Accounting for Business Decision

This document provides study material and solved assignments on Accounting for Business Decision. It covers topics such as purchases, accounts receivable, cash, rent, profit or loss, cash receipts, bank reconciliation statement, sales, allowance for doubtful debts, inventory, depreciation methods, and more.

Accounting for business decision

Table of Contents
WEEK 6...........................................................................................................................................1
WEEK 7...........................................................................................................................................1
a)..................................................................................................................................................1
b).................................................................................................................................................1
c)..................................................................................................................................................2
d).................................................................................................................................................2
WEEK 8...........................................................................................................................................2
a)..................................................................................................................................................2
b).................................................................................................................................................3
c)..................................................................................................................................................3
Week 9.............................................................................................................................................4
a. .................................................................................................................................................4
b...................................................................................................................................................4
Week 10...........................................................................................................................................5
a...................................................................................................................................................5
b...................................................................................................................................................6
c...................................................................................................................................................7

WEEK 6
Particulars
Debit Credit
a)
Purchases x
To Accounts Payable x
b)
Accounts Receivable x
To Sales x
c)
Cash x
To Accounts Receivables x
d)
Rent x
To Bank x
e)
Profit or loss x
To Retained Earnings x
WEEK 7
a)
Cash Receipts Amount Cash Payment Amount
Balance 292704 Balance 265074
Credit for ETF 644
Account &
Transaction fees 120
1

Interest Earned 44
Total 293392 265194
b)
Cash and Bank account
Particulars Amount Particulars Amount
Balance 21200
Cash Receipts 293392 Cash Payment 265194
By bal 49398
314592 314592
c)
Bank Reconciliation Statement
Balance as per Cash book 49398
Add
Outstanding cheques
Ch no 3456 1448
Ch no 3457 84
Ch no 3460 70
Ch no 3462 410 2012
Less
Cash receipts not included 10090
Dishonoured Cheque 136 10226
Balance as per bank statement 41184
2

d)
Company is required to report the cash and bank balance as per the bank statements after
making all the adjustments in cash and bank book. Therefore the amount to be reported in
balance sheet is $41184
WEEK 8
a)
Particulars Debit Credit
1
Accounts Receivable 1195000
To Sales 1195000
2
Sales 24100
To Sales Return 24100
3
Cash 1400000
To Accounts Receivable 1400000
4
Allowance for doubtful debts 15851
To Accounts Receivable 15851
b)
Allowance for doubtful debts
Particulars
Opening 12100
Less ; Accounts written off 15851
-3751
3

Required balance of accounts
receivable 13500
Adjusting entry 17251
(13500 + 3751)
Particulars Debit Credit
Bad Debts 17251
To Allowance for
doubtful debts 17251
Account Receivable
Particulars Amount Particulars Amount
Balance 849555 Bank 1400000
Sales 1195000
Allowance
for doubtful
debts 17251
Bal c/d 627304
2044555 2044555
Balance sheet (extract)
Current Assets
Accounts Receivable 627304
c)
Particulars Debit Credit
Bank 2400
To bad debts recovered 2400
4

Week 9
a.
Partic
ulars
Purch
ases Sales
Balanc
e
Invent
ory ID
Descri
ption Date Qty
Unit
price Cost Qty
Unit
price Cost
Quanti
ty
Unit
price Value
Openin
g
1st
June 6100 2.2 13420
101
Purcha
ses
4th
June 4600 2.25 10350 10700 23770
102 Sales
9th
June 4100 5 20500 6600 14750
103
Purcha
ses
12th
June 4100 2.4 9840 1070 24590
104 Sales
21st
June 6000 5 30000 4700 11190
105
Purcha
ses
26th
June 3100 2.5 7750 7800 18940
Lost 100 2.25 225
Closin
g
30th
June 7700 18715
b.
5

Income statement
Particulars Amount
Sales 23625
less: Cost of goods sold 22645
Add: opening inventory 13420
Add: Purchases 27940
Less: Closing inventory 18715
Gross profit 980
Less: Operating expenses 0
Net operating income 980
Week 10
a.
Straight line method
Depreciation expense under
SLM
(Asset cost-residual
value)/Useful life of asset
(52000-12000)/4
10000
Depreciation expense for the
year 2019-20 $10000
6

Diminishing balance method
Depreciation expense under WDV (Asset cost*depreciation rate)
$52000*31%
16120
Depreciation expense $16120
Unit of production method
Depreciation expense
[(cost of the asset- residual value)*Units for
year/estimated capacity]
(52000-12000)*78000/200000
$40000*0.39
15600
Depreciation expense under unit production
technique $15600
b.
7

Particulars Amount
Cost of delivery van 52000
less: depreciation rate 31.00%
Balance 16120
Depreciation at end of 1 year 16120
Balance cost at end of 1st year 35880
Depreciation for year 2 11122.8
Balance cost at end of 2nd year 24757.2
Adjusting entry at 30th June
2021
Particulars Debit Credit
Depreciation expense account
Dr. 24757
To Accumulated depreciation 24757
c.
Particulars Amount
Cost of delivery van 52000
less: residual value 12000
8

Balance 40000
Useful life 4
Depreciation at end of 1 year 10000
Balance cost at end of 1st year 42000
Depreciation for year 2 10000
Balance cost at end of 2nd year 32000
Balance sheet
Particulars Amount
Asset cost 52000
less: Accumulated depreciation 20000
Net balance 32000
9