Exercise 6 - Leppa Inc.
Prepare an adjusted trial balance for the Company as per 31. 12. 2013 according to the transactions in the quiz.
- 1.None posted payment of withheld income taxes to tax authorities of 22.500. Payment was made from the overdraft account before 31.12.2013.
- A.
The bank overdraft account (liability) is debited 22.500 while the payable corporation tax account (liability) is credited 22.500.
- B.
The bank overdraft account (liability) is credited 22.500 while the corporation tax account (profit/loss) is debited 22.500.
- C.
The bank overdraft account (liability) is credited 22.500 while the deferred taxes account (liability) is debited 22.500.
- D.
The bank overdraft account (liability) is credited 22.500 while the payable withheld income tax account (liability) is debited 22.500.
- E.
The bank overdraft account (liability) is credited 22.500 while the payable corporation tax account (liability) is debited 22.500.
- 2.None posted payment of withheld pension contributions to pension fund of 10.000. Payment was made from the overdraft account before 31.12.2013.
- A.
The bankoverdraft account (liability) is credited 10.000, while the payable withheld pension contribution account (liability) is debited 10.000.
- B.
The bankoverdraft account (liability) is credited 10.000, while the pension contribution account (profit/loss) is debited 10.000.
- C.
The bankoverdraft account (liability) is credited 10.000, while the other creditors account (liability) is debited 10.000.
- 3.None posted reversal of provision for bad debt of 12.000.
- A.
The provision for bad debt account (asset) is credited 12.000 while the bad debt account (profit/loss) is debited 12.000.
- B.
The provision for bad debt account (asset) is debited 12.000 while the trade debtors account (asset) is credited 12.000.
- C.
The provision for bad debt account (asset) is debited 12.000 while the bad debt account (profit/loss) is credited 12.000.
- D.
The provision for bad debt account (asset) is credited 12.000 while the trade debtors account (asset) is debited 12.000.
- 4.None posted cash purchase of coffee for employees of 2.000. The purchase was made before 31.12.2013.
- A.
The wages account (profit/loss) is credited 2.000 while the cash account (asset) is debited 2.000.
- B.
The other employee costs account (profit/loss) is debited 2.000 while the cash account (asset) is credited 2.000.
- C.
The miscellaneous expense account (profit/loss) is debited 2.000 while the cash account (asset) is credited 2.000.
- D.
The wages account (profit/loss) is debited 2.000 while the cash account (asset) is credited 2.000.
- 5.Posted accident insurance regarding 2014 of the amount of 19.000. The posting was made to the account “Other employee costs”.
- A.
The other employee costs account (profit/loss) is credited 19.000 while the trade debtors account (asset) is debited 19.000.
- B.
The other employee costs account (profit/loss) is credited 19.000 while the bank deposit account (asset) is debited 19.000.
- C.
The other employee costs account (profit/loss) is credited 19.000 while the prepayments account (asset) is debited 19.000.
- D.
The other employee costs account (profit/loss) is debited 19.000 while the prepayments account (asset) is credited 19.000.
- 6.None posted corporation tax of 40.000 (cost) and deferred tax of 10.000 (cost). Corporation tax is unpaid as per 31.12.2013.
- A.
The corporation tax account (profit/loss) is debited 50.000, the corporation tax payable account (liability) is credited 10.000 while the deferred taxes account (liability) is credited 40.000.
- B.
The corporation tax account (profit/loss) is credited 50.000, the corporation tax payable account (liability) is debited 40.000 while the deferred taxes account (liability) is debited 10.000.
- C.
The corporation tax account (profit/loss) is credited 50.000, the corporation tax payable account (liability) is debited 10.000 while the deferred taxes account (liability) is debited 40.000.
- D.
The corporation tax account (profit/loss) is debited 50.000, the corporation tax payable account (liability) is credited 40.000 while the deferred taxes account (liability) is credited 10.000.
- 7.Invoice for trade debtor (customer) of 61.000 posted twice by a mistake. The invoice has not been paid by the trade debtor (customer) as per 31.12.2013.
- A.
The bad debt account (profit/loss) is debited 61.000 while the trade debtors account (asset) is credited 61.000.
- B.
The bad debt account (profit/loss) is debited 61.000 while the provision for bad debt account (asset) is credited 61.000.
- C.
The sales account (profit/loss) is debited 61.000 while the trade debtors account (asset) is credited 61.000.
- 8.None posted wages regarding Q4 2013 specified below: Wages = 150.000 Withheld pension contribution = 23.000 Taxable income = 127.000 Withheld income tax = 70.000 Net wages = 57.000 Payment was made from the overdraft account in December 2013.
- A.
The wages account (profit/loss) is debited 150.000, the pension contribution account (profit/loss) is debited 23.000, the bank overdraft account (liability) is credited 57.000, the payable withheld income taxes account (liability) is credited 70.000 while the payable withheld pension contribution account is credited 23.000.
- B.
The wages account (profit/loss) is debited 127.000, the pension contribution account (profit/loss) is debited 23.000, the bank overdraft account (liability) is credited 57.000, the payable withheld income taxes account (liability) is credited 70.000 while the payable withheld pension contribution account is credited 23.000.
- C.
The wages account (profit/loss) is credited 127.000, the pension contribution account (profit/loss) is credited 23.000, the bank overdraft account (liability) is debited 57.000, the payable withheld income taxes account (liability) is debited 70.000 while the payable withheld pension contribution account is debited 23.000.
- D.
The wages account (profit/loss) is credited 150.000, the pension contribution account (profit/loss) is credited 23.000, the bank overdraft account (liability) is debited 57.000, the payable withheld income taxes account (liability) is debited 70.000 while the payable withheld pension contribution account is debited 23.000.
- 9.None posted cash sale to customer of 20.000 in December 2013.
- A.
The transaction should not be included in the books as per 31.12.2013.
- B.
The sales account (profit/loss) is credited 20.000 while the bank overdraft account (liability) is debited 20.000.
- C.
The sales account (profit/loss) is debited 20.000 while the cash account (asset) is credited 20.000.
- D.
The sales account (profit/loss) is credited 20.000 while the cash account (asset) is debited 20.000.
- 10.None posted inventory count and evaluation for 2013. The company uses FIFO (first in first out) in evaluating its inventory. At the beginning of the year the company had an inventory of 250 with the equivalent amount of 250.000 in value. During the year the company has purchased first 50 for an amount of 60.000 and then last 60 for an amount of 78.000. All purchases have been posted to the account Goods for resale together with the begin value of 250.000. The quantity sold was 270 leaving a quantity of 90 in inventory as per 31.12.2013. Asses the value of the inventory as per 31.12.2013 and post according to this.
- A.
The cost of goods sold account (profit/loss) is debited 274.000 while the goods for resale account (asset) is credited 274.000.
- B.
The cost of goods sold account (profit/loss) is debited 250.000 while the goods for resale account (asset) is credited 250.000.
- C.
The cost of goods sold account (profit/loss) is debited 388.000 while the goods for resale account (asset) is credited 388.000.
- D.
The cost of goods sold account (profit/loss) is debited 78.000 while the goods for resale account (asset) is credited 78.000.
- E.
The cost of goods sold account (profit/loss) is debited 114.000 while the goods for resale account (asset) is credited 114.000.
- 11.None posted depreciations:
- Building and land is depreciated over a period of 30 years. No scrap value is expected. Straight line depreciations are used.
- Plant and machinery is depreciated over a period of 10 years. The expected scrap value is 25.000. Straight line depreciations are used.
- The initial cost of the Building and land as well as plant and Machinery can be found in the balancesheet.
- A.
The depreciations on plant and machinery account (profit/loss) is debited 50.000, The depreciations on buildings account (profit/loss) is debited 41.000, the accumulated depreciations on building account (asset) is credited 41.000 while the accumulated depreciations on plant and machinery account (asset) is credited 50.000.
- B.
The depreciations on plant and machinery account (profit/loss) is debited 50.000, The depreciations on buildings account (profit/loss) is debited 123.000, the accumulated depreciations on building account (asset) is credited 123.000 while the accumulated depreciations on plant and machinery account (asset) is credited 50.000.
- C.
The depreciations on plant and machinery account (profit/loss) is debited 47.500, The depreciations on buildings account (profit/loss) is debited 41.000, the accumulated depreciations on building account (asset) is credited 41.000 while the accumulated depreciations on plant and machinery account (asset) is credited 47.500.
- 12.None posted and unpaid audit fee for the fiscal year 2013 for the amount of 26.000.
- A.
The trade creditors account (liability) is credited 26.000 while the audit fee account (profit/loss) is debited 26.000.
- B.
The other creditors account (liability) is credited 26.000 while the audit fee account (profit/loss) is debited 26.000.
- C.
The bank overdraft account (liability) is credited 26.000 while the audit fee account (profit/loss) is debited 26.000.
- 13.None posted payment of loan of 80.000 including 20.000 in interests. The remaining amount of 60.000 is repayment of loan principal. The payment was made from the overdraft account.
- A.
The bank overdraft account (liability) is credited 80.000, the interest expenses account (profit/loss) is debited 80.000.
- B.
The bank overdraft account (liability) is credited 80.000 while the longterm loan liabilities account (liability) is debited 80.000.
- C.
The bank overdraft account (liability) is credited 80.000, the interest expenses account (profit/loss) is debited 20.000 while the longterm loan liabilities account (liability) is debited 60.000.
- D.
The bank overdraft account (liability) is debited 80.000, the interest expenses account (profit/loss) is credited 80.000.
- E.
The bank overdraft account (liability) is debited 80.000, the interest expenses account (profit/loss) is credited 20.000 while the longterm loan liabilities account (liability) is credited 60.000.
- 14.None posted settlement of the input and output VAT account to the VAT payable account.
- A.
The input VAT account (liability) is credited 34.000, the output VAT account (liability) is debited 76.000 while the VAT payable account (liability) is credited 42.000.
- B.
The input VAT account (liability) is debited 34.000, the output VAT account (liability) is credited 76.000 while the VAT payable account (liability) is debited 42.000.
- 15.None posted and unpaid declared dividend to shareholders for the fiscal year 2013 of 50.000.
- A.
The dividend for the year account (liability) is debited 50.000 while the retained earnings account (liability) is credited 50.000.
- B.
The dividend for the year account (liability) is debited 50.000 while the bank overdraft account (liability) is credited 50.000.
- C.
The dividend for the year account (liability) is credited 50.000 while the retained earnings account (liability) is debited 50.000.
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