Identify the appropriate accounting concept to be applied to the following:a. Trade

Identify the appropriate accounting concept to be applied to the following:

a. Trade receivables include a figure of $1000 that the owner knows is an irrecoverable debt. He wishes to leave this figure in trade receivables to show the highest value of current assets possible.

b. The owner of a successful business is planning for next year. She is considering showing her non current assets at the cost of replacement in order to show the highest value of non-current assets possible.

c. The owner of a business wishes to change the rate of depredation applied to his non-current assets in order to increase his profit for the year.

d. A business has not yet received an invoice for rent for the last three months of the year. The owner wishes to ignore this in order to increase her reported profit for the year.

The following balances were extracted from the books of Sophia’s business on

The following balances were extracted from the books of Sophia’s business on 1 June 2014.

Trade payables give a cash discount of 5 per cent if accounts are settled within 30 days.

Sophia gives a cash discount of 5 per cent to its credit customers who settle their accounts within 30 days.

During June 2014, the following transactions occurred.

Prepare the business’s three-column cash book for June 2014. Total the discount columns on this date. Post the totals of the discount columns to the discount accounts in the general ledger. Prepare the customer and supplier accounts recording the opening balances and the transactions in June 2014.

Calculate the amended profit/loss Kate has prepared a draft income statement for

Calculate the amended profit/loss Kate has prepared a draft income statement for her business for the year ended 28 February 2015 that shows a loss for the year of $1060. She then discovers the following errors:

a. Rent payable of $1250 had been paid in advance. This had not been recorded in the rent account.

b. Discounts allowed of $480 had been incorrectly credited to the discounts received account.

c. Returns outwards of $280 had been incorrectly credited to the purchases account.

d. An item of inventory of $960 had been omitted from the closing inventory.

e. Plant and machinery depreciation had been overstated by $750.

f. The credit balance on rents received of $1890 had been brought down as $1980.

Required

Calculate the amended profit or loss for the year. Show clearly whether each adjustment increases the loss, decreases the loss or has no effect on the loss for the year.

Calculate the amended profit/loss James has prepared a draft income statement for

Calculate the amended profit/loss James has prepared a draft income statement for his business for the year ended 31 December 2014 that shows a profit for the year of $4970. He then discovers the following errors:

a. Closing inventory had been understated by $1200.

b. Discount received of $240 had been entered on the debit side of that account.

c. The debit balance on the insurance account of $734 had been brought down as $743.

d. A purchase invoice of $5840 had been completely omitted from the records.

e. The rents received account had been overcast by $600.

f. An invoice of $125 for cleaning expenses had been incorrectly posted to wages.

Required

Calculate the amended profit or loss for the year. Show clearly whether each adjustment increases the profit, decreases the profit or has no effect on the profit.

Kimberly Watson opened a business on 1 September 2014. On that date

Kimberly Watson opened a business on 1 September 2014. On that date her business’s assets and liabilities were as follows.

During September the following transactions occurred.

Prepare the following books of prime entry for September 2014:

• General journal

• Three-column cash book

• Purchases journal

• Sales journal

• Returns outwards journal

• Returns inwards journal.

Post the entries in the books of prime entry to the purchases, sales and general ledgers.

The discount columns in the cash book should be totalled and posted to the general ledger.

Cherie has extracted a trial balance from her books of account at

Cherie has extracted a trial balance from her books of account at 31 March 2014. The trial balance totals do not agree and the difference has been posted to a suspense account. Cherie has found the following errors:

a. Purchases account had been overcast by $20.

b. A payment of $270 to a supplier, A. Davies, was posted to the account of P. Davies in error.

c. Cherie had taken drawings of $800. This was entered correctly in the cash book but had not been posted to the drawings account.

d. A receipt of $250 from Bernard, a customer, had been correctly entered h the cash book but had been posted to the wrong side of his account.

e. The debit balance on the stationery account of $2378 had been brought down as $2387.

Required 

Make any necessary entries in the suspense account to correct these errors and show the opening balance on the suspense account.

Maurice has two gilt shops. He does not keep full accounting records

Maurice has two gilt shops. He does not keep full accounting records but is able to provide the following information for the year ended 31 March 2015.

The list of balances at 1 April 2014 and 31 March 2015 is:

Maurice has provided the following additional information.

The cash takings for the year were $41,850. Before paying this money into the bank, Maurice used some of the cash received to pay for casual staff wages of $400 per month and personal drawings of $300 per month. Unfortunately, Maurice believes that some cash has been stolen during March but does not know how much.

a. Prepare the cash account to calculate the amount of stolen cash.

b. Prepare the sales ledger control account to calculate the amount of credit sales during the year.

c. Prepare the purchases ledger control account to calculate the amount of purchases during the year.

d. Prepare an income statement for the year ended 31 March 2015 and a statement of financial position at that date.

The following balances were extracted from the books of Apex Universal, a

The following balances were extracted from the books of Apex Universal, a wholesaler, on 1 November 2014.

Trade payables give a cash discount of 5 percent if accounts are settled within 30 days.

Apex Universal gives a cash discount of 2 percent to its credit customers who settle their accounts within 30 days. During November 2014, the following transactions occurred.

Prepare the business’s three-column cash book for November 2014. Total the discount columns on this date. Post the totals of the discount columns to the discount accounts in the general ledger.

Talpur has prepared a draft income statement for his business for the

Talpur has prepared a draft income statement for his business for the year ended 31 January 2015 that shows a profit for the year of $42,910. He then discovers the following errors:

a. The sales journal had been undercast by $350.

b. Repairs to a motor vehicle of $520 had been completely omitted from the records.

c. Rent paid of $1800 had been incorrectly posted to the light and heat account.

d. A purchases credit note of $845 had been completely omitted from the records.

e. Closing inventory had been overstated by $500.

f. A sales invoice of $2300 for Johns had been incorrectly posted to the account of Johnson.

Required

Calculate the amended profit for the year. Show clearly whether each adjustment increases the profit, decreases the profit or has no effect on the profit.

James and Alvo Ltd are wholesalers of bicycles. The company buys goods from

James and Alvo Ltd are wholesalers of bicycles. 

The company buys goods from a number of bicycle manufacturers. Manufacturers offer trade discounts for large orders. 

During October 2014 the following invoices were received.

James and Alvo Ltd sell bicycles to many retailers.

During October 2014 the following invoices were issued.

Prepare the following accounting records in the books of James and Alvo Ltd:

• Purchases journal

• Sales journal

• Purchases ledger accounts

• Sales ledger accounts

• Appropriate general ledger accounts.