Compulsory Component of Unit Assessment - Math Problem Example

Accounting Name Institution Date Question 1: Date Detail DR($) CR($) 31st May, 201x Rent expense 10,000 Bank 10,000 10,000 10,000 To record payment of rent for the month of May Question 2: Date Detail DR($) CR($) 30TH June, 201x Chuck (30*60) 1,800 Morgan (30*100) 3,000 Cash 4,800 4,800 4,800 To record May payment to Chuck and Morgan Question 3 Cost of the bed= cost of designing+ cost of manufacturing+ cost of transport and assembly. $(30,000+ 5,000+ 1,000) = $36,000 Date Detail DR($) CR($) 10th June, 201x Chinese Designer 20,000 30,000 AmericanManufacturers 5,000 Truck driver 1,000 Bank 36,000 36,000 36,000 To record payment of invoices for the designer, manufacturer, transport and assembly of the bed Question 4 Date Detail DR($) CR($) 1st June, 201x Purchase of ISLEEPs $(250*700) 175,000 Bank 175,000 175,000 175,000 To record the purchase of ISLEEPs and payment through a bank transfer Date Detail DR($) CR($) 2nd June, 201x UNE (debtor) $(100*3000) 300,000 Sale 300,000 300,000 300,000 To record sale of ISLEEPs to UNE on credit Date Detail DR($) CR($) 4th June, 201x Return Inwards $(50*3,000) 150,000 UNE (debtor) 150,000 150,000 150,000 To record the return of goods (ISLEEPs) by UNE Date Detail DR($) CR($) 6th June, 201x Cash/bank $(50*3,000) 150,000 Discount expense (30,000) (30,000) UNE (debtor) 120,000 120,000 120,000 To record payment of debtor after deducting an agreed percentage (10%) discount. Date Detail DR($) CR($) 15th June, 201x Purchase of ISLEEPs $(500*600) 300,000 Creditor 300,000 300,000 300,000 To record purchase of ISLEEPs on credit Date Detail DR($) CR($) 18th June, 201x Creditor 300,000 Bank 300,000 300,000 300,000 To record payment of ISLEEPs purchased on credit. Date Detail DR($) CR($) 19th June, 201x UWS (debtor) $(2,500*100) 250,000 Credit sales 250,000 250,000 250,000 To record sale of ISLEEPs to UWS on credit Date Detail DR($) CR($) 29th June, 201x Bank 240,000 Discount expense 10,000 UWS (debtor) 250,000 250,000 250,000 To record payment of ISLEEPs purchased by UWS on credit at a discount of $100 per an ISLEEP Question 5 Received Issue Balance date units Cost($) Value($) units Cost($) Value($) units Cost($) Value($) 1st June, 201x 250 700 175,000 250 700 175,000 2nd June, 201x 50 3,000 150,000 200 700 140,000 15th June, 201x 500 600 300,000 200 500 700 600 140,000 300,000 700 440,000 19th June, 201x 100 2,400 240,000 100 500 700 600 70,000 300,000 30th June, 201x 600 100@$700 $370,000 500@$600 Therefore the closing stock is 600units valued at $370,000. Date Detail DR($) CR($) 30th June, 201x Cash/bank $(600*500) 300,000 Loss expense 70,000 Sales 370,000 370,000 370,000 To record the impact a sale at $500 for each ISLEEP will have on the closing inventory. Question 6 The lease for the company car is an operating lease. This is because; the lease installments are not 90% of the market value of the car; Large Mart is paying $8,000 and the market value is $47,500. It is being leased for a short period of time (8) years. Question 7 Interest expense= 0.1* 47,500 = 4,750 Date Detail DR($) CR($) 1st July, 201x Company car 47,500 Interest expense 4,750 Lease liability 52,250 52,250 52,250 Recording the inception of the lease car Date Detail DR($) CR($) 30th June, 201x + 1 Annual lease Payments 8,000 Interest expense 4,750 Bank 12,750 12,750 12,750 To record lease payment and interest at the end of the first year Depreciation= (net cost- residual value- down payment) / number of monthly payments Net cost= market value of the car ($47,500) Residual value= $500 Number of monthly payments= 8*12 =96 Depreciation fee for July, 31st 201x= (47,500- 500- 5,000) /96 =$437.50 References Steve, M, C. How to Calculate a Lease Payment. Retrieved on May 9, 2013 from Operating Lease versus Operating Lease.Retrieved from Journalizing. Retrieved from Wood, F., Robinson, S. (2001).Frank Wood's Book-keeping and Accounts, 5th Ed. UK; Financial Times/ Prentice Hall. Wood, F., Sangster, A. (2011).Frank Wood's Business Accounting Volume 1 with MyAccountingLab access card. London: Softcover. Financial Computer Systems, Inc. (2013).Operating lease accounting example. Retrieved on 9th May, 2013 from Wood, F., Horner, D. (2010).Business Accounting Basics. UK; Paperback. Walther, M, L. (2012).Financial Accounting.USA; Amazon Company. Walther, L. (2011).Long term Liabilities. Retrieved from First In, First Out– FIFO. Retrieved on May 9, 2013 from Read More