Question
Question 3: Preparation of Financial Reports Jane Lent from Janes Design World has provided you with the final Trial Balance for the reporting period. Using
Question 3: Preparation of Financial Reports
Jane Lent from Janes Design World has provided you with the final Trial Balance for the reporting period. Using the information provided you are required to:
- Prepare a statement of comprehensive income for the year ended 30 June 2021.
- Prepare a statement of financial position as at 30 June 2021.
Before preparing the required financial reports, Jane has asked you to the check the Trial Balance as she is aware that there are some errors, and as a result she cant get the Trial Balance to balance!
When you have identified the errors, make a note of them in the space provided below, and make the alterations in the Trial Balance, so that it balances and can then be relied on to prepare the Financial Reports.
Errors identified
Error | Correction Required |
Jane Design World | ||
Trial Balance as at June 30, 2021. | ||
Debit | Credit | |
$ | $ | |
Accounts Receivable | 54,690 | |
Accounts Payable | 32,875 | |
Accrued Income | 3,450 | |
Accrued expenses | 5,450 | |
Accumulated Depreciation Motor Vehicles | 42,000 | |
Accumulated Depreciation Computer equipment | 12,900 | |
Allowances for Doubtful Debts | 2,125 | |
Advertising | 10,560 | |
Bank Fees and Charges | 780 | |
Bad Debts | 925 | |
Capital: Jane Lent | 285,700 | |
Cartage Inward | 15,400 | |
Cash at bank | 16,990 | |
Commission Income | 6,200 | |
Computer Equipment | 33,000 | |
Customs Duty | 9,600 | |
Delivery expenses | 112,500 | |
Depreciation Motor Vehicles | 21,000 | |
Depreciation Computer equipment | 6,525 | |
Discount Expense | 4,350 | |
Doubtful Debts | 2,125 | |
Drawings: Jane Lent | 13,800 | |
Goodwill | 20,000 | |
GST Collected | 6,980 | |
GST Paid | 3,250 | |
Insurance General | 4,950 | |
Interest on Loan | 6,850 | |
Insurance on stock | 5,400 | |
Land and buildings | 475,000 | |
Long Term Loan | 65,000 | |
Loss on Sale of Motor Vehicles | 5,800 | |
Motor Vehicles | 65,000 | |
Motor Vehicle Expenses | 11,350 | |
Mortgage on Land | 150,000 | |
Office Wages | 23,600 | |
Petty Cash | 500 | |
Prepaid Income | 8,750 | |
Prepaid Expenses | 6,500 | |
Profit on Sale of Non-Current Asset | 9,500 | |
Provision for Annual Leave | 12,000 | |
Provision for Long Service Leave | 38,000 | |
Purchases Returns and Allowances | 6,750 | |
Purchases | 275,640 | |
Rental Income | 9,750 | |
Rates expense | 1,395 | |
Sales Returns and Allowances | 6,850 | |
Sales | 696,700 | |
Stock (1/7/19) | 45,300 | |
Shares in HBP Pty Ltd | 80,000 | |
Wages salespersons | 47,600 | |
Total | $1,423,805.00 | $1,357,555.00 |
|
|
|
Balance Day Adjustment | ||
Stock on hand (30/6/2021) | $ 85,700.00 |
Question 4: Theory Questions:
a) provide an explanation of the principles of double entry bookkeeping. b) describe the purpose of Balance Day Adjustments. What is the importance of the Matching principle in relation to Balance Day Adjustments?
c) Which Accounting standard sets out the guidelines for the presentation of Financial Reports?
d) What is the objective of the Accounting Standard you listed in Q3, and how does it aim to achieve this?
e) What is the purpose of the General Ledger
f) List 2 (two) basic functions of an organisations accounting (information) system.
g) What accounting controls should be in place to assist to minimise and detect errors?
h) An accounting system must be designed to meet the needs of the users of the accounting information it provides. What 3 (three) factors will help to determine how the system should be designed?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started