Reference no: EM133099796
Question 1 - Sarah has the following items disclosed on its balance sheet. The only item missing is the owners' equity:
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Bank overdraft
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$15,000
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Accounts Receivable
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$25,000
|
|
Cash
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$40,000
|
Loan Payable
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$150,000
|
|
Office supplies
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$25,000
|
Inventory
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$3,500
|
|
Office building
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$90,000
|
Motor vehicles
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$30,000
|
|
Inventory
|
$3,500
|
Plant and equipment
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$80,000
|
What is the amount for the firm's current assets?
Question 2- Which of the following best represents examples of liquid assets?
a. Cash and bank overdraft.
b. Cash and office equipment.
c. Cash and inventory.
d. Cash and dividend.
e. Cash and account payable.
Question 3 - During the first month of operations, Swann Financial Services provided services and billed customers in the amount of $8,800 on the 2nd of the month and $2,000 on the middle of the month. By the end of the first month, $2,500 had been collected and it was expected that the remaining would be collected during the following month. How much revenue should be recorded at income statement for the first month? Be mindful that Swann Financial Services used the accrual accounting method.
Question 4 - Which of the following can Tom not recognise as an expense assuming all relate to his business?
a. Payment of interest on a loan of $100.
b. Use of water for which Tom will be invoiced in two months.
c. Payment of $100 for the staff Christmas lunch.
d. A suspicion that John will not return the $26 that he borrowed from Tom.
e. Payment of electricity for the month of $50.
Question 5 - What profit earned by a business owner who documented the following transactions for the year ending 30th June.
1. Sold $5,000 of merchandise that had cost the company $3,500.
2. Spent $250 for mortgage insurance of the office.
3. Paid $200 cash for rent for the months of May and June.
4. The owner withdraw $100 of cash for personal use during May.
5. Billed the customer $2,000 for financial advice service.
Question 6 - The personal training business owned by Harold Kumar made the following cash and non-cash transactions during the month ended 30 June 2021 (Ignore GST).
1. purchased equipment 5-year loan, $13,200
2. sale of motor vehicle, $10,000
3. cash received for services, $26,400
4. paid wages (cash), $5,280
5. paid rent (cash), $8,000
6. cash received for product sales, $39,600
7. charged depreciation, $400
8. borrow $23,000 from bank of Melbourne
9. withdraw $5,000 for personal use
Prepare a fully classified Statement of Cash Flows for the month ended 30 June 2021.