss (7,000 + 6,250) 13,250
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Difference for Payable Ledger Account

ABC received a statement from one of its suppliers, XYZ, showing a balance due of $7,960. The amount due according to the payables ledger account of XYZ in ABC’s records was only $460.

Comparison of the statement and the ledger account revealed the following differences:

  1. A cheque sent by ABC for $540 has not been allowed for in XYZ’s statement.
  2. XYZ has not allowed for goods returned by ABC $360.
  3. ABC made a contra entry, reducing the amount due to XYZ by $6,400, for a balance due from XYZ in ABC’s receivables ledger. No such entry has been made in XYZ’s records.

What difference remains between the two companies’ records after adjusting for these items?

Answer

$
Balance per XYZ 7,960
Cheque not yet received (540)
Goods returned (360)
Contra entry (6,400)
Revised balance per XYZ 660
Balance per ABC (460)
Remaining difference 200
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Balance per cash book before adjustments

ABC Co’s bank statement shows an overdrawn balance of $9,650  at 30 June 20X7. A check against the company’s cash book revealed the following differences:

  1. Bank charges of $50 have not been entered in the cash book.
  2. Lodgements recorded on 30 June 20X7 but credited by the bank on 2 July $3,675.
  3. Cheque repayments entered in cash book but not presented for payment at 30 June 20X7 $6,950.
  4. A cheque payment to a supplier of $1,050 charged to the account in June 20X7 recorded in the cash book as a receipt.

Based on this information, what was the cash book balance before any adjustments?

Answer

$
Balance per bank statement (9,650)
Bank charges 50
Lodgements 3,675
Cheque payments (6,950)
Cheque payment misposted 2,100
Balance per cash book before adjustments (10,775)
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Receivables Charge to statement of profit or loss

At 30 June 20X6 a company’s allowance for receivables was $9,750. At 30 June 20X7 trade receivables totaled $129,250. It was decided to write off debts totaling $9,250. The allowance for receivables was to be adjusted to the equivalent of 7 per cent of the trade receivables.

What figure should appear in the statement of profit or loss for these items?

Answer

$
Allowance for receivables ((129,250 – 9,250) x 7%) 8,400
Previous allowance (9,750)
Reduction (1,350)
Debts written off 9,250
Charge to statement of profit or loss 7,900
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Prepaid insurance

At 1 July 20X6 a company had prepaid insurance of $ 2,050. On 1 January 20X7 the company paid $9,500 for insurance for the year to 30 September 20X7.

What figures should appear for insurance in the company’s financial statements for the year ended 30 June 20X7?

Answer

SPLOCI SOFP
$ $
Prepaid insurance 2,050
Payment January 20X7 9,500
Prepayment July-Sept 20X7(9,500/12 x 3) (2,375) 2,375
Insurance expense and prepaid insurance 9,175 2,375
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Sales for the year

The following information is available for Sok, a sole trader who does not keep full accounting records:

$
Inventory 1 July 20X6 34,650
30 June 20X7 37,275
Purchases made for year ended 30 June 20X7 179,025

Sok makes a standard gross profit of 25 percent on sales.

Based on these figures, what is Sok’s sales figure for the year ended 30 June 20X7?

Answer

$
Opening inventory 34,650
Purchases 179,025
Closing inventory (37,275)
Cost of sales 176,400

Margin = (sale –cost)/sale = 25%

Sales = 176,400  x 100/75 = $235,200

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Accounting entries

ABC , a limited liability company, issued 500,000 ordinary shares of 20 cents each at a price of $1.3 per share, all received in cash.

What should be the accounting entries to record this issue?

Answer

$

Debit: cash ( 500,000 x 1.3)  ………………650,000

Credit: share capital (500,000 x 0.2)   ……………….100,000

Credit : share premium ( 500,000 x 1.1)  ……………550,000

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Profit for the year

The following information is available for a sole trader who keeps no accounting records:

$
Net business assets at 1 July 20X6 46,500
Net business assets at 30 June 20X7 68,500
During the year ended 30 June 20X7:
Cash drawings by proprietor 17,000
Additional capital introduced by proprietor 12,500
Business cash used to buy a car for the proprietor’s
wife, who takes no part in the business 5,000

Using this information, what is the trader’s profit for the year ended 30 June 20X7?

Answer

Assets = Liabilities + Closing Capital (or Assets = Liabilities + Equity)
Closing Capital  = opening capital + profit (loss) + Additional Capital – drawing

Profit (loss) = closing Capital- opening capital-Additional Capital +drawing

$
Increase in net assets (68,500- 46,500) 22,000
Capital introduced (12,500)
Drawings (17,000 +5,000) 22,000
Profit for the year 31,500
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Receivables and Prepayments

At 31 December 20X4 the following matters require inclusion in a company’s financial statements:

1.On 1 January 20X4 the company made a loan of $3,000  to an employee, repayable on 31 March 20X5, charging interest at 5 per cent per year. On the due date she repaid the loan and paid the whole of the interest due on the loan to that date.

2.The company has paid insurance $2,250  in 20X4, covering the year ending 31 August 20X5.

3.In January 20X5 the company received rent from a tenant $1,000 covering the six months to 31 December 20X4.

For these items, what total figures should be included in the company’s statement of financial position at 31 December 20X4?

Answer

$
Receivables and prepayments
Insurance 2,250 x 8/12 prepayment 1,500
Loan (receivable) 3,000
Interest due 3,000 x 5% (receivable) 150
Rent due (receivable) 1,000
5,650
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Sales figure for the year

The following information is available for the year ended 31 December 20X6 for a trader who does not keep proper accounting records:

$
Inventories at 1 January 20X6 9,500
Inventories at 31 December 20X6 11,250
Purchases 159,250

Gross profit percentage on sales = 40%

Based on this information, what was the trader’s sales figure for the year?

Answer

$
Cost of sales
Opening inventory 9,500
Purchases 159,250
Less: closing inventory (11,250)
157,500

Margin = (sale –cost)/sale = 40%

Sales = 157,500 x 100/60 = $262,500

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Inventory destroyed

On 31 December 20X2 the inventory of V was completely destroyed by fire. The following information is available:

1.Inventory at 1 December 20X2 at cost $7,100

2.Purchases for December 20X2 $12,400

3.Sales for December 20X2 $16,200

4.Standard gross profit percentage on sales revenue 25%

Based on this information, which of the following is the amount of inventory destroyed?

Answer

Margin = (sale –cost)/sale = 25% or

$
Sales (100%) 16,200
Cost of sales (75%)  12,150
Gross profit (25%) 4,050
 $
Opening inventory 7,100
Purchases 12,400
19,500
Calculated closing inventory (bal fig) (7,350)
Cost of sales 12,150
Calculated closing inventory 7,350
Actual closing inventory              –
Destroyed by fire  7,350
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Sale

A sole trader who does not keep full accounting records wishes to calculate her sales revenue for the year.

The information available is:

  1. Opening inventory   $4,250
  2. Closing inventory   $6,000
  3. Purchases   $22,750
  4. Standard gross profit percentage on sales revenue   40%

Which of the following is the sales figure for the year calculated from these figures ?

Answer

Cost of sales= opening inventory + purchase – closing inventory

= $4,250 + $22,750 – $6,000 = $21,000

Sales   100%

Cost of sales   60%

Gross profit   40%

Margin = (sale –cost)/sale = 40%

Sales = $21,000 /60% = $35,000

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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sales

Selena fixes prices to make a standard gross profit percentage on sales of 30%.

The following information for the year ended 31 January 20X5 is available to compute her sales total for the year.

$
Inventory: 1 February 20X4 60,750
31 January 20X5 65,425
Purchases 148,850
Purchases returns 10,300

What is the sales figure for the year ended 31 January 20X5?

Answer

Cost of sales

$
Opening inventory 60,750
Purchases 148,850
Less: purchases returns (10,300)
199,300
Less: closing inventory (65,425)
133,875

Margin = (sale –cost)/sale = 30%

Sales = 133,875 x 100/70 = $191,250

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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PURCHASES

Selena does not keep proper accounting records, and it is necessary to calculate her total purchases for the year ended 31 January 20X5 from the following information:

$
Trade payables: 31 January 20X4 32,600
31 January 20X5 42,813
Payment to suppliers 222,100
Cost of goods taken from inventory by Selena for her personal use 250
Refunds received from suppliers 600
Discounts received 2,800

What is the figure for purchases that should be included in Selena’s financial statements?

Answer

PURCHASES CONTROL ACCOUNT
$ $
Payments to suppliers 222,100 Opening balance 32,600
Discounts received 2,800  Goods taken 250
Closing balance 42,813 Refunds received 600
             – Purchases (bal fig)  234,263
267,713 267,713
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Closing Capital

A sole trader’s business made a profit of $65,000 during the year ended 31 March 20X7. This figure was after deducting $200 per week wages for himself. In addition, he put his home telephone bill through the business books, amounting to $800 plus sales tax at 15%. He is registered for sales tax and therefore has charged only the net amount to his statement of profit or loss and other comprehensive income.

His capital at 1 April 20X6 was $13,000. What was his capital at 31 March 20X7?

Answer

$
Capital at 1 April 20X6 13,000
Add: profit (after drawings) 65,000
Less: sales tax element(800 x 16%) (128)
Capital at 31 March 20X7 77,872
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Value of the inventory lost

A fire on 30 September 20X4 destroyed some of a company’s inventory and its inventory records.

The following information is available:

$
Inventory 1 September 20X4 79,500
Sales for September 20X4 153,000
Purchases for September 20X4 103,000
Inventory in good condition at 30 September 20X4 53,500

Standard gross profit percentage on sales is 35%

Based on this information, what is the value of the inventory lost?

Answer

Margin = (sale –cost)/sale = 35% ,so cost = sale x 65%

$
Opening inventory 79,500
Purchases 103,000
Closing inventory (53,500)
Cost of sale 129,000
Notional cost of sales (153,000 x 65%) (99,450)
Inventory lost 29,550
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Inventory loss

A sole trader fixes her prices by adding 50 per cent to the cost of all goods purchased. On 31 July 20X5 a fire destroyed a considerable part of the inventory and all inventory records.

Her trading account for the year ended 31 July 20X5 included the following figures:

$ $
Sales          70,314
Opening inventory at cost           45,900
Purchases           62,300
        108,200
Closing inventory at cost         (51,150)
       (57,050)
Gross profit          13,264

Using this information, what inventory loss has occurred?

Answer

Markup on Cost  50%

Markup = ( sale – cost) / cost = 50%

Sale = cost + cost x 50% = 150 % x cost

So cost = sale / 150%  = $70,314 / 150% = $46,876

Loss of inventory = $57,050 – $46,876 = $10,174

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Actual Sales Revenue

A sole trader fixes his prices to achieve a gross profit percentage on sales revenue of 25%. All his sales are for cash. He suspects that one of his sales assistants is stealing cash from sales revenue.

His trading account for the month of July 20X5 is as follows:

$
Recorded sales revenue 39,000
Cost of sales 30,000
Gross profit 9,000

Assuming that the cost of sales figure is correct, how much cash could the sales assistant have taken?

Answer

Margin = (sale –cost)/sale = 25%, so we can find sale

Cost of sales = $30,000

Therefore sales should be = $30,000 x 100/75 = $40,000

Theft = $40,000 – 39,000  = $1,000

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Sales revenue

A business has compiled the following information for the year ended 31 December 20X2:

$
Opening inventory 96,550
Purchases 247,250
Closing inventory 105,675

The gross profit as a percentage of sales is always 20%

Based on these figures, what is the sales revenue for the year?

Answer

$
Opening inventory 96,550
Purchases 247,250
Closing inventory (105,675)
Cost of sales 238,125

Sales revenue = 238,125 / 0.8 = 238,125 x 100/80 = $297,656

More Explanation

Gross Profit = sale – cost of sale

Markup on Cost  20%

Markup = ( sale – cost) / cost = 20%

  • gross profit = cost x 20%
  • Sale = cost + cost x 20% = 120 % x cost

Gross profit = sale – cost = cost + cost x 20% – cost = cost x 20%

Margin 20% (gross profit percentage on sales revenue of 20%)

Margin = (sale –cost)/sale = 20%

  • gross profit = sale x 20%
  • Gross profit = sale – cost => sale x 20% = sale – cost , so Sale

= cost / 0.8 = cost / (80/100) = cost x 100 / 80

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Suspense after correction of errors

The trial balance of Z failed to agree, the totals being:

debit $209,050

credit $204,925

A suspense account was opened for the amount of the difference and the following errors were found and corrected:

  1. The totals of the cash discount columns in the cash book had not been posted to the discount accounts. The figures were discount allowed $975 and discount received $1,275.
  2. A cheque for $4,750 received from a customer was correctly entered in the cash book but was posted to the control account as $2,275.

What will be the remaining balance on the suspense be after the correction of these errors?

1/

Suspense Account

Dr. Suspense Account…. ……………….975

Cr. AR………………………………………………………..…975

Dr. AP…………………………………………. 1,275

Cr. Suspense Account……………………………….1,275

Adjusting Entry

Dr. discount allowed……………………975

Cr. Suspense Account……………………………….. 975

Dr. Suspense Account…………………1,275

Cr. Discount received………………………………1,275

2/

Suspense Account

Dr. Cash…………………………………….. 4,750

Cr. AR…………………………………………………………. 2,275

Cr. Suspense Account…………………………………2,475

Adjusting Entry

Dr. Suspense Account………………2,475

Cr. AR………………………………………………………….. 2,475

Answer

Suspense account $
Opening balance(credit $204,925-debit $209,050) 4,125 credit
Discount allowed             975 credit
Discount received)        (1,275) debit
Transposition of cash received        (2,475) debit
Remaining balance on the suspense          1,350 credit
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Journal entries for Correcting Suspense Account

A company’s trial balance failed to agree, the out of balance difference of $6,250 being posted to a suspense account.

Subsequent investigation revealed the difference was due to one side of an entry to record the purchase of machinery for $6,250, by cheque, failing to post to the plant and machinery account.

Make journal entries to correct the error.

Answer

Wrong entry / Suspense Account

Dr. Suspense Account………..6,250

Cr. Bank…………………………..….6,250

Adjusting Entry

Dr. Plant and machinery…..6,250

Cr. Suspense account………………6,250

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Original balance on the suspense account

A suspense account was opened when a trial balance failed to agree. The following errors were later discovered.

  • A gas bill of $1,680 had been recorded in the gas account as $960.
  • A discount of $200 given to a customer had been credited to discounts received.
  • Interest received of $280 had been entered in the bank account only.

What was the original balance on the suspense account?

Answer

SUSPENSE ACCOUNT
$ $
Balance  840 Gas bill (1,680 – 960) 720
Interest 280 Discount (2 x 200) 400
1,120 1,120

Journal Entry and Adjusting Entry

Transaction Suspense Account & wrong entry Adjusting Entry
Gas Dr. Gas………………………… 960 Dr. Gas……………………720
Dr. Suspense Account…..720  Cr. Suspense Account…………720
Cr. Cash / Payable……………….1,680
Discount allowed Dr. Suspense Account…..400 Dr. Discount allowed…200
  Cr. Discounts received…………200 Dr. Discount received…200
  Cr. AR………………………………….200  Cr. Suspense Account………….400
Interest Dr. Bank………………………..280 Dr. Suspense Account…280
 Cr. Suspense account……………280  Cr. Interest income…………….280
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Adjusted total assets & Profit

ABC Co has total assets of $162,500 and profit for the year of $37,500 recorded in the financial statements for the year ended 31 December 20X4. Inventory costing $12,500, with a resale value of $18,750, was received into the warehouse on 3 January 20X5 and included in the inventory value that was recorded in the financial statements at 31 December 20X4.

What would the total assets figure in the Statement of Financial Position, and the adjusted profit for the year figure, be after adjusting for this error?

Answer

$162,500 – $12,500  = $150,000. (Total assets)

$37,500 – $12,500 = $25,000. (Profit for the year)

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Credit balance for Bank Loan

The following balances have been extracted from the nominal ledger accounts of XYZ Company, but the figure for bank loan is unknown. There are no other accounts in the main ledger.

$
Payables 6,750
Capital 16,500
Purchases 40,000
Sales 75,000
Other expenses 27,500
Receivables 8,250
Purchase returns 500
Non-current assets 30,000
Cash in bank 4,500
Bank loan Unknown

What is the credit balance on the bank loan account?

Answer

Debit balances $ $
Purchases 40,000
Non-current assets 30,000
Receivables 8,250
Other expenses 27,500
Bank 4,500
110,250
Credit balances
Payables 6,750
Capital 16,500
Sales 75,000
Purchase returns 500
98,750
Bank loan (credit balance) 11,500
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Balance on capital account

The following are balances on the accounts of David, a sole trader, as at the end of the current financial year and after all entries have been processed and the profit for the year has been calculated.

$
Non-current assets 21,250
Receivables 1,750
Trade payables 750
Bank loan 3,750
Allowance for depreciation, non-current assets 3,750
Inventory 1,000
Accruals 250
Prepayments 500
Bank overdraft 500

What is the balance on David’s capital account?

Answer

Debit Credit
$ $
Non-current assets 21,250
Receivables 1,750
Trade payables 750
Bank loan 3,750
Allowance for depreciation, non-current assets 3,750
Inventory 1,000
Accruals 250
Prepayments 500
Bank overdraft              – 500
24,500 9,000

Capital = $24,500 – $9,000= $15,500

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Net profit after adjusting error

A business statement of profit or loss and other comprehensive income for the year ended 31 December 20X6 showed a net profit of $20,900. It was later found that $4,500 paid for the purchase of a motor van had been debited to motor expenses account. It is the company’s policy to depreciate motor vans at 25 per cent per year, with a full year’s charge in the year of acquisition.

What would the net profit be after adjusting for this error?

Answer

$
Draft net profit     20,900
Add: purchase price       4,500
Less: additional depreciation (4,500 x 25%)     (1,125)
Adjusted profit     24,275
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Overdraft per cash book

The following attempt at a bank reconciliation statement has been prepared by ABC Co:

$
Overdraft per bank statement 9,650
Add: deposits not credited 10,300
19,950
Less: unpresented cheques 825
Overdraft per cash book 19,125

Assuming the bank statement balance of $9,650 to be correct, what should the cash book balance be?

Answer

$
Overdraft (9,650)
Outstanding lodgements 10,300
650
Unpresented cheques (825)
Overdraft per cash book (175)
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Correct balance per the cash book

The following bank reconciliation statement has been prepared by a trainee accountant:

$
Overdraft per bank statement 965
Less: unpresented cheques 2,290
1,325
Add: deposits credited after date 4,173
Cash at bank as calculated above 5,498

What should be the correct balance per the cash book?

Answer

$
Overdraft (965)
Unpresented cheques (2,290)
(3,255)
Outstanding lodgements 4,173
Cash at bank 918
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Cash book balance

The following bank reconciliation statement has been prepared by a trainee accountant:

BANK RECONCILIATION 30 SEPTEMBER 20X3
$
Balance per bank statement (overdrawn) 9,210
Add: lodgements credited after date 12,810
22,020
Less: unpresented cheques 10,905
Balance per cash book (credit) 11,115

Assuming the amounts stated for items other than the cash book balance are correct, what should the cash book balance be?

Answer

$
Bank statement (9,210)
Deposits credited after date 12,810
Unpresented cheques (10,905)
Balance per cash book (o/d) (7,305)
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Balance on Bank statement

The following information relates to a bank reconciliation.

(i) The bank balance in the cash book before taking the items below into account was $2,243 overdrawn.

(ii) Bank charges of $138 on the bank statement have not been entered in the cashbook.

(iii) The bank has credited the account in error with $107 which belongs to another customer.

(iv) Cheque payments totaling $819 have been entered in the cashbook but have not been presented for payment.

(v) Cheques totaling $1,345 have been correctly entered on the debit side of the cashbook but have not been paid in at the bank.

What was the balance as shown by the bank statement before taking the above items into account?

Answer

Cash book $ Bank statement $
Balance (2,243) Balance (bal fig) (2,800)
Bank charges (138) Credit in error (107)
Unpresented cheques (819)
           – Outstanding deposits 1345
(2,381) (2,381)
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Bank balance in the statement of financial position

The bank statement on 31 August 20X9 showed an overdraft of $6,400. On reconciling the bank statement, it was discovered that a cheque drawn by your company for $640 had not been presented for payment, and that a cheque for $1,040 from a customer had been dishonoured on 30 August 20X9, but that this had not yet been notified to you by the bank.

What is the correct bank balance to be shown in the statement of financial position at 31 August 20X9 ?

Answer

$
Balance per bank statement (6400)
Unpresented cheque (640)
Dishonoured cheque (affects cash book only)         –
(7040)
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Balance at the bank

A business had a balance at the bank of $5,000  at the start of the month. During the following month, it paid for materials invoiced at $2,000  less trade discount of 20% and cash discount of 15%. It received a cheque from a customer in respect of an invoice for $400, subject to cash discount of 5%.

What was the balance at the bank at the end of the month?

Answer

$
Opening bank balance 5,000
Payment ($2,000 – $400 ) x 85% (1,360)
Receipt ($400 – $20) 380
Closing bank balance 4,020
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Correct bank balance in cash book

The cash book shows a bank balance of $22,700  overdrawn at 31 August 20X7. It is subsequently discovered that a standing order for $500  has been entered twice, and that a dishonoured cheque for $1,800  has been debited in the cash book instead of credited.

What is the correct bank balance?

Answer

$
Balance (22700)
Standing order 500
Dishonoured cheque (1,800 x 2) (3600)
correct bank balance (o/d) (25800)
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Correct bank balance​ in the statement of financial position

Your cash book at 31 December 20X5 shows a bank balance of $2,260 overdrawn. On comparing this with your bank statement at the same date, you discover the following.

1.A cheque for $228 drawn by you on 25 December 20X5 has not yet been presented for payment.

2.A cheque for $368 from a customer, which was paid into the bank on 23 December 20X5, has been dishonoured on 31 December 20X5.

What is the correct bank balance to be shown in the statement of financial position at 31 December 20X5?

Answer

Correct bank balance

= $(2,260)o/d – $368 dishonoured cheque = $(2,628) o/d

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Trade payables for Statement of financial position

The accountant at XYZ Co has prepared the following reconciliation between the balance on the trade payables ledger control account in the general ledger and the list of balances from the suppliers ledger:

$
Balance on general ledger control account 17,142
Credit balance omitted from list of balances from payables ledger (32)
17,110
Undercasting of purchases day book 25
Total of list of balances 17,135

What balance should be reported on XYZ Co’s statement of financial position for trade payables?

Answer

Control account List of balances
$ $
Balance/total 17,142 17,135
Credit balance omitted – 32
Undercasting of day book 25            –
17,167 17,167
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Payables on statement of financial position

The balance on ABC Co’s payables ledger control account is $63,108. The accountant at ABC Co has discovered that she has not recorded:

A settlement discount of $108  received from a supplier; and

A supplier’s invoice for $1,244.

What amount should be reported for payables on ABC Co’s statement of financial position?

Answer

Balance per ledger $63,108
Discount ($108)
Invoice $1,244
Corrected balance $64,244

 

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Balance on the payables ledger control account

At 1 May 20X8, the payables ledger control account showed a balance of $35,580.

At the end of May the following totals are extracted from the subsidiary books for May:

$
Purchases day book 45,950
Returns outwards day book 6,873
Returns inwards day book 3,310
Payments to payables, after deducting $358 cash discount 49,090

It is also discovered that:

(a)The purchase day book figure is net of sales tax at 20%; the other figures all include sales tax.

(b)A customer’s balance of $605 has been offset against his balance of $913 in the payables ledger.

(c)A supplier’s account in the payables ledger, with a debit balance of $200, has been included on the list of payables as a credit balance.

What is the corrected balance on the payables ledger control account?

Answer

PAYABLES LEDGER CONTROL ACCOUNT
$ $
Returns outwards 6,873 Balance b/f 35,580
Payments to payables 49,090 Credit purchases (45,950 x 1.20) 55,140
Discount received 358
Contra 605
Balance c/f 33,794            –
90,720 90,720
Balance b/f 33,794
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Entries for Trade Receivable

Your company sold goods to ABC Co for $3,200 less trade discount of 10% and cash discount of 5% for payment within 15 days. The invoice was settled by cheque five days later.

Make entries to record both of these transactions ?

Answer

$
Sales price 3,200
Less: 10% trade discount 320
Sale 2,880
Cash discount 5% Discount allowed 144
Cash payment Bank 2,736
2,880

Journal Entry

Sale

Dr. trade receivable………….2,880

Cr. Sale………………………………………… 2,880

Payment

Dr. Bank…………………………… 2,736

Dr. Discount allowed……….. 144

Cr. Trade receivable………………………2,880

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Closing balance for receivables ledger control account

The following receivables ledger control account prepared by a trainee accountant contains a number of errors:

RECEIVABLES LEDGER CONTROL ACCOUNT 
$ $
20X5 20X5
01-Jan Balance 153,500 31-Dec Credit sales 75,250
31-Jan Cash from credit customers 77,750 Discounts allowed 850
Credit sales 38,550 Irrecoverable debts
written off		 8,000
Contras against amounts
due to suppliers in payables
ledger		 2163 Interest charged on
overdue accounts		 400
              – Balance 148,913
233,413 233,413

What should the closing balance on the control account be after the errors in it have been corrected?

Answer

RECEIVABLES LEDGER CONTROL ACCOUNT 
$ $
Opening balance 153,500 Cash from customers 77,750
Credit sales 75,250 Discounts allowed 850
Interest charged on  overdue
accounts		 400 Irrecoverable debts written off 8,000
Contras 2,163
              – Closing balance 140,387
229,150 229,150

 

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Closing balance for Receivables Ledger Control Account

The following control account has been prepared by a trainee accountant:

RECEIVABLES LEDGER CONTROL ACCOUNT 
$ $
Opening balance 77,150 Cash received from credit customers 36,800
Credit sales 38,550 Discounts allowed to credit customers 350
Cash sales 22,025 Interest charged on overdue accounts 600
Contras against credit payables
balances in ledger		 1,150 Irrecoverable debts written off 1,225
Allowance for receivables 700
              – Closing balance 99,200
138,875 138,875

What should the closing balance be when all the errors made in preparing the receivables ledger control account have been corrected?

Answer

RECEIVABLES LEDGER CONTROL ACCOUNT 
$ $
Opening balance 77,150 Cash received 36,800
Credit sales 38,550 Discounts allowed 350
Interest charged 600 Contra 1,150
Irrecoverable debts 1,225
              – Closing balance 76,775
116,300 116,300
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Closing balance after correcting the errors

An inexperienced bookkeeper has drawn up the following receivables ledger control account:

RECEIVABLES LEDGER CONTROL ACCOUNT
$ $
Opening balance 45,000 Credit sales 47,500
Cash from credit customers 57,000 Irrecoverable debts written off 375
Sales returns 2,000 Contras against payables 600
Cash refunds to credit customers 825 Closing balance (balancing figure) 57,400
Discount allowed 1,050               –
105,875 105,875

What should the closing balance be after correcting the errors made in preparing the account?

Answer

RECEIVABLES LEDGER CONTROL ACCOUNT
$ $
Opening balance 45,000 Cash from credit customers 57,000
Credit sales 47,500 Irrecoverable debts written off 375
Cash refunds 825 Sales returns 2,000
Discount allowed 1,050
Contras 600
            – Closing balance 32,300
93,325 93,325
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Correct balance on receivables ledger control account

A receivables ledger control account had a closing balance of $2,125. It contained a contra to the payables ledger of $100, but this had been entered on the wrong side of the control account.

What should be the correct balance on the control account?

Answer

$2,125 – (2 x $100) = $1,925

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Closing balance for payables control account

Your payables control account has a balance at 1 October 20X6 of $8,625 credit. During October, credit purchases were $19,600, cash purchases were $600 and payments made to suppliers, excluding cash purchases, and after deducting settlement discounts of $300, were $17,225. Purchase returns were $1,175.

What was the closing balance?

Answer

$
Opening balance 8,625
Credit purchases 19,600
Discounts (300)
Payments (17,225)
Purchase returns (1,175)
9,525
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Sales on credit

You are given the following information:

Receivables at 1 January 20X5 $2,500
Receivables at 31 December 20X5 $2,250
Total receipts during 20X5 (including cash sales of $1,250) $21,250

What is the figure for sales on credit during 20X5?

Answer

Step 1:

Closing Account Receivable = opening AR + total sale – cash received

So, Total sale = closing AR – opening AR + cash received = 2,250 – 2,500 +21,250 =21,000

Step 2:

Total sale = cash sale + credit sale

Credit sale = total sale – cash sale

Credit sales = $21,000 – $1,250= $19,750

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Share capital and share premium

At 1 January 20X2 the capital structure of ABC, a limited liability company, was as follows:

$
Issued share capital 250,000 ordinary shares of 25c each 62,500
Share premium account 75,000

On 1 April 20X2 the company made an issue of 50,000 25c shares at $1.20 each, and on 1 July the company made a bonus (capitalisation) issue of one share for every five in issue at the time, using the share premium account for the purpose.

Calculate the company’s share capital and share premium account at 31 December 20X2.

Answer

$
Share capital @ 1.1.20X2 62,500
Issue on 1.4.20X2 (50,000 @ 25c) 12,500
Bonus issue (300,000/5 x 1) @ 25c 15,000
Share capital as at 31.12.20X2 90,000
Share premium @ 1.1.20X2 75,000
1.4.20X2 50,000 shares @ (120c – 25c) 47,500
Bonus issue (as above) (15,000)
107,500

Public issue

Dr. Cash………………………………60,000

Cr. Share capital……………………………………. 12,500

Cr. Share premium…………………………………47,500

Bonus Issue

Dr. share premium………………15,000

Cr. Share Capital…………………………………..…15,000

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Interest Expense , Accrued Interest and Loan

At 30 June 20X4 a company had $2m 10% loan notes in issue, interest being paid half-yearly on 30 June and 31 December.

On 30 September 20X4 the company redeemed $500,000 of these loan notes at par, paying interest due to that date.

On 1 April 20X5 the company issued $1,000,000 9% loan notes, interest payable half-yearly on 31 March and 30 September.

What figure should appear in the company’s statement of profit or loss for interest payable in the year ended 30 June 20X5?

Answer

$
July – September 2,000,000 x 10% x 3/12 50,000
October – June 1,500,000 x 10% x 6/12 112,500
April – June 1,000,000 x 9% x 3/12 22,500
Interest Expense 185,000

Journal Entry

30 September 20X4

Dr. Loan………………………………………………..500,000

Dr. Interest Expense……………………………….50,000

Cr. Cash…………………………………………………………………550,000

1 April 20X5

Dr. Cash………………………………………………1,000,000

Cr. Loan……………………………………………………………..….1,000,000

30 June

Dr. Interest Expense (112,500+22,500)..135,000

Cr. Cash……………………………………………………………………112,000

Cr. Accrued Interest…………………………………………………..22,500

 

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Rights issue and Bonus Issue

At 30 June 20X4 a company’s capital structure was as follows:

$
Ordinary share capital
 1,000,000 shares of 25c each 250,000
Share premium account 200,000

In the year ended 30 June 20X5 the company made a rights issue of 1 share for every 2 held at $1 per share and this was taken up in full. Later in the year the company made a bonus issue of 1 share for every 5 held, using the share premium account for the purpose.

What was the company’s capital structure at 30 June 20X5?

Answer

$’000
Ordinary shares
Opening balance 250
Rights issue  500,000 * x 25c 125
Bonus issue  300,000** x 25c 75
450
Share premium Opening balance 200
Rights issue 500,000 x 75c 375
Bonus issue 300,000 x 25c (75)
500

*1,000,000 x 1 /2 = 500,000

** (1,000,000 + 500,000) x 1/5 = 300,000

 

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Bonus issue

At 31 December 20X3 the capital structure of a company was as follows:

$
Ordinary share capital
25,000 shares of 50c each 12,500
Share premium account 45,000

During 20X3 the company made a bonus issue of 1 share for every 2 held, using the share premium account for the purpose, and later issued for cash another 15,000 shares at 80c per share.

What is the company’s capital structure at 31 December 20X3?

Answer

$
Ordinary shares at start of year 12,500
Add: bonus issue (25,000 x ½ )12,500 x 50c 6,250
Add: new issue 15,000 x 50c 7,500
26,250
Share premium at start of year 45,000
Less: bonus issue 12,500 x 50c (6,250)
Add: new issue 15,000 x 30c 4,500
43,250

Journal Entry

Bonus Issue

Dr. share premium………………6,250

Cr. Share Capital………………………………..…6,250

Public issue

Dr. Cash………………………………12,000

Cr. Share capital…………………………………….7,500

Cr. Share premium…………………………………4,500

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Provision for Warranty of Goods

XYZ Co sells goods with a one year warranty and had a provision for warranty claims of $16,000 at 31 December 20X2. During the year ended 31 December 20X3, $6,250 in claims were paid to customers. On 31 December 20X3, XYZ Co estimated that the following claims will be paid in the following year:

Scenario Probability Anticipated cost
Worst case 10% $37,500
Best case 20% $6,250
Most likely 70% $15,000

What amount should XYZ Co record in the statement of profit or loss for the year ended 31 December 20X3 in respect of the provision?

Answer

statement of profit or loss

$
Provision required at 31.12.X3 =
(0.10​ x 37,500)+(0.20 x 6,250)+(0.70 x 15,000) 15,500
Provision b/f at 31.12.X2 (16,000)
Utilised during year 6,250
Increase required – charge to SPL 5,750
Statement of Financial Position
Provision c/f at 31.12.X3 15,500
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Provision for Warranty

XYZ Co sells goods with a one year warranty under which customers are covered for any defect that becomes apparent within a year of purchase. In calendar year 20X6, XYZ Co sold 25,000 units.

The company expects warranty claims for 4% of units sold. Half of these claims will be for a major defect, with an average claim value of $25. The other half of these claims will be for a minor defect, with an average claim value of $5.

What amount should XYZ Co include as a provision in the statement of financial position for the year ended 31 December 20X6?

Answer

XYZ Co should provide on the basis of the expected cost. The expected cost would be calculated as (2% x 25,000 x $25) + (2% x 25,000 x $5) = $12,500 + $2,500 = $15,000

Dr. warranty Expense…………..15,000

Cr. Provision for warranty…………………..15,000

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Receivables expense

At the beginning of the year, the allowance for receivables was $1,000. At the year-end, the allowance required was $2,000. During the year $700 of debts were written off, which includes $200 previously included in the allowance for receivables.

What is the charge to statement of profit or loss for receivables expense for the year?

Answer

charge
$ $
Receivables allowance at year end 2,000
Receivables allowance at beginning of year 1,000
Increase in allowance 1,000
Irrecoverable debts written off 700
Total charge to statement of profit or loss 1,700
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Total credit to statement of profit or loss

At 1 January 20X4, there was an allowance for receivables of $3,000. During the year, $1,000 of debts were written off as irrecoverable, and $800 of debts previously written off were recovered. At 31 December 20X4, it was decided to adjust the allowance for receivables to 10% of receivables which are $20,000.

What is the total receivables expense for the year?

Answer

$ $
Receivables allowance at 31.12.X4 (10% of $20,000) 2,000
Receivables allowance at 1.1.X4 3,000
Decrease in allowance 1,000
Irrecoverable debts written off (1,000)
Debt recovered 800
Total credit to statement of profit or loss 800
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Net trade receivables

At 31 December 20X6 a company’s trade receivables totaled $216,000 and the allowance for receivables was $12,000.

It was decided that debts totaling $3,250 were to be written off. The allowance for receivables was to be adjusted to the equivalent of five per cent of the receivables.

What figures should appear in the statement of financial position for trade receivables (after deducting the allowance) and in the statement of profit or loss for receivables expense?

Answer

$
Allowance required 5% x (216,000 – 3,250) 10,638
Existing allowance (12,000)
Reduction in allowance (1,362)
Irrecoverable debts written off 3,250
receivables expense 1,888

Net trade receivables = $216,000 – $3,250  – $10,638  = $202,112

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Receivables expense

At 1 July 20X5 a limited liability company had an allowance for receivables of $20,750. During the year ended 30 June 20X6 debts totaling $36,500 were written off. At 30 June 20X6 a receivables allowance of $54,500 was required.

What figure should appear in the company’s statement of profit or loss for the year ended 30 June 20X6 for receivables expense?

Answer

Receivables expense = $36,500 + ($54,500 – $20,750) = $70,250

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Receivables expense

At 30 September 20X4 a company’s allowance for receivables amounted to $9,500, which was equivalent to five per cent of the receivables at that date.

At 30 September 20X5 receivables totaled $217,000. It was decided to write off $7,000 of debts as irrecoverable. The allowance for receivables required was to be the equivalent of five per cent of receivables.

What should be the charge in the statement of profit or loss for the year ended 30 September 20X5 for receivables expense ?

Answer

$
Irrecoverable debt written off 7,000
Increase in allowance (217,000 – 7,000 ) x 5% – 9,500) 1,000
8,000
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Receivables expense

At 1 July 20X4 the receivables allowance of ABC Co was $4,500.

During the year ended 30 June 20X5 debts totaling $3,650 were written off. The receivables allowance required was to be $4,000 as at 30 June 20X5.

What amount should appear in ABC Co ‘s statement of profit or loss for receivables expense for the year ended 30 June 20X5?

Answer

$
Irrecoverable debts written off 3,650
Reduction in allowance (4,500-4,000) (500)
Receivables expense 3,150
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Charge for receivables expense

At 31 December 20X5 a company’s receivables totalled $100,000 and an allowance for receivables of $12,500 had been brought forward from the year ended 31 December 20X4.

It was decided to write off debts totaling $9,500. The allowance for receivables was to be adjusted to the equivalent of 5% of the receivables.

What charge for receivables expense should appear in the company’s statement of profit or loss for the year ended 31 December 20X5?

Answer

$
Closing allowance (100,000 – 9,500) x 5% 4,525
Opening allowance 12,500
Decrease in allowance (7,975)
Irrecoverable debts written off 9,500
Charge 1,525
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Adjusted Profit or loss

David’s draft financial statements for the year to 31 October 20X6 report a loss of $2,972. When he prepared the financial statements, David did not include an accrual of $3,252 and a prepayment of $1,668.

What is David’s profit or loss for the year to 31 October 20X6 following the inclusion of the accrual and prepayment?

Answer

$
Original loss (2,972)
Accrual (3,252)
Prepayment 1,668
Revised loss (4,556)
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Rental Expense and Prepayment

During 20X6, ABC, a limited liability company, paid a total of $15,000 for rent, covering the period from 1 October 20X5 to 31 March 20X7.

What figures should appear in the company’s financial statements for the year ended 31 December 20X6 ?

Answer

Statement of profit or loss and other comprehensive income

Rental Expense = $15,000 x 12/18 = $10,000

Statement of financial position

Prepayment = $15,000 x 3/18 = $2,500

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Rental income in the statement of profit or loss

XYZ , a limited liability company, receives rent for subletting part of its office premises to a number of tenants.

In the year ended 31 December 20X7 XYZ received cash of $79,650  from its tenants.

Details of rent in advance and in arrears at the beginning and end of 20X7 are as follows:

31 December
20X7 20X6
$ $
Rent received in advance 7,100 6,150
Rent owing by tenants 4,575 4,225

All rent owing was subsequently received

What figure for rental income should be included in the statement of profit or loss of XYZ for 20X7?

Answer

RENTAL INCOME ACCOUNT
$ $
Opening rent owing 4,225 Opening rent in advance 6,150
Rent income (balancing figure) 79,050 Cash received 79,650
Closing rent in advance 7,100 Closing rent owing 4,575
90,375 90,375
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Rent expense

A business compiling its financial statements for the year to 31 January each year pays rent quarterly in advance on 1 January, 1 April, 1 July and

1 October each year. After remaining unchanged for some years, the rent was increased from $6,000 per year to $7,500 per year as from 1 July 20X3.

Which of the following figures is the rent expense which should appear in the statement of profit or loss for year ended 31 January 20X4?

Answer

5 months/12 months x $6,000 = $2,500

7 months/12 months x $7,500 = $4,375

Total rent: $2,500 + $4,375 = $6,875

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Correct for gas charge in statement of profit or loss

The year end of ABC Co is 30 November 20X0. The company pays for its gas by a standing order of $2,400 per month. On 1 December 20W9, the statement from the gas supplier showed that ABC Co had overpaid by $800. ABC Co received gas bills for the four quarters commencing on 1 December 20W9 and ending on 30 November 20X0 for $5,200, $5,600, $8,400 and $8,000 respectively.

What is the correct charge for gas in ABC’s statement of profit or loss for the year ended 30 November 20X0?

Answer

GAS SUPPLIER ACCOUNT 
$ $
Balance b/fwd 800
Bank $2,400 x 12 28,800 28-Feb invoice 5,200
31-May invoice 5,600
31-Aug invoice 8,400
30-Nov invoice 8,000
             30-Nov bal. c/d 2,400
29,600 29,600
GAS ACCOUNT
$ $
28-Feb invoice 5,200
31-May invoice 5,600
31-Aug invoice 8,400
30-Nov invoice 8,000 30-Nov SPL 27,200
27,200 27,200

 

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Diesel fuel to be used

Diesel fuel in inventory at 1 November 20X5 was $3,125 , and there were invoices awaited for $425. During the year to 31 October 20X6, diesel fuel bills of $21,350 were paid, and a delivery worth $325 had yet to be invoiced. At 31 October 20X6, the inventory of diesel fuel was valued at $2,450.

What is the value of diesel fuel to be charged to the statement of profit or loss and other comprehensive income for the year to 31 October 20X6?

Answer

Diesel fuel purchased

Balance c/fwd = Balance b/fwd + purchase – payments

$
Balance b/fwd (425)
Payments 21,350
Balance c/fwd 325
Purchases 21,250
Cost of fuel used
$
Opening inventory 3,125
Purchases 21,250
Closing inventory (2,450)
Transfer to SPL 21,925
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Rent expense

A business compiling its financial statements for the year to 31 July each year pays rent quarterly in advance on 1 January, 1 April, 1 July and 1 October each year. The annual rent was increased from $15,000 per year to $18,000 per year as from 1 October 20X5.

What figure should appear for rent expense in the business’s statement of profit or loss and other comprehensive income for the year ended 31 July 20X6?

Answer

$
August to September 15,000 x 2/12 2,500
October to July 18,000 x 10/12 15,000
Rental Expense 17,500
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Rent was paid in advance

A company has sublet part of its offices and in the year ended 30 November 20X5 the rent receivable was:

Until 30 June 20X5 $2,100 per year
From 1 July 20X5 $3,000 per year

Rent was paid quarterly in advance on 1 January, April, July, and October each year.

What amounts should appear in the company’s financial statements for the year ended 30 November 20X5?

Answer

$
Statement of profit or loss
December to June 2,100 x 7/12 1,225
July to November 3,000 x 5/12 1,250
Rent receivable 2,475

Statement of financial position

Sundry payables 3,000 x 1/12 =$250 (December rent received in advance)

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Expense for oil

At 31 March 20X4 a company had oil in hand to be used for heating costing $2,050 and an unpaid heating oil bill for $900.

At 31 March 20X5 the heating oil in hand was $2,325 and there was an outstanding heating oil bill of $800 .

Payments made for heating oil during the year ended 31 March 20X5 totaled $8,650

Based on these figures, what amount should appear in the company’s statement of profit or loss and other comprehensive income for heating oil for the year?

Answer

Used Oil = opening oil + purchase – ending oil

Closing accrual for oil = opening accrual + purchase – payment

Purchase = Closing accrual for oil + payment – opening accrual

= 800 + 8,650 – 900= 8,550

So used oil = $2,050 +8,550 – 2,325= 8,275

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Expense and Accrual

A company pays rent quarterly in arrears on 1 January, 1 April, 1 July and 1 October each year. The rent was increased from $22,500 per year to $30,000 per year as from 1 October 20X4.

What rent expense and accrual should be included in the company’s financial statements for the year ended 31 January 20X5?

Answer

$
February to March 20X4 (5,625 x 2/3) 3,750
April to June 5,625
July to September 5,625
October to December 7,500
January 20X5 (7,500 x 1/3) 2,500
Rent Expense for the year 25,000

Accrual for Rental= 7,500 x 1/3 = 2,500

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Rental Income & Rent received in advance

ABC company receives rent for subletting part of its office block.

Rent, receivable quarterly in advance, is received as follows:

Date of receipt Period covered $
1 October 20X3 3 months to 31 December 20X3 15,000
30 December 20X3 3 months to 31 March 20X4 15,000
4 April 20X4 3 months to 30 June 20X4 18,000
1 July 20X4 3 months to 30 September 20X4 18,000
1 October 20X4 3 months to 31 December 20X4 18,000

What figures, based on these receipts, should appear in the company’s financial statements for the year ended 30 November 20X4 ?

Answer

Receipt $
1 October 20X3 (15,000 x 1/3) 5,000
30 December 20X3 15,000
4 April 20X4 18,000
1 July 20X4 18,000
1 October 20X4 (18,000 x 2/3) 12,000 (6,000 Credit rent in advance)
Credit to statement of profit or loss 68,000

Statement of profit or loss

$68,000 Credit

Statement of financial position

Rent received in advance (Cr) $6,000

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Amortisation for Patent

ABC Co purchased a patent on 31 December 20X5 for $375,000.

ABC  Co expects to use the patent for eight years, after which it will be valueless. According to IAS 38 Intangible assets, what amount will be amortised in ABC Co’s statement of profit or loss and other comprehensive income for the year ended 31 December 20X6?

Answer

The patent should be amortised over its useful life of 8 years.

(375,000-0) /8 = $46,875

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Profit or loss on disposal after revaluation

A company purchased an asset on 1 January 20X4 at a cost of $250,000. It is depreciated over 50 years by the straight line method (nil residual value), with a proportionate charge for depreciation in the year of acquisition and the year of disposal. At 31 December 20X5 the asset was re-valued to $300,000. There was no change in the expected useful life of the asset.

The asset was sold on 30 June 20X6 for $298,750.

What profit or loss on disposal of the asset will be reported in the statement of profit or loss of the company for the year ended 31 December 20X6?

Answer

Annual depreciation was initially $250,000/50 years = $5,000.

After revaluation, annual depreciation is $300,000/48 years = $6,250.

$
Valuation, 1 January 20X6 300,000
Accumulated depreciation to 30 June 20X6 (6/12 x $6,250 ) 3,125
Carrying amount at 30 June 20X6 296,875
 Sale/disposal price 298,750
Profit on disposal in statement of profit or loss 1,875

Note: The balance on the revaluation surplus at 30 June will be transferred to realised profits (retained profits reserve), but this will not be reported as profit in the statement of profit or loss.

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Depreciation charge for revising the scrap value

AAA Co purchased a machine with an estimated useful life of 5 years for $34,000 on 30 September 20X3. AAA Co planned to scrap the machine at the end of its useful life and estimated that the scrap value at the purchase date was $4,000. On 1 October 20X6, AAA Co revised the scrap value to $2,000 due to the decreased value of scrap metal.

What is the depreciation charge for the year ended 30 September 20X7?

Answer

Carrying amount at 1.10.X6: 34,000 – ((34,000 – 4,000) × 3/5) = $16,000 Revised depreciation charge:

(Carrying amount – revised residual value)/remaining useful life

= (16,000 – 2,000 )/2 = $7,000

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Carrying amount of asset with revised useful life

XYZ Co purchased an asset for $25,000 on 1.1.X3. It had an estimated useful life of 5 years and it was depreciated using the straight line method. On 1.1.X5 XYZ Co revised the remaining estimated useful life to 4 years.

What is the carrying amount of the asset at 31.12.X5?

Answer

Carrying amount at 1.1.X5 = 25,000 – (25,000 x 2/5) = $15,000

New depreciation charge = Carrying amount/Revised useful life

= $15,000 /4 years = $3,750

Carrying amount at 31.12.X5 = $15,000 – $3,750  = $11,250

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Profit or loss on disposal with the agreed trade-in value

A non-current asset (cost $35,000, depreciation $22,000 ) is given in part exchange for a new asset costing $43,000. The agreed trade-in value was $15,000. Which of the following will be included in the statement of profit or loss?

Answer

$
Carrying amount at disposal (35,000 – 22,000 ) 13,000
Trade-in allowance 15,000
Profit on disposal 2,000
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Depreciation Charge

ABC Co purchases a motor vehicle on 30 September 20X4 for $3,750 on credit. ABC Co has a policy of depreciating motor vehicles using the reducing balance method at 20% per annum, pro rata in the years of purchase and sale.

What are the correct ledger entries to record the purchase of the vehicle at 30 September 20X4 and what is the depreciation charge for the year ended 31 December 20X4?

Answer

To record the purchase of the asset:

Dr. Non-current assets – cost $3,750
Cr. Payables $3,750

Depreciation charge is 3,750 x 20% x 3/12 = $187.5

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Revaluation surplus & depreciation charge

Jon is entering an invoice for a new item of equipment in the accounts. The invoice shows the following costs:

Water treatment equipment $20,000
Delivery $650
Maintenance charge $2,090
Sales tax $4,027
Invoice total $26,767

Jon is registered for sales tax. What is the total value of capital expenditure on the invoice?

Answer

Water treatment equipment $20,000
Delivery $650
$20,650
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Revaluation surplus & depreciation charge

At 31 December 20X5 ABC, a limited liability company, owned a building that had cost $200,000 on 1 January 20W6.

It was being depreciated at 5% per year.

On 31 December 20X5 a revaluation to $250,000 was recognized. At this date the building had a remaining useful life of 10 years.

What is the balance on the revaluation surplus at 31 December 20X5 and the depreciation charge in the statement of profit or loss for the year ended 31 December 20X6 ?

Answer

Revaluation surplus = fair value – carrying amount

Revaluation surplus = (250,000 – (200,000 – (200,000 x 5% x 10)) = $150,000.

Depreciation charge = (250,000/10) = $25,000

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Depreciation

XYZ Co acquired a lorry on 1 April 20X3 at a cost of $7,500. The lorry has an estimated useful life of four years, and an estimated resale value at the end of that time of $1,500. XYZ Co charges depreciation on the straight line basis, with a proportionate charge in the period of acquisition.

What will the depreciation charge for the lorry be in XYZ Co ‘s accounting period to 31 August 20X3?

Answer

Depreciation charge =

[($7,500 – $1,500)/4 years] x (5 months /12 months) = $625

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Affecting Profit with Errors

Y purchased some plant on 1 January 20X2 for $9,500. The payment for the plant was correctly entered in the cash book but was entered on the debit side of the plant repairs account.

Y charges depreciation on the straight line basis at 20% per year, with a proportionate charge in the years of acquisition and disposal, and assuming no scrap value at the end of the life of the asset.

How will Y’s profit for the year ended 30 April 20X2 be affected by the error?

Answer

$
DEBIT Property, plant and equipment $9,500
CREDIT Plant repairs $9,500
DEBIT Depreciation expense $633*
CREDIT Accumulated depreciation $633

Profit is understated by $9,500 – $633 = $8,867

*9,500 x 20% x 4/12= $633

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Carrying amount of non-current assets

The carrying amount of a company’s non-current assets was $50,000 at 1 August 20X4. During the year ended 31 July 20X5, the company sold non-current assets for $6,250 on which it made a loss of $1,250. The depreciation charge for the year was $5,000. What was the carrying amount of non-current assets at 31 July 20X5?

Answer

Gain(loss) on disposal = proceeds – carrying amount of disposal

Carrying amount of disposal = proceeds – gain(loss)

$ $
Carrying amount at 1st August 20X4 50,000
Less depreciation (5,000)
Proceeds 6,250
Loss 1,250
carrying amount of disposal (7,500)
Therefore carrying amount 37,500
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Profit or loss on disposal for fixed asset exchange

A car was purchased by a newsagent business in June 20X3 for:

$
Cost 40,000
Road tax 600
Total 40,600

The business adopts a date of 31 December as its year end.

The car was traded in for a replacement vehicle in April 20X6 at an agreed value of $20,000.

It has been depreciated at 25% per annum on the reducing balance method, charging a full year’s depreciation in the year of purchase and none in the year of sale.

What was the profit or loss on disposal of the vehicle during the year ended December 20X6?

Answer

$
Cost 40,000
20X3 Depreciation (10,000)
30,000
20X4 Depreciation (7,500)
22,500
20X5 Depreciation (5,625)
16,875
20X6 Part exchange 20,000
Profit 3,125
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Cost of the machine

W bought a new printing machine. The cost of the machine was $120,000 . The installation costs were $7,500  and the employees received training on how to use the machine, at a cost of $1,000. Before using the machine to print customers’ orders, a test was undertaken and the paper and ink cost $1,500.

What should be the cost of the machine in the company’s statement of financial position?

Answer

$
Cost of machine 120,000
Installation 7,500
Testing 1,500
129,000
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Recognize Transactions incorrectly

A manufacturing company receives an invoice on 30 April 20X5 for work done on one of its machines. $6,375 of the cost is actually for a machine upgrade, which will improve efficiency. The accounts department do not notice and charge the whole amount to maintenance costs. Machinery is depreciated at 20% per annum on a straight-line basis, with a proportional charge in the years of acquisition and disposal. By what amount will the profit for the year to 31 December 20X5 be understated?

Answer

The profit will be understated

= cost less 8 months depreciation = 6,375 –  6,375 x 20% x 8/12

= 6,375 -850= $5,525

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Errors affecting profit

A business purchased a motor car on 1 July 20X6 for $5,000. It is to be depreciated at 10 per cent per year on the straight line basis, assuming a residual value at the end of ten years of $1,000, with a proportionate depreciation charge in the years of purchase and disposal.

The $5,000 cost was correctly entered in the cash book but posted to the debit of the motor vehicles repairs account.

How will the business profit for the year ended 31 December 20X6 be affected by the error?

Answer

$
Repairs cost overstated 5,000
Depreciation understated ((5,000 – 1,000) x 10% x 6/12) (200)
Profit understated 4,800
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Balance on the revaluation surplus

A company bought a property four years ago on 1 January for $42,500. Since then property prices have risen substantially and the property has been revalued at $52,500.

The property was estimated as having a useful life of 20 years when it was purchased.

What is the balance on the revaluation surplus reported in the statement of financial position?

Answer

$
Valuation 52,500
Carrying amount (42,500 x 16/20) (34,000)
Revaluation surplus 18,500
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Correct balance on the asset register

An asset register showed a carrying amount of $16,865. A non-current asset costing $3,750 had been sold for $1,000, making a loss on disposal of $313. No entries had been made in the asset register for this disposal.

What is the correct balance on the asset register?

Answer

Gain (loss) on disposal = proceeds – carrying amount of disposal

Carrying amount of disposal = proceeds – gain(loss)

$
Balance b/d 16,865
Less: Carrying amount of non-current asset sold (1,000 + 313) 1,313
15,552
_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Inventory value using periodic weighted average cost (AVCO)

A firm has the following transactions with its product R.

1 January 20X3 Opening inventory: nil
10 February 20X3 Buys 15 units at $145 per unit
12 February 20X3 Buys 17 units at $120 per unit
9 April 20X3 Sells 13 units at $195 per unit
13 August 20X3 Buys 11 units at $95 per unit
15 December 20X3  Sells 17 units at $195 per unit

The firm uses periodic weighted average cost (AVCO) to value its inventory. What is the inventory value at the end of the year?

Answer

Price per unit under periodic weighted average cost

= Total cost /(opening quantity + total quantity received)

= ($0+$145 x 15 + $120 x 17 + $95 x 11)/(0+15+17+11)

= $122.33 per unit.

Valuation of closing inventory of 13 units

= (0+15+17+11–13–17) x $122.33 = 13 x $122.33

= $1,590.29

 

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖
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Adjusting inventories for financial statements

The inventory value for the financial statements of ABC Co for the year ended 31 December 20X7 was based on an inventory count on 9 January 20X8, which gave a total inventory value of $209,050.

Between 31 December and 9 January 20X8, the following transactions took place:

$
Purchases of goods 2,150
Sales of goods (profit margin 25% on sales) 3,500
Goods returned by ABC Co to supplier 175

What adjusted figure should be included in the financial statements for inventories at 31 December 20X7?

Answer

$
Inventory count value 209,050
Less: purchases (2,150)
Add: sales (3,500 x 75/100) 2,625
Add: goods returned 175
Inventory figure 9,700

 

_ ស្វែងរកឬបកប្រែពាក្យផ្សេងទៀតនៅប្រអប់នេះ៖
_ខាងក្រោមនេះជាសៀវភៅនិងឯកសារសម្រាប់ការងារនិងរៀនគ្រប់ប្រភេទ៖