Chp 5 - P2Q1 adjustments Flashcards
Additional information
A batch of goods costing $1 000 has a net realizable value $800 now….
→Impairment loss on inventory $200 (Exp) (Performance)
→minus $200 from inventory (Q)
Additional information
Advertising $15 000 was paid for 15 months up to 31 March 2022.
(accounting ends on 31 Dec 2021)
→ Minus $3 000 from Advertising Exp (in Q) (Performance)
→Prepaid Advertising expense (CA) $3 000 (Position)
Additional information
Commission income earned amounting to $300 was still outstanding.
→ Commission income RECEIVABLE (CA) $300 (Position)
→Add $300 to commission income (in Q) (Performance)
(Q) Given Salaries expense $18 000
Additional information
Annual salaries is $20 000.
→ Salaries expense PAYABLE (CL) $2 000 (Position)
→ADD$2 000 to Salaries expense -
18 000 + 2000 = $20 000 (Expense) (Performance)
(Q) Given rent income $20 000
Additional information
Rent income of $3 000 was received in advance.
→ Rent income received in advance (CL) $3 000 (Position)
→ Minus $3 000 from rent income
20 000 - 3000 = $17 000 (Performance)
(Q) Given Equipment cost $10 000
Accumulated dep - Equipment $3 000
Additional information
Deprecation is to be charged at 10% on cost for equipment
→ Dep on equipment (Expense) $1 000 (PERFORMANCE)
→ ADD $1 000 to Accumulated dep
3 000 + 1000 = $4 000 (Position)
(Q) Given Equipment cost $10 000
Accumulated dep - Equipment $6 000
Additional information
Equipment has a scrap value of $1 000 with a useful life of 3 years.
→ Cost - scrap value
No of years
Dep on equipment (Expense) $3 000 (PERFORMANCE)
→ ADD $3 000 to Accumulated dep
3 000 + 6000 = $9 000 (Position)
(Q) Given MV cost $10 000
Accumulated dep - MV $3 000
Additional information
Deprecation is at 10% reducing balance method for MV
→ Dep on MV (Expense) $700 (PERFORMANCE)
→ ADD $700 to Accumulated dep
3 000 + 700 = $3 700 (Position)
(Q) Given MV cost $10 000
Accumulated dep - MV $3 000
Additional information
Deprecation is at 10% reducing balance method for MV
→ Dep on MV (Expense) $700 (PERFORMANCE)
→ ADD $700 to Accumulated dep
3 000 + 700 = $3 700 (Position)
(Q) Trade receivable $10 000
Allowance for imp of trade receivables $800
Additional information
A review of the list of trade receivables showed that 10% of the balance may not be collectible.
→ 10% x TR = $1 000 (ending Allowance)
→ Compare with beg Allowance $800 -→ Increase in Allowance
→ Imp loss on trade receivables $200 Expense (Performance)
Current Asset
TR 10 000
Less Allowance for imp of TR 1000
(Q) Trade receivable $10 000
Allowance for imp of trade receivables $800
Additional information
A review of the list of trade receivables showed that 1% of the balance may not be collectible.
→ 1% x TR = $100 (ending Allowance)
→ Compare with beg Allowance $800 -→ DECREASE in Allowance
→ Imp loss on trade receivables ($700) Expense (REVERSAL) (Performance)
Current Asset
TR 10 000
Less Allowance for imp of TR 100
(Q) Loan from Sharp $100 000
Additional information
10% of the loan from Sharp is due for repayment on 30 June 2022
Accounting period ends o_n 31 Dec 2021._
→ $10 000 → Current portion of long term borrowings (CL)
(URGENT < 1 YEAR)
→ $90 000 → Long Term Borrowings (NCL) (owe> 1 year)
