An introduction to principles and practice by Edward A Clarke PDF

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365

Accounting: An Introduction to Principles and Practice – Solutions Manual: Chapter 10

Chapter 10 Matching expense and revenue to the accounting period Question 10.1 Horizontal left to right: cash accounting, adjustments, tax invoice Horizontal reversed: accrual, expenses, end of period, accounting, matching principle, balance day, revenues

Question 10.2 General Journal of . . . 30 Jun 22

GJ 1

Electricity

1 800

Expense Accrued

1 800

Balance day adjustment for electricity

Profit and Loss

10 800

Electricity [9000 + 1800]

10 800

Electricity closed out to profit and loss 1 Jul 22

Expense Accrued

1 800

Electricity

1 800

Reversal of balance day adjustment for electricity accrued

Extract General Ledger of . . .

Electricity 30 Apr 22

Balance b/d

30 Jun 22

Expense Accrued [bda]

9 000 GJ

30 Jun 22

Profit and Loss

GJ

1 800 10 800

31 Jul 22

Accounts Payable Ctrl

PJ

2 700

10 800 1 Jul 22 31 Jul 22

Expense Accrued [rev]

GJ

Balance c/d

Balance b/d

1 800 900

2 700 1 Aug 22

10 800

2 700

900

Expense Accrued 1 Jul 22

Electricity [reversal]

GJ

1 800

30 Jun 22

Electricity [balance day adj]

GJ

1 800

PJ

2 700

Accounts Payable Control 31 Jul 22

Electricity

© Cengage Learning Australia 2019

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Accounting: An Introduction to Principles and Practice – Solutions Manual: Chapter 10

Question 10.3 General Journal of . . . 30 Jun 22

GJ 1

Wages

350 Expense Accrued

350

Accrual of wages incurred but not paid

Profit and Loss

20 350

Wages

20 350

Balance transferred to profit and loss 1 Jul 22

Expense Accrued

350

Wages

350

Reversal of balance day adjustment for wages accrued

Extract General Ledger of . . .

Wages 30 Jun 22

Balance b/d Expense Accrued [bda]

20 000

30 Jun 22

Profit and Loss

350 20 350

4 Jul 22

Bank [payment]

20 350

1 400

1 Jul 22

Expense Accrued [reversal]

4 Jul 22

Balance c/d

1 400 5 Jul 22

Balance b/d

20 350

350 1 050 1 400

1 050

Expense Accrued 1 Jul 22

Wages [reversal]

350

30 Jun 22

Wages [balance day adjustmn’t]

350

Bank 4 Jul 22

Payment [wages]

© Cengage Learning Australia 2019

1 400

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Accounting: An Introduction to Principles and Practice – Solutions Manual: Chapter 10

Question 10.4 General Journal of . . . 30 Jun 22

GJ 1

Salaries

1 160 Expense Accrued

1 160

Accrual of four days’ salary

Profit and Loss

69 160

Salaries

69 160

Balance transferred 1 Jul 22

Expense Accrued

1 160

Salaries

1 160

Reversal of balance day adjustment for salaries accrued

Extract General Ledger of . . .

Salaries 1 Jun 22 30 Jun 22

Balance b/d

63 400

Bank [payment]

4 600

Expense Accrued [bda]

1 160

30 Jun 22

Profit and Loss

69 160

69 160 10 Jul 22

Bank [payment]

2 900

69 160 Expense Accrued [reversal] 10 Jul 22 Balance c/d

1 160 1 740

1 Jul 22

2 900 11 Jul 22

Balance b/d

2 900

1 740

Expense Accrued 1 Jul 22

Salaries [reversal]

1 160

30 Jun 22

Salaries [balance day adjustment]

1 160

Payment [salaries]

2 900

Bank 10 Jul 22

Question 10.5 General Journal of . . . 30 Jun 22

GJ 1

Wages

750

Electricity

430

Stationery

150

Expense Accrued

1 330

Expenses accrued at the end of the accounting period 1 Jul 22

Expense Accrued

1 330

Wages

750

Electricity

430

Stationery

150

Reversals of balance day adjustment expenses accrued

© Cengage Learning Australia 2019

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Accounting: An Introduction to Principles and Practice – Solutions Manual: Chapter 10

Question 10.6 General Journal of . . . 30 Jun 22

GJ 1

Expense Prepaid

500

Rates

500

Adjustment for rates prepaid by $500

Profit and Loss

2 000

Rates

2 000

Balance transferred 1 Jul 22

Rates

500 Expense Prepaid

500

Reversal of balance day adjustment of rates prepaid

Extract General Ledger of . . .

Rates 30 Jun 22

Balance b/d

2 500

30 Jun 22

Expense Prepaid [bal day adj] Profit and Loss

2 000

2 500 1 Jul 22

Expense Prepaid [reversal]

500 2 500

500

Expense Prepaid 30 Jun 22

Rates [balance day adjustment]

500

1 Jul 22

Rates [reversal]

500

Question 10.7 General Journal of . . .

GJ 1

30 Jun 22 Expense Prepaid

a

2 400

Insurance

2 400

Insurance prepaid 8 months [1 Jul 2022 to 28 Feb 2023]

Profit and Loss Insurance

b

3 200 3 200

Balance transferred 1 Jul 22

c

Insurance

2 400

Expense Prepaid

2 400

Reversal of balance day adjustment insurance prepaid

Extract General Ledger of . . .

Insurance 1 Feb 22 28 Feb 22

Balance b/d

2 000

Bank [payment]

3 600

30 Jun 22

Expense Prepaid [bda]

2 400

Profit and Loss

3 200

5 600 1 Jul 22

Expense Prepaid [reversal]

5 600

2 400

Expense Prepaid 30 Jun 22

Insurance [balance day adjustmnt]

2 400

1 Jul 22

Insurance [reversal]

© Cengage Learning Australia 2019

2 400

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Accounting: An Introduction to Principles and Practice – Solutions Manual: Chapter 10

Question 10.8 Not required by the question, but very helpful in obtaining the correct answer!

Insurance 31 Dec 22

1 730 31 Dec 22 Expense Prepaid [bda]

Balance

Profit and Loss

1 600

1 730 1 Jan 23

Expense Prepaid [reversal]

130 1 730

130

Expense Prepaid 31 Dec 22

Insurance [bda]

130

1 Jan 23

Insurance [reversal]

130

Wages 31 Dec 22

31 360 31 Dec 22 Profit and Loss

Balance Expense Accrued [bda]

31 800

440 31 800

31 800 1 Jan 23

Expense Accrued [reversal]

440

Expense Accrued 1 Jan 23

440 31 Dec 22 Wages [bda]

Wages [reversal]

440

General Journal of . . . 31 Dec 22

Expense Prepaid

GJ 1 130

Insurance

130

Adjustment for expense prepaid

Wages

440 Expense Accrued

440

Adjustment for expense accrued

Profit and Loss

33 400

Insurance

1 600

Wages

31 800

Balances transferred 1 Jan 23

Insurance

130

Expense Prepaid

130

Reversal of balance day adjustment insurance prepaid

Expense Accrued

440

Wages

440

Reversal of balance day adjustment wages accrued

continued

© Cengage Learning Australia 2019

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finalised

Question 10.8

Extract Income Statement of . . . for the year ended 31 December 2022

less Expenses General and Administrative Insurance

1 600

Wages

31 800

33 400

Extract Balance Sheet of . . . as at 31 December 2022

Current Assets Expense Prepaid

130

...

Current Liabilities Expense Accrued

440

Question 10.9 General Journal of . . . 30 Jun 22

GJ 1

Revenue Accrued

375

Interest Received

375

Interest due but not yet received

Interest Received

2 513

Profit and Loss

2 513

Balance transferred 1 Jul 22

Interest Received

375

Revenue Accrued

375

Reversal balance day adjustment interest revenue accrued

Extract General Ledger of . . .

Interest Received 30 Jun 22

Profit and Loss

2 513

30 Jun 22

Balance b/d Revenue Accrued [bda]

2 513 1 Jul 22

Revenue Accrued [reversal]

2 138 375 2 513

375

Revenue Accrued 30 Jun 22

Interest Received [bda]

375

1 Jul 22

Interest Received [reversal]

© Cengage Learning Australia 2019

375

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Accounting: An Introduction to Principles and Practice – Solutions Manual: Chapter 10

Question 10.10 General Journal of . . . 30 Jun 22

GJ 1

Revenue Accrued

1 250

Interest Received

1 250

Interest accrued on government bonds

Interest Received

3 000

Profit and Loss

3 000

Balance transferred 1 Jul 22

Interest Received

1 250

Revenue Accrued

1 250

Reversal balance day adjustment interest revenue accrued

Extract General Ledger of . . .

Interest Received 30 Jun 22

Profit and Loss

3 000

30 Jun 22

Balance

1 750

Revenue Accrued [bda]

1 250

3 000 1 Jul 22

Revenue Accrued [reversal]

3 000

1 250

Revenue Accrued 30 Jun 22

Interest Received [bda]

1 250

1 Jul 22

Interest Received [reversal]

1 250

Question 10.11 Not required by the question, but very helpful in obtaining the correct answer! Extract General Ledger of . . .

Wages 31 Dec 22

Balance Expense Accrued [bda]

76 600 31 Dec 22 Profit and Loss

77 800

1 200 77 800

77 800 1 Jan 23

Expense Accrued [reversal]

1 200

Expense Accrued 1 Jan 23

Wages [reversal]

1 200 31 Dec 22 Wages [bda]

1 200

Interest Received 31 Dec 22

Profit and Loss

8 200 31 Dec 22 Balance Revenue Accrued [bda] 8 200

1 Jan 23

Revenue Accrued [reversal]

6 500 1 700 8 200

1 700

Revenue Accrued 31 Dec 22

Interest Received [bda]

1 700

1 Jan 23

Interest Received [reversal]

1 700 continued

© Cengage Learning Australia 2019

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finalised

Question 10.11

General Journal of . . . 31 Dec 22

GJ 1

Wages

1 200 Expense Accrued

1 200

Wages accrued

Revenue Accrued

1 700

Interest Received

1 700

Revenue not yet received

Interest Received

8 200

Profit and Loss

8 200

Revenue closed out

Profit and Loss

77 800

Wages

77 800

Expense closed out 1 Jan 23

Interest Received

1 700

Revenue Accrued

1 700

Reversal balance day adjustment interest revenue accrual

Expense Accrued

1 200

Wages

1 200

Reversal of balance day adjustment wages accrual

Extract Income Statement of . . . for the year ended 31 December 2022

add Other Revenue Interest Received

8 200

less Expenses General and Administrative Wages

77 800 [Net balance

69 600]

Extract Balance Sheet of . . . as at 31 December 2022

Current Assets 1 700

Revenue Accrued ...

Current Liabilities 1 200

Expense Accrued [Net balance 500]

© Cengage Learning Australia 2019

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Accounting: An Introduction to Principles and Practice – Solutions Manual: Chapter 10

Question 10.12 General Journal of . . . 30 Jun 22

GJ 1

Rent Received

600

Revenue Received in Advance

600

Adjustment for July rent received in June

Rent Received

7 200

Profit and Loss

7 200

Balance transferred 1 Jul 22

Revenue Received in Advance

600

Rent Received

600

Reversal balance day adjustment rent received in advance

Extract General Ledger of . . .

Rent Received Revenue Recd in Adv [bda]

30 Jun 22

600

Profit and Loss

30 Jun 22

Balance b/d

7 800

7 200 7 800

7 800 1 Jul 22

Revenue Rec’d in Adv [rev]

600

Revenue Received in Advance 1 Jul 22

Rent Received [reversal]

600

Rent Received [bda]

30 Jun 22

600

Question 10.13 General Journal of L Bathurst 30 Jun 22

GJ 1

Rent Received

1 750

Revenue Received in Advance

1 750

Adjustment for July rent received in June

Rent Received

21 000

Profit and Loss

21 000

Balance transferred 1 Jul 22

Revenue Received in Advance

1 750

Rent Received

1 750

Reversal balance day adjustment rent received in advance

Extract General Ledger of L Bathurst

Rent Received 30 Jun 22

Revenue Rec’d in Adv [rev] Profit and Loss

1 750

30 Jun 22

Balance b/d

22 750

21 000 22 750

22 750 1 Jul 22

Inc Rec’d in Advance [rev]

1 750

Revenue Received in Advance 1 Jul 22

Rent Received [reversal]

1 750

30 Jun 22

Rent Received [bda]

© Cengage Learning Australia 2019

1 750

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Accounting: An Introduction to Principles and Practice – Solutions Manual: Chapter 10

Question 10.14 General Journal of . . . 30 Jun 22

GJ 1

Expense Prepaid

750

Insurance

750

Adjustment for insurance prepaid

Wages

600 Expense Accrued

600

Adjustment for wages accrued

Revenue Accrued

350

Interest Received

350

Adjustment for interest receivable

Rent Received

450

Revenue Received in Advance

450

Adjustment for rent received in advance

Extract Balance Sheet of . . . as at 30 June 2022

Current Assets Expense Prepaid

750

Revenue Accrued

350

1 100

Current Liabilities Expense Accrued

600

Revenue Received in Advance

450

1 050

General Journal of . . . 1 Jul 22

Insurance

GJ 1 750

Expense Prepaid

750

Reversal balance day adjustment insurance prepaid

Expense Accrued

600

Wages

600

Reversal balance day adjustment wages accrued

Interest Received

350

Revenue Accrued

350

Reversal balance day adjustment interest revenue accrued

Revenue Received in Advance Rent Received

450 450

Reversal balance day adjustment rent received in advance

© Cengage Learning Australia 2019

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Accounting: An Introduction to Principles and Practice – Solutions Manual: Chapter 10

Question 10.15 General Journal of Enid Fisher 30 Jun 22

Expense Prepaid

GJ 1 3 050

Insurance

2 500

Rent

550

Adjustment for insurance and rent prepaid

Rent Received

250

Revenue Received in Advance

250

Adjustment for rent received in advance

Bad Debts

990

GST Payable

99

Account Receivable Control

1 089

Adjustment for additional bad debts written off

Salaries

585 Expense Accrued

585

Adjustment for salaries incurred but not paid

Revenue Accrued

957

Interest Received

957

Adjustment for interest receivable

Rent Received [3016 – 250]

2 766

Interest Received [1042 + 957]

1 999

Profit and Loss

4 765

Revenue closed out to profit and loss account

Profit and Loss

27 816

Salaries [14 624 + 585]

15 209

Insurance [6573 – 2500]

4 073

Rent [7060 – 550]