Reference no: EM131043556
Question 1
Hana Kim owns True & Reliable, which provides employment placement services. The unadjusted trial balance on 30 June 2016 below was prepared by her accountant. (Ignore GST)
The following additional information is available at 30 June:
1. Unused supplies on hand on 30 June totalled $180.
2. The Unearned Fees account includes $825 received for fees earned during June.
3. Estimated depreciation on the office equipment is $3500.
4. Advertising costing $1350 was consumed during the year.
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True & Reliable
Unadjusted Trial Balance
as at 30 June 2016
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Account
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Debit
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Credit
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Cash at bank
Accounts receivable
GST receivable
Prepaid advertising
Office supplies
Office equipment
Accumulated depreciation - office equipment
Accounts payable
Unearned fees
GST payable
H Kim, Capital
H Kim, Drawings
Placement fees revenue
Rent expense
Salaries expense
Telephone expense
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$ 4 560
14 230
1470
2 120
750
18 620
16 000
12 240
62 500
2120
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$ 2280
11670
2580
3220
14 240
100 620
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$134 610
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$134 610
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Required
A. Prepare a 10-column worksheet for the year ended 30 June 2016.
B. Provide journals of the adjusting entries.
C. Prepare an income statement for the year ended 30 June 2016.
D. Prepare a statement of changes in equity for the year ended 30 June 2016.
E. Prepare a balance sheet as at 30 June 2016 in vertical format.
Question 2
You are the Chief Financial Officer for the Dragon-Rabbits Football Club. Your club won the Premier League for the 3 years running and have a very strong supporter base. The owner of the club, Mr Russell Mind, would like to regard the players as an asset of the business to be recognised on the balance sheet.
Required:
Advise Mr Mind, in a brief memo (NOT MORE than 500 words in Times New Roman; 12 size font), if the players can be regarded as an asset of the business to be recognised on the balance sheet.
Hint: refer to the Conceptual Framework in your answer. You may also like to structure your memo using the following headings:
- Asset definition and recognition criteria
- Future economic benefits
- Control
- Past events
- Probable occurrence
- Reliable measurement
Please work through the whole definition and recognition criteria. Please provide a word count in your answer.
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