ACCT 1211 Assignment 7: Comprehensive Accounting Problems

This assignment solution covers various accounting concepts and problems. Question 1 presents a single-step income statement, balance sheet, and capital account calculations for Nothing New Ltd. Question 2 analyzes the company's net profit percentage. Question 3 provides journal entries for transactions in the books of Toy Store and Toy Warehouse. Question 4 delves into inventory valuation using both average cost and FIFO methods, including detailed calculations and a comparison of gross profit under each method. The assignment demonstrates the application of accounting principles to real-world business scenarios, including financial statement preparation, journal entries, and inventory management.

Running head: ACCOUNTING
ACCOUNTING
Name of the Student:
Name of the University:
Author’s Note:

1ACCOUNTING
Question 1
A.
Single Step Income Statement for Nothing New Ltd
Particulars $ $
Revenues
Sales 2000000
Less: Sales Return 40000
Less: Discount on sales 30000 1930000
Interest Revenue 200
Total Revenues 1930200
Expenses
Cost of Good Sold 1140000
Accumulated Amortization,
Furniture 80000
General Expenses 200,000
Interest Expense 8,000
Interest Payable 1,000
Salary Payable 15,000
Selling Expenses 400,000
Total Expenses 1844000
Net Profit 86200
B.
Particulars $ $
Nathan Capital Balance 241800
Add: Net Profit 86200
less: Drawings 50000
Nathan Closing Capital
Balance 278000
C.

2ACCOUNTING
Balance Sheet as on
Assets
Non-Current Assets $ $
Furniture 320000
less: Depreciation 80000 240000
Total Non-Current Assets 240000
Current Assets
Inventory 200000
Account Receivable 110000
Supplies 20000
Cash 20000
Total Current Assets 350000
Total Assets 590000
Equities and Liabilities
Nathan's Capital 278000
Total Equity 278000
Non-Current Liabilities
Long term loan 130000
Total Non-Current Liabilities 130000
Current Liabilities
Account Payable 60000
Interest Payable 1000
Salary Payable 15000
Unearned Revenues 10000
Total Current Liabilities 86000
Total Equities and Liabilities 494000
Question 2
A
SMultiple Step Income Statement for Nothing New Ltd
Particular $ $
Revenues
Sales
200000
0
Less: Sales Return 40000
Less: Discount on sales 30000
193000
0
Cost of Good Sold
114000
0

3ACCOUNTING
Gross Profit 790000
Operating Expenses
Accumulated Amortization, Furniture 80000
General Expenses 200,00
0
Salary Payable 15,000
Selling Expenses 400,00
0
Total Operating Expenses 695000
Non-Operating Items
Interest Expense -8,000
Interest Payable -1,000
Interest Revenue 200
Total Non-Operating item -8,800
Net Profit 86,200
B.
The business is not able to generate the net profit percentage which was anticipated by the
management of the company.
Question 3
In the books of Toy Store
Date Particulars $ $
Nov-05 Purchase A/c ……………………………….Dr
7500
0
To Toy Warehouse A/c
7500
0
Nov-09 Toy Warehouse A/c………………………….Dr
1000
0
To Purchase Return A/c
1000
0
Nov-13 Toy Warehouse A/c………………………….Dr
5000
0
To cash A/c
5000
0

4ACCOUNTING
Nov-19 Toy Warehouse A/c…………………………Dr
1500
0
To Cash A/c
1500
0
In the books of Toy Warehouse
Date Particulars $ $
Nov-05 Toy Store A/c………………...……Dr
7500
0
To Sales A/c
7500
0
Nov-09 Sales Return A/c…………………Dr
1000
0
To Toy Store A/c
1000
0
Nov-13 Cash A/c……………………………..Dr
5000
0
To Toy Store A/c
5000
0
Nov-19 Cash A/c………………………………….Dr
1500
0
To Toy Store A/c
1500
0

5ACCOUNTING
Question 4
Inventory Ledger (Average Method):
Purchase Cost of Goods Sold Balance Inventory
Date Unit
Cost
per
Unit
Total
Amount
Uni
t
Cost
per
Unit
Total
Amount
Uni
t
Cost per
Unit
Total
Amount
Feb 40 $20 $800
March 50.00 $30 $1,500 40 $20 $800
50 $30 $1,500
90 $26 $2,300
March 60 26 1560 60 $26 $1,560
30 $24.67 $740
April 100 $40 $4,000 30 $24.67 $740
100 $40 $4,000
130 $36.46 $4,740
April 40 36.46 1458.4 40 36.46 1458.4
90 $36.46 $3,282
May 150 50 7500 150 50 7500
240 $44.92 $10,782
May 90 $44.92 $4,043.10 90 44.92333 4043.1
May 150 $45 $6,739
Inventory Ledger (FIFO Method):
Purchase Cost of Goods Sold Balance Inventory
Date Unit
Cost
per
Unit
Total
Amount
Uni
t
Cost
per
Unit
Total
Amount
Uni
t
Cost
per
Unit
Total
Amount

6ACCOUNTING
Feb 40 $20 $800
March 50 $30 $1,500 40 $20 $800
50 $30 $1,500
March 40 20 800
20 30 600 30 $30 $900
April 100 $40 $4,000 30 $30 $900
100 $40 $4,000
April 30 30 900 30 $30 $900
10 40 400 90 $40 $3,600
May 150 50 7500 90 40 3600
150 50 7500
May 90 $40 $3,600 150 $50 $7,500
31-Oct 90 $3,600 115 $7,500
Calculation of Gross Profit:-
Particulars
Average
Cost FIFO LIFO
Sales Revenue $25,000 $25,000 $25,000
Less: Cost of Goods Sold $0 $3,600 $0
GROSS PROFIT $25,000 $21,400 $25,000
Calculation of Gross Profit:-
Particulars
Average
Cost FIFO
Beginning Inventory $800 $800
Net Purchases $5,500 $5,500
Cost of Goods Available $6,300 $6,300
Ending Inventory $6,739 $7,500
Cost of Goods Sold ($439)
($1,200
)

7ACCOUNTING