Question 3

Recording business transactions (15 Marks)

Question 3 is a continuation of Question 2 (reproduced below) Danny Wolf recently opened her own financial service office, which she operates as a sole proprietorship. The name of the new entity is Wolverine. Danny experienced the following events during the organising phase of the new business and its first month of operation, April 2023. Some of the events were personal.

others were business transaction

. April 1 Received $100,000 capital contribution from the owner Danny. Borrowed $30,000 cash from the bank for 12 month-loan, 2% interest rate per year, payable at end of each month.

4 Paid $3,600 cash for a six-month insurance policy. The policy begins 1 April.

8 Paid electricity and gas expense of $800.

15 Purchased a printer for $30,000 ($15,000 on account, and the remainder $15,000 on cash).

18 Performed service for client on account, $4,000.

20 Paid $15,000 for the printer purchased on 15 April.

22 Collected $4,000 in advance for services to be performed later.

25 Performed service for client on credit $4,000.

26 Danny withdrew $1000 cash from the business for personal expenditure.

27 Purchased office supplies for $1000 on account.

28 Paid $2,000 employee salaries.

30 Paid interest expense for the bank loan for April.

Required 1 Use Excel to record each transaction in the journal using the following chart of accounts and post the transactions into the T-accounts. Narrations arent required. (12 Marks) Cash, DannyDrawings, Accounts receivable, Equipment, Office supplies, Service revenue, Prepaid insurance, Salaries expense, Insurance expense, Accounts payable, Interest expense, Interest payable, Loan payable, Unearned revenue, Supplies expense, Wolverine - Capital, Electricity and gas expense

3.2 Use Excel to prepare an unadjusted trial balance as at 30 April 2022. (3 Marks)

Question 4

The adjusting process (15 Marks)

Question 4 is a continuation of Question 3

Required 4.1 Use Excel to prepare an adjusted trial balance, including the adding two columns for the following adjustment data. (12 Marks)

adjustment data:

a. Accrued salaries expense, $2 000

. b. Depreciation expense $200 was recorded on the printer.

c. Prepaid insurance for April has expired.

d. Office supplies on hand, $200.

e. Unearned revenue earned during the month, $400.

f. Accrued service revenue, $1300.

4.2 Discuss why accrual-based accounting is more accurately reflect the financial performance of a business than cash-based accounting. (3 Marks)

Question 5

Completing the accounting cycle (20 Marks)

Question 5 is a continuation of Question

Required

5.1Use Excel to prepare SGs income statement for the month ended 30 April 2022. (8 Marks)

5.2 Use Excel to prepare SGs changes in equity statement for the month ended 30 April 2022. (4 Marks)

5 .3 Use Excel to prepare SGs Statement of Financial Position (i.e., balance sheet) for the month ended 30 April 2022. (8 Marks)