Prepare "T" Accounts in ACCRUAL and CASH basis the Income statement, Statement of Retained Earnings and Balance Sheet, after reading the following information below. Then answer the Multiple Choice

Richard Brandt graduated from York University with his BAS although he spent more time in the gym than in the classrooms and libraries. His parents and grandparents were very proud and happy of this achievement. As a graduation gift, Richard's Grandparents gave him $20,000 to start his own business. So, on September 1, 2015, Richard started a small business called "Ricky Rock Wrestling for Fun". "Ricky Rock" offers a party package designed for active kids, teen and adults that want to learn and practice wrestling activities for fun by learning how to perform headlocks, leg scissors and other tricks. As a student, he learned and practiced Greco-Roman wrestling and built an impressive body. Now graduated from university he has decided to continue with his passion of wrestling but added a spin to make money. In one tournament in 2013 Richard meet Linda who was competing for a US university team and she mentioned that she was working on girls birthday parties focused on wrestling. In June 2015 Richard contacted Linda and told her about his idea and Linda shared with him all documentation she has prepared in these years including: brochure to be distributed to potential customers, personal cards, party themes, parties activities, schedules and agendas, etc. During August Richard has completed his business plan and was ready to launch 'Ricky Rock Wresting for Fun' in the GTA. The following is a list of transactions that occurred during the first month of operations: September 1st Opened a business bank account with the $20,000 received as a gift from the Grandparents $20,000. September 1st Signed 12 month commercial insurance contract for any liability that might emerge from the activity, $600 per month for 1 year. September 2nd Purchase in cash costumes of famous wrestlers to wear at parties. The costumes can last one full year $600. September 3rd Paid in cash the set up of the web site. It expects to last the whole life of this business $2,000. September 4th Collected the brochures and presentation cards to be used in promoting the business. One third is paid in cash while the rest will be paid on October 5th $450. September 5th First event organized and delivered. Birthday party for a 5 years old boy. Received the payment in cash $1,000. September 6th Second event organized and delivered as part of a series of activities organized by a charity to raise funds. One third is paid in cash while the rest will be paid by the Charity Organization on October 5th $3,000. September 8th Labour day, no events, no work so Richard goes to the gym and does a double routine (the rest of the days he just does a simple routine of 2.5 hours). September 12th Third event organized and delivered. Birthday party for a 7 years old boy. Parents promise to pay in a few days $1,000. September 15th Pays first 2 months of insurance $1,200. September 19th & 20th Fourth event organized and delivered. Provided one of the activities of a corporate team building extravaganza weekend. The contract signed says the payment will be effective in 30 days with a cheque $2,000. September 23rd Paid the gym membership for September, October, November and December $2,000. September 24th Telephone bill for $200 was received for the month of September, payment due October 5th $200. September 26th Fifth event organized and delivered. Birthday party for a 4 years old boy. Received payment in cash $1,000. September 26th One of the parents at the birthday party for a 4 years old boy hires him for his son's birthday party on October 10th. Received payment in cash $500. September 27th Sixth event organized and delivered. Birthday party for a 6 years old boy. Received payment in cash $1,000. September 29th Received the payment for the birthday party for the 7 years old boy of September 12th $1,000. September 30th Richard pays to his parents a rent for using the car for business purposes and to go and come back from the gym $200. September 30th Richard promised to pay on October 6th to his parents the extra charge that comes in the insurance premium of their cars for having him as an additional driver (male under 25) $800. Additional information: September 30th Inventory of brochures and cards showed that two thirds of them are still available (not used) $300. ACCRUAL accounting:

Revenues	Cash
Telephone Expense	Brochures
Car Rent Expenses	Accounts Receivables
Car Rent Insurance Expense	Prepaid Insurance
Costumes Expense	Prepaid Gym Membership
Brochures Expense	Costumes
Gym Membership Expense	Accumulated Depreciation Costumes
Insurance Expense	Web Site (intangible asset)
Advances From Customers	Accounts Payable
Owner's Equity	Costumes Depreciation Expense
	Telephone Payable

CASH accounting:

Revenue	Expense on Web site
Car rent expenses	Insurance Expense
Car Rent Insurance Expense	Gym Membership Expense
Costumes Expense	Brochures Expense
Telephone Expense	Cash
Owner's equity	Costumes Depreciation Expense
Advances From Customers	Accounts Payable

1) At the end of the accounting period (Sep 30th, T account after AJE), what is the total of Assets? Use accrual accounting.

Between $26,000 and $28,000

More than $28,000

Between $23,000 and $25,999

Between $20,000 and $22,999

Less than $20,000

2) At the end of the accounting period (Sep 30th, T account after AJE), what is the net balance of Costumes account? Use accrual accounting.

$550

None of the other alternatives are correct

$600

$300

$0

3) At the end of the accounting period (Sep 30th, T account after AJE), what is the balance of Revenues? Use cash accounting.

Between $9,000 and $10,000

less than $5,000

Between $5,000 and $5,999

more than $10,000

Between $6,000 and $8,999

4) At the end of the accounting period (Sep 30th, T account after AJE), what is the balance of Car Rent Insurance Expense? Use cash accounting.

$400

$200

$1,00

$0

$800

5) At the end of the accounting period (Sep 30th, T account after AJE), what is the total of Owner's Equity including the Net Income/Net Loss of the period? Use cash accounting.

More than $20,000

Between $15,000 and $20,000

Less than $5,000

Between $10,000 and $14,999

Between $5,000 and $9,999

6) At the end of the accounting period (Sep 30th, T account after AJE), what is the balance of Accounts Payable? Use cash accounting.

$450

$800

$500

$1,250

$0

7) At the end of the accounting period (Sep 30th, T account after AJE), what is the balance of Insurance Expense? Use cash accounting.

$0

$600

None of the other alternatives are correct

$1,200

$7,200

8) At the end of the accounting period (Sep 30th, T account after AJE), what is the balance of Costumes Expense Account? Use accrual accounting.

None of the other alternatives are correct

$550

$50

$600

$300

9) At the end of the accounting period (Sep 30th, T account after AJE), what is the balance of Accumulated Depreciation Costumes? Use accrual accounting.

$25

$50

None of the other alternatives are correct

$0

$100

10) At the end of the accounting period (Sep 30th, T account after AJE but before preparing the Income Statement), what is the balance of Owner's equity? Use accrual accounting.

$11,000

None of the other alternatives are correct

$20,000

$19,500

$0

11) At the end of the accounting period (Sep 30th, T account after AJE), what is the Net income/Net Loss? Use accrual accounting.

Between $5,000 and 6,499

Between $6,500 and 7,000

Between $3,700 and $4,999

less than $3,700

more than $7,000

12) At the end of the accounting period (Sep 30th, T account after AJE), what is the balance of Costumes account? Use cash accounting.

$0

$550

$300

$600

$50

13) At the end of the accounting period (Sep 30th, T account after AJE), what is the balance of Gym Membership Expense? Use accrual accounting.

$1,500

None of the other alternatives are correct

$500

$1,000

$2,000

14) At the end of the accounting period (Sep 30th, T account after AJE), what is the total of Current Assets? Use accrual accounting.

Between $22,600 and $25,750

More than $25,750

Between $20,000 and $22,599

Less than $19,000

Between $19,000 and $19,999

15) At the end of the accounting period (Sep 30th, T account after AJE), what is the total of Non Current Liabilities? Use cash accounting.

More than $10,000

Between $100 and $1,999

Between $6,000 and $10,000

Less than $100

Between $2,000 and $5,999

16) At the end of the accounting period (Sep 30th, T account after AJE), what is the balance of Prepaid Gym Membership? Use accrual accounting.

None of the other alternatives are correct

$2,000

$0

$500

$1,500

17) At the end of the accounting period (Sep 30th, T account after AJE), what is the balance of Telephone Expense? Use accrual accounting.

$0

$400

$200

None of the other alternatives are correct

$100

18) At the end of the accounting period (Sep 30th, T account after AJE), what is the balance of Brochures Expense? Use accrual accounting.

$450

$225

$150

$300

None of the other alternatives are correct

19) At the end of the accounting period (Sep 30th, T account after AJE), what is the balance of Gym Membership Expense? Use cash accounting.

$500

$2,000

$0

None of the other alternatives are correct

$1,500

20) At the end of the accounting period (Sep 30th, T account after AJE), what is the balance of Revenues? Use accrual accounting.

less than $5,000

more than $10,000

Between $8,000 and $8,999

Between $9,000 and $10,000

Between $5,000 and $7,999