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Martina Pavlova is a retailer who had not kept a full set of books. The following is a summary of her bank statement for the

Martina Pavlova is a retailer who had not kept a full set of books. The following is a summary of her bank statement for the year ended June 30, 2012.

Bank Statement Summary

Debit

$

Credit

$

Balance Brought forward July 1, 2011

6.820

Payments to creditors

+16,800

Overdraft interest

2,510

Credit card (net)

122,010

Drawings

Rent

Rental income

Cash sales

Insurance

10,000

195,000

2,000

1,465,190

55,000

Debtors

Salaries

Cash purchases

Electricity

Water

Telephone

329,860

350,000

540,100

48,136

7,625

8,250

Employers' statutory contributions

Office supplies

Loan interest

24,000

31,680

4,000

Loan principal

Additional capital

Balance carried forward June 30, 2012

20,000

50,000

249,139

1,969,060

1,969,060

a. The amount of cash received from cash sales were al! paid into the bank with the

exception of:

$8,000 paid for personal expenses

$10,000 paid for legal fees

b. Martina Pavlova keeps a cash float of $2,000 at her retail store.

c. The loan interest was paid to her sister Mariasela. Mariasela lent Martina $100,000

on July 1 2010 at a rate of interest of 10% per annum. The interest is being calculated on a reducing balance basis. Theinterest is to be paid half-yearly on December 31 and June 30. No interest was outstanding on July 1, 2011. The principal is being paid equally over a five year period on January 1. Each year. The first principal payment was made on January 1, 2011 and the second principal payment on January 1, 2012.

d. Martina Pavlova also accepts credit card payments from customers for the sale of

goods. Credit card companies charge a commission of 2% and remit the net amount to Martina Pavlova.

5

e. Discounts received from trade creditors amounted to $4,600 and those allowed to

debtors were $8.750.

a. Martina Pavlova grants a credit period of 15 days to trade debtors. The closing debtors balance includes a debt of $2,000 from Monica James who migrated to Australia. The debt is now outstanding for 1 year and 4 months. Another debtor Victoria Cassells is experiencing temporary financial difficulties and is unable to pay her debt of $500. The debt is 150 days overdue.

b. Martina Pavlova lease stipulates a rental payment of $15,000 per month. No

rental payment was outstanding or prepaid at the beginning of the financial year on July 1, 2011. Martina Pavlova sublets the premises to her cousin Antigua Freemantle on May 1, 2012 for a monthly rental of $2,000.

c. Furniture costing $10,000 was sold on June 30 2012 to Belinda Brown for

$8,000. The accumulated depreciation on the furniture disposed of was $3,000. No furniture was acquired during the financial year ended June 30, 2012. Depreciation is being provided on the straight line basis at a rate of 10% per

annum on cost.

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