Corporate Accounting: Journal Entries, Financial Statements, and Notes to Accounts

Running head: CORPORATE ACCOUNTING
Corporate Accounting
Name of the Student:
Name of the University:
Authors Note:

1
CORPORATE ACCOUNTING
Contents
Answer 1:.........................................................................................................................................2
Requirement (a):..........................................................................................................................2
Requirement (b):..........................................................................................................................3
Requirement (c):..........................................................................................................................3
References:......................................................................................................................................6
Appendix 1:.....................................................................................................................................7
Appendix 2:...................................................................................................................................12

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CORPORATE ACCOUNTING
Answer 1:
Requirement (a):
Journal entries:
Date Account titles and
explanations Debit ($) Credit
($)
30-Jun-18 Land 50000
50000
30-Jun-18 Damages 150000
150000
30-Jun-18 Profit and loss account 150000
Damages 150000
30-Jun-18 Bad debt (70000 x 90%) 63000
63000
Profit and loss account 63000
63000
Credit note is in respect of next financial year
Accounts receivable
(Being the bad debt recognized due to the
Bad debt (70000 x 90%)
(Being bad debt recognized against profit and loss
Share capital issued already recorded earlier
Revaluation reserve
(Being the land revalued)
Damages payable
(Being damages payable)
(Being damages recognized against profit and loss

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CORPORATE ACCOUNTING
Requirement (b):
Statement of financial position:
It is a statement reflecting the position of assets and liabilities of an organization as on a
particular date. The statement of financial position of Simrex Limited below has been prepared
taking into consideration the balances provided in Trail Balance and the journal entries made in
the first part of the document (Ball, Li and Shivakumar, 2015).
Statement of profit and loss:
Statement of profit and loss of the company shows the amount of profit earned from business
operations or loss incurred in business. In this case despite the loss due to penalty for damages
and bad debt the company has managed to earn a net profit of $117,250 after payment of tax.
Thus, the company has been able to manage its resources quite well to earn significant amount of
profit for the financial year 2017-18 (Zeff, 2016).
Statement of changes in equity:
Statement of changes in equity shows the effects of transactions that affect the shareholders’
equity. The statement of changes in equity of Simrex Limited shows (Appendix 2) that the equity
of shareholders have increased in the current year.
Requirement (c):
Notes to financial accounts: