Exercise 8 - Much & Home Inc.

8 Questions | Total Attempts: 83

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Exercise 8 - Much & Home Inc.

Prepare an adjusted trial balance for the Company as per 31. 12. 2013 according to the transactions in the quiz.


Questions and Answers
  • 1. 
    The equipment account with a balance of 600.000 is specified below: Begin balance 01.01.2013 0 Depreciation period Expected scrap value Purchase time Additions in 2013:         Computer mainframe 400.000 10 years 10.000 Begin 2013 Printer 50.000 5 years 0 Medio 2013 Computer terminals 150.000 4 years 25.000 End 2013 End balance 31.12.2013 600.000       Calculate and post the depreciations on equipment for 2013. Straight line depreciations are used.
    • A. 

      The accumulated depreciations on equipment account (asset) is credited 39.000 while the depreciations on equipment (profit/loss) is debited 39.000.

    • B. 

      The accumulated depreciations on equipment account (asset) is credited 5.000 while the depreciations on equipment (profit/loss) is debited 5.000.

    • C. 

      The accumulated depreciations on equipment account (asset) is credited 10.000 while the depreciations on equipment (profit/loss) is debited 10.000.

    • D. 

      The accumulated depreciations on equipment account (asset) is credited 31.250 while the depreciations on equipment (profit/loss) is debited 31.250.

  • 2. 
    The trade debtors account with a balance of 850.000 shows the following age distribution as per 31.12.2013 including write off percentages: Due Not due 1-30 days due 31-60 days due Over 60 days due Amount 500.000 200.000 100.000 50.000 Write off % 0% 10% 50% 90% Calculate and post the provision for bad debt as per 31.12.2013 using the write off percentages provided above.
    • A. 

      The provision for bad debt account (asset) is credited 850.000 while the bad debt account (profit(loss) is debited 850.000

    • B. 

      The trade debtors account (asset) is credited 115.000 while the bad debt account (profit(loss) is debited 115.000

    • C. 

      The trade debtors account (asset) is credited 850.000 while the bad debt account (profit(loss) is debited 850.000

    • D. 

      The provision for bad debt account (asset) is credited 115.000 while the bad debt account (profit(loss) is debited 115.000

  • 3. 
    The inventory account with a balance of 189.200 is specified below: Date Text Amount 01.01.2013 Balance from 31.12.2012 – 10 pcs 10.500 28.02.2013 Purchase of 120 pcs 120.000 20.08.2013 Purchase of 17 pcs 22.950 25.10.2013 Purchase of 10 pcs 12.000 01.12.2013 Purchase of 25 pcs 23.750 31.12.2013 Balance 189.200 The inventory account only represents one product. As per 31.12.2013 the inventory was counted at 42 pcs. The company uses Fifo for assessment of its inventory. Asses the inventory as per 31.12.2013 and post cost of goods sold for 2013 in the trail balance.
    • A. 

      The cost of goods sold account (profit/loss) is debited 144.000 while the goods for resale account (asset) is credited 144.000

    • B. 

      The cost of goods sold account (profit/loss) is debited 189.200 while the goods for resale account (asset) is credited 189.200

    • C. 

      The cost of goods sold account (profit/loss) is debited 45.200 while the goods for resale account (asset) is credited 45.200

  • 4. 
    Statement of account from Bank Inc. (the company’s overdraft account) as per 31.12.2013 showing a balance of -402.150 is specified below: Date Text Amount Balance   Transferred from previous statement of account . . . . . . .   -308.000 12.12.2013 Purchase of office supplies -500 -308.500 15.12.2013 Rent of premises for Q1 2014 -45.000 -353.500 31.12.2013 Payment of loan according to amortization schedule *) -50.000 -403.500 31.12.2013 Interest income for Q4 2013 1.350 -402.150 31.12.2013 Balance as per 31.12.2013   -402.150   Reconcile the statement of account from Bank Inc. to the trail balance and post any none posted amounts in the trail balance. *) amortization schedule on loan: Due date Payment Amortization Interest End balance 31.12.2012 50.000 12.500 37.500 500.000 31.12.2013 50.000 17.500 32.500 482.500 31.12.2014 50.000 22.500 27.500 460.000 31.12.2015 50.000 27.500 22.500 432.500  
    • A. 

      The office supplies account (profit/loss) is debited 500 while the bank overdraft (liability) account is credited 500

    • B. 

      The premises expense account (profit/loss) is debited 45.000 while the bank overdraft (liability) account is credited 45.000

    • C. 

      The prepayments account (asset) is debited 45.000 while the bank overdraft (liability) account is credited 45.000

    • D. 

      The interest expenses account (profit/loss) is debited 50.000 while the bank overdraft account (liability) is credited 50.000

    • E. 

      The interest expenses account (profit/loss) is debited 37.500, the longterm liabilities account (liability) is debited 12.500 while the bank overdraft account (liability) is credited 50.000

    • F. 

      The interest expenses account (profit/loss) is debited 32.500, the longterm liabilities account (liability) is debited 17.500 while the bank overdraft account (liability) is credited 50.000

    • G. 

      None of the transactions should be posted in the financial statement as per 31.12.2013

    • H. 

      The interest revenue (profit/loss) is credited 1.350 while the bank overdraft account (liability) is debited 1.350

    • I. 

      The interest revenue (profit/loss) is debited 1.350 while the bank overdraft account (liability) is credited 1.350

  • 5. 
    None posted and unpaid audit fee for the fiscal year 2013 for the amount of 30.000.
    • A. 

      The audit fee account (profit/loss) is debited 30.000 while the other creditors account (liability) is credited 30.000

    • B. 

      The audit fee account (profit/loss) is debited 30.000 while the bank overdraft account (liability) is credited 30.000

    • C. 

      The audit fee account (profit/loss) is credited 30.000 while the other creditors account (liability) is debited 30.000

    • D. 

      The audit fee account (profit/loss) is credited 30.000 while the bank overdraft account (liability) is debited 30.000

  • 6. 
    None posted corporation tax of 55.000 (cost) and deferred tax of 12.000 (cost). Corporation tax is unpaid as per 31.12.2013.
    • A. 

      The corporation tax account (profit/loss) is debited 67.000, the corporation tax payable account (liability) is credited 55.000 while the derferred taxes account (liability) is credited 12.000

    • B. 

      The corporation tax account (profit/loss) is debited 67.000 while the other creditors account (liability) is credited 67.000

    • C. 

      The corporation tax account (profit/loss) is credited 67.000 while the other creditors account (liability) is debited 67.000

    • D. 

      The corporation tax account (profit/loss) is credited 67.000, the corporation tax payable account (liability) is debited 55.000 while the derferred taxes account (liability) is debited 12.000

    • E. 

      The corporation tax account (profit/loss) is debited 67.000, the bank overdraft account (liability) is credited 55.000 while the derferred taxes account (liability) is credited 12.000

    • F. 

      The corporation tax account (profit/loss) is debited 67.000 while the bank overdraft account (liability) is credited 67.000

  • 7. 
    None posted settlement of the input and output VAT account to the VAT payable account.
    • A. 

      The input VAT account (liability) is credited 10.000, the output VAT account (liability) is debited 17.500 while the VAT payable account (liability) is credited 7.500

    • B. 

      The input VAT account (liability) is credited 10.000, the output VAT account (liability) is debited 17.500 while the bank overdraft account (liability) is credited 7.500

    • C. 

      The input VAT account (liability) is debited 10.000, the output VAT account (liability) is credited 17.500 while the VAT payable account (liability) is debited 7.500

    • D. 

      The input VAT account (liability) is debited 10.000, the output VAT account (liability) is credited 17.500 while the bank overdraft account (liability) is debited 7.500

    • E. 

      The input VAT account (liability) is credited 10.000, the output VAT account (liability) is debited 17.500 while the other creditors account (liability) is credited 7.500

  • 8. 
    None posted and unpaid declared dividend to shareholders for the fiscal year 2013 of 15% of the share capital.
    • A. 

      The dividend for the year account (liability) is credited 39.000 while the retained earnings account (liability) is debited 39.000

    • B. 

      The other creditors account (liability) is credited 39.000 while the retained earnings account (liability) is debited 39.000

    • C. 

      The interest expenses account (profit/loss) is credited 39.000 while the retained earnings account (liability) is debited 39.000

    • D. 

      The interest expenses account (profit/loss) is debited 39.000 while the bank overdraft account (liability) is debited 39.000

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