Kate is the owner of Nails and Beauty. She has difficulty doing accounting for her business and needs your help.

Required: Answer the following questions and specify which accounting assumption(s) is(are) relevant to your answer. Type your answers in the answer space provided below (note these questions have been reproduced in the answer space for you):

1. Kate borrowed $10,000 from the bank. She used $6,000 to pay the rent of her store and the rest to pay for a holiday trip. How much should she record as a loan on the balance sheet of the business? (2 marks)

Amount to be recorded as a business loan	Accounting Assumption(s)

2. Kate sold a $500 gift card to her customer on 29 June 2019. The customer used the gift card on 3 July 2019. In which financial year (2018-19 or 2019-20) should Kate recognise the service revenue? (2 marks)

The financial year to recognise revenue (2018-19 or 2019-20)	Accounting Assumption(s)

3. Kate ordered supplies from George and the delivery arrives today in her shop. Kate gets a credit term of 1 month from George and has not made the payment yet. Should Kate record the supplies? (2 marks)

Should Kate record the supplies? (Y/N)	Accounting Assumption(s)

4. There is a message chair in Kates shop. Kate paid $4,500 for the chair and the accumulated depreciation is now $1,500. The liquidation value of the chair is $2,000. Which amount should be recorded as the net book value of the message chair on the balance sheet? (2 marks)

The net book value of the message chair on the balance sheet	Accounting Assumption(s)