Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Masha and the Bear Inc. had several expenses during 2018. Some of them were the below: Expense Account US$ Electricity 6,500 Water 1,700 Salaries

 

Masha and the Bear Inc. had several expenses during 2018. Some of them were the below: Expense Account US$ Electricity 6,500 Water 1,700 Salaries 180,000 It is now 15 February, and the accountant has to make some final entries before the financial records of 2018 are closed. She noted the below: 1. The audit of 2018 will start in the beginning of March. For the past two years the audit fee has been the same and it is expected to be the same for 2018 also. This has amounted to $5,000. 2. Electricity paid in 2018 did not include December 2018 (it was paid in January 2019) and the portion for this month was $500. 3. The water expense paid in January 2019 included also December 2018 which amounted to $300. 4. During the Christmas holidays, an employee requested an advance against his salary, i.e. to receive half of January 2019 salary in December. This amount was $1,500. Required: a. Explain what are accruals and give an example. (5 marks) b. Explain what are prepayments and give an example. (5 marks) c. Prepare the below accounts (taking also into account the notes) for 2018 indicating the amounts that should be reported in the Profit and Loss account, and Balance Sheet Account at the end of the year. You are required to present also extracts of the Profit and Loss account, and Balance Sheet Account for 2018. I Electricity I Water I Salaries I Audit Fees (15 marks)

Step by Step Solution

3.40 Rating (159 Votes )

There are 3 Steps involved in it

Step: 1

a b c Made offer wt off date then which Expenses occuged but payment thee exfenses hes to b ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamental financial accounting concepts

Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward

8th edition

978-007802536, 9780077648831, 0078025362, 77648838, 978-0078025365

More Books

Students also viewed these General Management questions

Question

The symbol Answered: 1 week ago

Answered: 1 week ago

Question

Why do bars offer free peanuts?

Answered: 1 week ago