Accounts: Liabilities and Depreciation Methods

Accounts

Table of Contents
TASK 1............................................................................................................................................3
QUESTION 1...................................................................................................................................3
Q1: Journal of Jim's Cleaning Services for the month of July....................................................3
QUESTION 2...................................................................................................................................3
A) Bank reconciliation statement for M&N Windows Ltd. at June 30, 2019:...........................3
(b) Reconciliation statement.......................................................................................................4
QUESTION 3...................................................................................................................................4
a) Journal entries by using net credit sales & ageing of account receivable...............................4
c) Calculation of amount of bed debts........................................................................................7
d) Reason of calculation difference between credit sales method and account receivable
method.........................................................................................................................................7
QUESTION 4...................................................................................................................................7
a) Determine the Ending inventory and Cost of Sales for the month of June, using the FIFO
costing method............................................................................................................................7
(b) Income statement of XY Ltd for the year ended 30 June 2019.............................................9
c) Perpetual Inventory system...................................................................................................10
QUESTION 5.................................................................................................................................10
Calculation of value of assets by using straight line and diminish rate method of depreciation.
...................................................................................................................................................10
Straight line method..................................................................................................................11
c) Value of heavier bass beat....................................................................................................12
d) Factors which consider in selecting appropriate method of depreciation.............................13
Q6: Liabilities and its elements:................................................................................................13
REFERENCES..............................................................................................................................16

TASK 1
QUESTION 1
Q1: Journal of Jim's Cleaning Services for the month of July
(a)
Date Particulars Debit Credit
01/07/20 Rent a/c Dr. 3600
To Cash a/c 3600
01/07/20 Insurance Policy a/c Dr. 1560
To Cash a/c 1560
10/07/20 Cash a/c Dr. 2800
To Unearned Revenues 2800
15/07/20 Purchases a/c Dr. 2340
To Cash a/c 2340
28/07/20 Salaries a/c Dr. 6080
To Cash a/c 5320
To Outstanding salaries 760
(b)
31/07/20 Unearned Revenues a/c Dr. 840
To Sales 840
QUESTION 2
A) Bank reconciliation statement for M&N Windows Ltd. at June 30, 2019:
Particulars Amount
Credit Balance as per bank statement 101160
Add: Deposit in transit 12540

Less: Interest earned on bank account -75
Add: Cheque recorded above value 540
Less: Unrepresented cheques -37407
Less: Service charges included in bank statement -150
Less: Electronic transfer from customer -3864
Add: Dishonoured cheque 3900
Less: Suspense -780
Debit Balance as per cash book 75864
(b) Reconciliation statement
A bank reconciliation statement refers to a summary of business and banking transactions
which reconciles an organisation's financial records with its bank account transactions and
amount. The statement focuses on the banking activities of the business like withdrawals,
deposits and other transactions which affect the bank account of the organisation or individual.
Bank reconciliation is still necessary even when most of the transactions take place using
electronic transfer of funds because it helps the business to establish effective financial internal
control to prevent frauds and errors. The reconciliation further helps and identify the difference
between bank balance and financial records (de Menezes Neto and Aguiar, 2019).
QUESTION 3
a) Journal entries by using net credit sales & ageing of account receivable.
Journal entries of
InvisiGuard Ltd
InvisiGuard Ltd
Debtors a/c 210000