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I need this done in 30 mins, unfortunately thats how much time I have left before the deadline Section B Question 1: List three different
I need this done in 30 mins, unfortunately thats how much time I have left before the deadline
Section B Question 1: List three different users of accounting information. Identify one type of decision that each user would make based on accounting information communicated by the accountant. (6 marks) Question 2: The director of Clipper Itd has asked you to classify if the following transactions are 'capital or 'revenue' expenditures: (9 marks) a) A car that was purchased for the business b) Purchasing a pencil for the office c) Re-painting the car (in part a) to make it match the business colours. d) Car fees: 1 Paying the lawyer fees that assisted with the purchase of the car 2 Paying a mechanic for the job in part e) Purchasing inventory for resale f) Carriage in for the inventory that was purchased 8) Painting a new office h) Repairing new computer monitors, that were purchased broken, for money saving purposes Question 3 : The following trial balance has been extracted from the balances relating to the accounting books of Bloom, a small shop, at the end of their accounting year on the 304 April 2020. (40 marks) Bloom's Trial balance for the year ending 30th April 2020 250,030 164,472 504 E 67,000 54,000 1.233 2,000 6,543 700 67,000 500 80,000 12,000 20,000 142,732 24,000 Capital and drawings Sales and purchases Return inwards and outwards Carriage inwards Carriage outwards Commission allowed and received Salaries health insurance Machinery at cost Machinery-accumulated depreciation at 1* May 2019 Fixtures and fittings at cost Fixtures and fittings-accumulated depreciation at 1* May 2019 Rent paid and received Delivery costs Electricity Insurance Inventory as at 1" May 2019 Legal fees Telephone Accounts receivable and payable Provision for doubtfuldebts at 1" May 2019 Cash Bank account Bank Loan Total 4,322 5,020 4,220 1.203 670 12,300 5.400 4,300 65,232 50,422 4,003 30,000 20,000 40,300 570,053 570,053 Notes: 1 The owner has provided the company with 5000 cash. 2 The health insurance was owner's private insurance. 3 The machinery is to be depreciated over 7 years, using the straight-line method, it's expected to be sold for 10,000 at the end of its life. 4 Bad debts at a value of 4500 were realised but not accounted for 5 Due to the recent economic event it was concluded that the doubtful debts provision has to be changed to 20% 6 2000 of the legal fees relate to the next period's expenditure 7 An invoice at a value of 1000, for the current period's electricity, was received but will be paid for next period 8 Fixtures and fittings are to be depreciated at 8% per annum using the reducing balance method. 9 The inventory at the end of the year 30th April 2020 was valued at 3400 Required: You are required to produce, both, the income statement and the statement of financial position for Bloom for the year ending 30th April 2020 Step by Step Solution
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