Exercise 3 - Green & Blue Inc.
Prepare an adjusted trial balance for the Company as per 31. 12. 2013 according to the transactions in the quiz.
- 1.None posted VAT payment for Q3 according to the balance of the account “VAT payable”. The payment was made from the bank overdraft before 31.12.2013.
- A.
The VAT payable account (liability) is debited 33.000
- B.
The bankoverdraft account (liability) is credited 33.000
- C.
The VAT payable account (liability) is credited 33.000
- D.
The bankoverdraft account (liability) is debited 33.000
- 2.None posted and unpaid audit fee for 2013 of 25.000.
- A.
The audit fee account (profit/loss) is debited 25.000
- B.
The audit fee account (profit/loss) is credited 25.000
- C.
The other creditors account (liability) is credited 25.000
- D.
The trade creditors account (liability) is credited 25.000
- E.
The trade creditors account (liability) is debited 25.000
- F.
The transaction should no be included in the books for the fiscal year 2013
- 3.None posted purchase of new company car of 300.000 and none posted depreciations regarding this purchase. The expected scrap value is 60.000 while the depreciation period is 8 years. The purchase and delivery of the car was made 30.06.2013. The car was paid by transfer from the bank overdraft account. Straight line depreciations are used.
- A.
The bank overdraft account (liability) is credited 300.000
- B.
The bank overdraft account (liability) is debited 300.000
- C.
The car account (asset) is credited 300.000
- D.
The car account (asset) is debited 300.000
- E.
The accumulated depreciation on car account (asset) is credited 37.500 while the depreciation on car account (profit/loss) is debited 37.500
- F.
The accumulated depreciation on car account (asset) is credited 15.000 while the depreciation on car account (profit/loss) is debited 15.000
- G.
The accumulated depreciation on car account (asset) is credited 30.000 while the depreciation on car account (profit/loss) is debited 30.000
- 4.None posted sale of the building and land and none posted depreciations. The sale was made as per 31.12.2013 at a sum of 1.000.000. The sales amount is in escrow as per 31.12.2013 in the bank deposit account until February 2014. Depreciation on building and land is 35.000 for 2013.
- A.
The bank deposit account (asset) is debited 1.000.000 while the gain/loss on fixed asset account (profit/loss) is credited 1.000.000.
- B.
The transaction should not be included in the books for the fiscal year 2013
- C.
The bank deposit account (asset) is credited 1.000.000 while the gain/loss on fixed asset account (profit/loss) is debited 1.000.000.
- D.
The accumulated depreciations on building account (asset) is credited 35.000 while the depreciations on buildings account (profit/loss) is debited 35.000
- E.
The land and building account (asset) is credited 800.000 while gain/loss on fixed asset account (profit/loss) is debited 800.000
- F.
The accumulated depreciations on building account (asset) is debited 20.000 while gain/loss on fixed asset account (profit/loss) is credited 20.000
- G.
The accumulated depreciations on building account (asset) is debited 55.000 while gain/loss on fixed asset account (profit/loss) is credited 55.000
- H.
The land and building account (asset) is debited 800.000 while gain/loss on fixed asset account (profit/loss) is credited 800.000
- 5.None posted disposal and depreciations on plant and machinery. Plant and machinery burned during a fire in the building as per 30.06.2013. The depreciation for the first 6 months of 2013 is 14.000. No insurance cover can be expected from the insurance company.
- A.
The plant and machinery account (asset) is credited 75.000 while the gain/loss on fixed assets (profit/loss) account is debited 75.000
- B.
The plant and machinery account (asset) is debited 75.000 while the gain/loss on fixed assets (profit/loss) account is credited 75.000
- C.
The accumulated depreciations on plan and machinery account (asset) is debited 14.000 while the depreciations on plant and machinery account (profit/loss) is credited 14.000
- D.
The accumulated depreciations on plan and machinery account (asset) is credited 14.000 while the depreciations on plant and machinery account (profit/loss) is debited 14.000
- E.
The accumulated depreciations on plan and machinery account (asset) is debited 31.500 while the gain/loss on fixed assets account (profit/loss) is credited 31.500
- F.
The accumulated depreciations on plan and machinery account (asset) is debited 17.500 while the depreciations on plant and machinery account (profit/loss) is credited 17.500
- 6.None posted depreciation on equipment is 6.000.
- A.
The accumulated depreciations on equipment account (asset) is debited 6.000 while the depreciations on equipment account (profit/loss) is credited 6.000
- B.
The accumulated depreciations on equipment account (asset) is credited 6.000 while the depreciations on equipment account (profit/loss) is debited 6.000
- C.
The accumulated depreciations on equipment account (asset) is credited 6.000 while the gain/loss on fixed assets account (profit/loss) is debited 6.000
- 7.None posted new provision for bad debt is 17.000 as per 31.12.2013.
- A.
The trade debtors account (asset) is credited 17.000 while the bad debt account (profit/loss) is debited 17.000
- B.
The trade debtors account (asset) is credited 17.000 while the provision for bad debt account (asset) is debited 17.000
- C.
The provision for bad debt account (asset) is credited 17.000 while the bad debt account (profit/loss) is debited 17.000
- 8.None posted cost of goods for Q4 is 75.000.
- A.
The inventory account (asset) is credited 75.000 while the cost of goods sold account (profit/loss) is debited 75.000
- B.
The inventory account (asset) is debited 75.000 while the cost of goods sold account (profit/loss) is credited 75.000
- C.
The inventory account (asset) is credited 275.000 while the cost of goods sold account (profit/loss) is debited 275.000
- D.
The inventory account (asset) is credited 350.000 while the cost of goods sold account (profit/loss) is debited 350.000
- 9.None posted impairment of inventory is 12.000. Due to items no longer good for sale.
- A.
The inventory account (asset) is credited 12.000 while the cost of goods sold account (profit/loss) is debited 12.000
- B.
The inventory account (asset) is debited 12.000 while the cost of goods sold account (profit/loss) is credited 12.000
- 10.None posted property tax covering Q4 2013 to Q1 2014 is 40.000. The payment was made from the overdraft account before 31.12.2013.
- A.
The bank overdraft account (liability) is credited 40.000 while the premises expenses account (profit/loss) is debited 40.000
- B.
The bank overdraft account (liability) is credited 40.000 while the prepaid expenses (asset) is debited 40.000
- C.
The bank overdraft account (liability) is credited 40.000 while the premises expenses account (profit/loss) is debited 20.000 and the prepaid expenses (asset) is debited 20.000
- 11.None posted settlement the input and output VAT account to the VAT payable account.
- A.
The input VAT account (liability) is debited 10.000 while the VAT payable account (liability) is credited 10.000
- B.
The output VAT account (liability) is credited 56.000 while the VAT payable account (liability) is debited 56.000
- C.
The output VAT account (liability) is debited 56.000 while the VAT payable account (liability) is credited 56.000
- D.
The input VAT account (liability) is credited 10.000 while the VAT payable account (liability) is debited 10.000
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