Financial Accounting Management | Assignment

Running head: Financial Accounting Management
Financial Accounting Management
Name of the Student
Name of the Organization
Author’s note-

1Financial Accounting Management
Table of Contents
Answer to question 4.1....................................................................................................................2
Debtors Account..........................................................................................................................2
Solution of T table...........................................................................................................................2
Answer to question 4.2....................................................................................................................3
Creditors Control Account...........................................................................................................3
Solution to T table...........................................................................................................................3
Answer to question 5.1....................................................................................................................4
Answer to 5.2...................................................................................................................................5
Bibliography....................................................................................................................................8

2Financial Accounting Management
Answer to question 4.1
Debtors Account
Solution of T table

3Financial Accounting Management
Answer to question 4.2
Creditors Control Account
Solution to T table

4Financial Accounting Management
Answer to question 5.1
Profit and loss statement
In the books of Cute Kids
Statement of profit and loss and comprehensive income
For the year ended 31st December, 2018
Particulars Amount Amount Amount
Sales 1,360,000
Less: Cost of Sales (710,000)
GROSS PROFIT 650,000
Other Income:
Rent Income 6,000
Less: Rent received in advance 2,000 4,000
TOTAL REVENUE 654,000
Operating Expenses:
Advertising 24,500
Less: Administration Exp. 4,000 20,500
Credit Losses/Bad Debts 6,500
Administration Expenses 75,000
Add: Additional Admin Exp. 4,000 79,000
Rates 22,500
Less: Prepaid Rates 8,000 14,500
Telephone 6,000
Add: Outstanding Telephone
Expense 800 6,800
Salaries & Wages 175,000
Add: Outstanding Salary 5,170 180,170
Security Fees 24,000
Add: Outstanding Securify Fees 2,400 26,400
Packing Materials Consumed 19,400
Allowance for Bade Debts 7,900
Depreciation on Equipment 23,680
TOTAL OPERATING EXPENSES 384,850

5Financial Accounting Management
NET INCOME BEFORE INTEREST 269,150
Finance Expenses:
Interest on Mortgage Bond 7,500
Interest Income (2,100)
Add: Outstanding Interest Income (4,200) (6,300)
NET FINANCE EXPENSES 1,200
NET PROFIT FOR THE PERIOD 267,950
Above is the solution of 5.1 and
5.2
Answer to 5.2
Statement of changes in equity
For the year ended 31st December, 2018
Particulars
Amoun
t
Amoun
t
Opening Capital Balance
446,60
0
Add: Net Profit for the
period
268,16
8
714,76
8
Less: Drawings
(32,500
)
Closing Capital Balance
682,26
8
Workings of solution 5.1:

6Financial Accounting Management
Prepaid rates
Rates= 22,500
Less: rates for the period of 6 months- (6,500)
Net Amount-16000
Time period- 6 months (January to June, 2018)
Calculation of prepaid rates: (16,000 * 6/12) = 8,000
Outstanding security fees
Security fees for 11 months = 24,000
Lets assume, that monthly security fee before 1st july, 2018= x
Therefore, total fee from 1st jan, 2018 to 30th june, 2018= 6 months * x= 6x
After the increase of 1st july, monthly fees would be= x +(x* 20%) = x + [x* (1/5)] = 6x/5
Therefore, from 1st july 2018 to 30th November; total security fees would be= 5 * 6x/5 = 6x
Therefore,
6x + 6x= 24000
12x= 24000
x= 24000/12
x= 2000
Hence, monthly rent after 1st july 2018, would be:
2000+ (2000* 20%)
= 2000 + 400
= 2400
Allowance for bad debts

7Financial Accounting Management
Debtors control= 1,58,000
Bad debt allowance is 5%
Allowance for bad debts = (1,58,000 * 5%)
= 7,900
Depreciation on equipment
Equipment= 1,85,000
Accumulated depreciation= 66,600
= 1,18,400
Depreciation accumulated = 5%
Calculating the net depreciation on equipment:
= ( 1,18,400 * 5%)
= 23,680
Interest on mortgage loan
Mortgage loan = 125,000 ( according to trial balance )
Interest on mortgage = 8%
However, the loan got effected as on 31st march, 2018.
Hence, number of months will be taken consideration of is 9 ( 9/12).
Calculation:
125000 * 8%
= 10,000
By considering 9 months, calculation would be:
125000* 8% * (9/12)
= 10000 * (9/12)
= 10000 * 3/4

8Financial Accounting Management
= 7500
Bibliography
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in life and pension insurance. Risks, 6(3), p.68.
Denis, D.J. and McKeon, S.B., 2018. Persistent operating losses and corporate financial
policies. Available at SSRN 2881584.
Dowling, M.D., Thompson, A.R., Levitan, A. and Severino, R.A., Wells Fargo Bank NA,
2018. International trade finance blockchain system. U.S. Patent Application 15/639,986.
Du, W., Tepper, A. and Verdelhan, A., 2018. Deviations from covered interest rate parity. The
Journal of Finance, 73(3), pp.915-957.
Friedrich, T., 2019. Transfers by force and deception lead to stability in an evolutionary learning
process when controlled by net profit but not by turnover.
Fuster, A., Plosser, M., Schnabl, P. and Vickery, J., 2019. The role of technology in mortgage
lending. The Review of Financial Studies, 32(5), pp.1854-1899.
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for Korean Students Falling into Bad Debt. Asian Economic Journal, 32(1), pp.3-14.
Ishihara, M. and Ching, A.T., 2019. Dynamic demand for new and used durable goods without
physical depreciation: The case of japanese video games. Marketing Science.

9Financial Accounting Management
Liang, Q., Chen, X., Chuc, K., Lubomirsky, D., Park, S., Yang, J.G., Venkataraman, S., Tran, T.,
Hinckley, K. and Garg, S., Applied Materials Inc, 2018. Chemical control features in wafer
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