Account Name 2020 Adjustments Required for Month End 2020 Credit Credit Credit Ref 36,800 1,4,5,7, Debit 18,200 6,630 5,240 750 Debit Ref 29,000 10,12 3,000 11 800 2 9 4.840 150 Debit 10,400 9,630 1,200 600 800 40,000 3 5 800 40.000 14 600 16 600 5,000 5,000 1,000 1,150 8,000 16,000 16,000 4,000 17 17 4,000 150 13 8,000 17 250 18 30,000 14 855 | 2,6 400 1 100 15 6,400 6,400 7 250 30,000 855 400 100 Cash Accounts receivable Supplies Prepaid insurance Prepaid rent Vehicle Accumulated depreciation - vehicle Furniture Accumulated depreciationfurniture Equipment Accumulated depreciation-equipment Notes Payable Accounts Payable Salaries Payable Interest Payable Income Tax Payable Unearned Service Revenue Capital Shares Retained Earnings Service Revenue Gain In Disposal Depreciation Expense Interest Expense Income Tax Expense Insurance Expense Salaries Expense Rent Expense Telephone Expense Supplies Expense Totals 7,500 12 1,900 20,000 10,520 9,400 20,000 10.520 24,500 2,000 24,500 | 10,11 2,000 17 1,000 13,16,18 100 15 1.000 100 3 1 150 9,000 1,000 55 4,840 116,145 4 6 9 150 9,000 1,000 55 4,840 99,775 43.820 43.820 116.145 99,775 PART B: Entry # 1 Dr Cr 4,000 General Journal Account Description Salaries Expense Salaries Payable Cash (Salaries Payable = 1000/5*2) 400 3,600 2 Supplies 800 Accounts Payable 800 3 150 Insurance Expense Prepaid Insurance (1800/12) 150 4 Rent Expense Cash 1,000 1,000 5 800 Prepaid Rent Cash 800 6 55 Telephone Expense Accounts Payable (50+0.05*100) 55 7 Accounts Payable Cash 6,400 6,400 8 Salaries Expense Cash 5,000 5,000 9 4,840 Supplies Expense Supplies 4,840 10 Cash 21,500 Service Revenue 21,500 11 3,000 30*100 still left to pay Accounts Receivable Service Revenue 3,000 12 Cash 7,500 50 people at 150 each Unearned Service Revenue 7,500 13 150 Depreciation Expense Accumulated Depreciation - Furniture (5000-500)*(40%/12) furniture cost accumulated deprec. 150 5000 1000 14 Vehicle 40,000 Cost * Rate = 1000 5000* rate = 1000 Rate = 1000/5000 = 20% *2 = 40% Cash Notes Payable (35000+5000) 10,000 30,000 15 100 Interest Expense Interest Payable (30000*4%/12) 1 year 4% note 12 months 100 16 600 Depreciation Expense Accumulated Depreciation - Vehicle (40000-5000/175000*3000 600 vehicle cost residual value life in km used km 40000 5000 175000 3000 17 16,000 4,000 Equipment (Cost of New) Accumulated Depreciation - Equipment (Cost of Old) Gain on Disposal Equipment (Cost of Old) Cash 2,000 8,000 10,000 trade in for 6000 minue remaining value of old equipment 4000 2000 18 250 Depreciation Expense Accumulated Depreciation - Equipment (16000-1000)*1/5/12) 250 cost resid. Vali 16000 1000 5 12 life in yea months Inocme Statement Particlars Amount Amount Revenues Service Revenue Gain in disposal $ 24,500 $ 2,000 Total Revenue $ 26,500 $ 1,000 $ 100 Expenses DeP. EXP. Interest Expense Income tax expense Insurance expense Salaries expense rent expense Telephone expence Supplies expence $ 150 $ 9,000 $ 1,000 $ 55 $ 4,840 Total Expence $ 16,145 $ Net income 10,355 Reatained Earning Statement Particulars Amount Amount Open Balance $ 10,520 Add: Net Income $ 10,355 Subtotal $ 20,875 Less: Dividend $ Closing Ba. Of Retained Earning Statement $ HA 20,875 Balance Sheet For the end of July 31, 2020 Current Assets Amount Amount Cash 10,400 Account Receivable 9630 Supplies 1200 Prepaid Inurance 600 Prepaid rent 800 22,630 Total Current Assets Fixed Assets Vehicle Less:Acum Dep. Equipment Less:Acum Dep. Furniture Accumlated Dep. Total Assets 40,000 (600)| 16,000 (250) 5,000 (1,150) 59,000 81,630 Liablities Amount Amount Current Liablities PART E: THEORY List 3 different types of users of the financial statements of The London Tour Company (present and potential). Explain briefly what type of information they are looking for. Users: Type of Information: GRADE: 16 Calculate the current ratio, as well as 2 other ratios you believe the bank will look at to assess the company's health. Explain briefly why you selected these ratios and how they apply to the bank's needs. What do these ratios show? Do you believe they will be same if calculated on financial statements for an entire year? Current ratio Ratio #2 Ratio #3 GR Answer: What can you recommend to Andrew to improve the current ratio? Be specific in assessing the impact of your recommendation on the current ratio