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    Final Assignment 3 - Rev

    Uploaded by

    Ferdilia Gopal
    The document contains 7 exercises related to accounting concepts: 1. Calculating cash flow from operating activities using the indirect method for a company called Garfield Ltd. 2. Calculating a partner's share of total profit for Anastasia from a profit and loss appropriation statement. 3. Calculating depreciation expense and net book value for a machine purchased by Angela. 4. Recording a journal entry to record estimated bad debt expense. 5. Questions related to allowance for doubtful accounts and partnerships. 6. Calculating a partner's current account balance. 7. Calculating the correct creditor balance to report on a statement of financial position.

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    Final Assignment 3 - Rev

    Uploaded by

    Ferdilia Gopal
    42 views5 pages
    The document contains 7 exercises related to accounting concepts: 1. Calculating cash flow from operating activities using the indirect method for a company called Garfield Ltd. 2. Calculating a partner's share of total profit for Anastasia from a profit and loss appropriation statement. 3. Calculating depreciation expense and net book value for a machine purchased by Angela. 4. Recording a journal entry to record estimated bad debt expense. 5. Questions related to allowance for doubtful accounts and partnerships. 6. Calculating a partner's current account balance. 7. Calculating the correct creditor balance to report on a statement of financial position.

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    Final Assignment 3_rev

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    The document contains 7 exercises related to accounting concepts: 1. Calculating cash flow from operating activities using the indirect method for a company called Garfield Ltd. 2. Calculating a partner's share of total profit for Anastasia from a profit and loss appropriation statement. 3. Calculating depreciation expense and net book value for a machine purchased by Angela. 4. Recording a journal entry to record estimated bad debt expense. 5. Questions related to allowance for doubtful accounts and partnerships. 6. Calculating a partner's current account balance. 7. Calculating the correct creditor balance to report on a statement of financial position.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    42 views5 pages

    Final Assignment 3 - Rev

    Uploaded by

    Ferdilia Gopal
    The document contains 7 exercises related to accounting concepts: 1. Calculating cash flow from operating activities using the indirect method for a company called Garfield Ltd. 2. Calculating a partner's share of total profit for Anastasia from a profit and loss appropriation statement. 3. Calculating depreciation expense and net book value for a machine purchased by Angela. 4. Recording a journal entry to record estimated bad debt expense. 5. Questions related to allowance for doubtful accounts and partnerships. 6. Calculating a partner's current account balance. 7. Calculating the correct creditor balance to report on a statement of financial position.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 5

    Exercise 1- Operating Activities

    a. Compute net cash provided (used) by operating activities using the indirect method.

    Garfield Ltd
    Statement of Cash Flows (Indirect method)
    The year ended December 31, 2016

    Net Income 100,000.00


    Accounts Receivable (22,000.00)
    Accounts Payable 18,600.00
    Inventory (14,800.00)
    Depreciation 34,000.00 15,800.00
    Net Cash Flow from operating activity 84,200.00

    Exercise 2- Partnerships

    a. Calculate how much of the total profit is Anastasia is entitled to.

    Profit & Loss Appropriation Account


    Particulars Amount Particulars Amount
    Interest on Capital Net Partnership Profit $ 58,500.00
    Anastasia (75,000 x 8%) $ 6,000.00
    Georgina (60,000 x 8%) $ 4,800.00

    Salary
    Georgina $ 9,000.00

    Share of Profit
    Anastasia (38,700 x 3/5) $23,220.00
    Georgina (38,700 x 2/5) $15,480.00
    $58,500.00 $ 58,500.00
    Working Notes:
    Partnership Profit = $58,500
    Less Interest on capital Georgina = ($4800)
    Less Interest on capital Anestasia = ($6000)
    Less Salary Georgina = ($9000)
    Residual Partnership Profit = $38,700

    Question 3 – Plant Assets and Depreciation

    Angela

    Acquisition of machine 12,000.00


    Transportation of machine 1,300.00
    Cost of Installation 2,000.00
    15,300.00
    Repairs to the machine after breakdown 600.00
    Original Cost of the machine 15,900.00

    March 01 to December 31 = 10 months


    Salvage Cost = 0
    Last year depreciation = ((12 - M) / 12) X ((Cost - Salvage) / Life)
    ((12-10)/12) X ((15900)/10)
    (2/12) * 1590
    $265.00

    Netbook Value of the machine


    Cost of the machine – accumulated Depreciation
    $15,900.00 – $265
    $15,635.00
    Question 4 – Uncollectible Receivables

    Recording the Journal Entry in the General Ledger

    James Din

    Accounts Debit Credit

    Bad Debts Expense $720.00

    Accounts Receivables $720.00


    (Recording estimated Bad debt Account)
    To record the bad debt entry in your books, debit your Bad Debts Expense account and credit
    your Accounts Receivable account.

    Question 5 – Allowance for Doubtful Debts


    Question 6 – Partnerships

    Calculating the balance of Michael’s current account at 31 December

    Current Account – Michael


    Amount
    Opening Balance of current Account $ 11,486.00
    Add - Profit share of Michael ($28,595x3/7) $ 12,255.00

    Less - Drawings $ (16,500.00)

    Closing balance of current Account $ 7,241.00


    ___________
    Closing balance of Michael’s current Account is $7,241.00

    Question 7 – Payables and Accruals

    Calculating the correct value of creditors to be reported on Mark’s statement of Financial


    position at 31 October.

    Journal Entry

    Dr. Cr.

    Mark’s General Ledger ($79,850-$79,310) $540.00

    Purchases ($600-$60)
    $540.00

    Payable Control Account 79,850.00

    Purchases (540.00)

    New General Ledger Balance 79,310.00

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