IFA Assignment2 Solutions

Trial balance Adjustments
Account Debit Credit Date Debit2 Date2 Credit2

Cash 9200
Accounts receivable 1500 A 2000
Prepaid rent 2400 B 800
Supplies 2200 C 1820
Furniture 81000
Accumulated depreciation 3900 D 1350
Accounts payable 3500
Salary payable E 3120
Common sotck 15000
Retained earnings 71020
Dividends 3600
Service revenu 10000 A 2000
Salary expense 3000 E 3120
Rent expense B 800
Utilites expense 520
Depreciation expense D 1350
Supplies expense C 1820
Total 103420 103420 9090 9090
Tot furnitureDepreciationRest value

Depreciation furniture 81000 16200 64800 1350
3120
requirement 2
Balance of Kings, Inc.
Income statement Balance of Kings, Inc.
Month ended at Aug. 31, 2016 Statement of changes in Equity
Income statement of BalanceColumn2 Month ended at Aug. 31, 2016
Revenues
Service revenues 12000 Assets ($) Equities ($)
Retained
Current
Expenses earnings
Share
Cash 9200
Salary expense 6120 capital
Rent expense 800 Supplies 380
Prepaid
1600
Utilites expense 520 rent
Accounts Liabilities
3500 ($)
Depreciation expense 1350 receivable
Non- Accounts
Supplies expense 1820 current payable
Furniture 75750 Salary

Net income 1390 payable
Total
Total assets 90430 liabilities &
equity
Balance of Kings, Inc.

Statement of changes in Equity
Month ended at Aug. 31, 2016
Month ended at Aug. 31, 20 Column2
Retained earnings last year 71020
Net income 1390
Dividends 3600
Total retained earnings 68810
Adjusted trial balance
Date3 Debit3 Date4 Credit3 Explanation furniture
9200 0 Balance sheet Furniture, cost
3500 0 "- Accumulated depreciation"
2400 800 =
2200 1820 Furniture, net
81000 0
0 5250 You could also write furniture net
0 3500
0 3120
0 15000
0 71020
3600 0
0 12000
6120 0
800 0
520 0
1350 0
1820 0
112510 112510
Equities ($)
68810
15000
Share capital is naam die hij verkiest, niet common stock
3500
3120
90430
year 1 year 2
Furniture, cost 40000 40000
"- Accumulated depreciation" 1000 20000
Furniture, net 30000 20000
furniture net
Trial balance Adjustments Adjusted trial balance
Account Debit Credit Date Debit2 Date2 Credit2 Date3
Cash 8000
Accounts receivable 4200
Supplies 800 A 400
Prepaid rent 1200 B 100
Land 43000
Accounts payable 12000
Salary payable C 1000
Unearned service revenu 700 D 500
Note payable, due in three years 25400
Common stock 5000
Retained earnings 9300
Service revenue 9100 D 500
Salary expense 3400 C 1000
Rent expense B 100
Adveritsing expense 900
Depreciation expense
Supplies expense A 400
Total 61500 61500 2000 2000
Debit Credit Verschil
Answer 1 61500 59500 2000 Pas 23400 van Notes payable aan naar 25400
Answer 2 see trial balance above
Answer 3 Current ratio = current assets/current liabilities
1.05 Current assets 13700 Waarom is unearned service reve
Current liabilities 13200
Unearned revenue is money receive
service or product that has yet to b
thought of as a "prepayment" for g
De ratio is groter dan 1 wat wilt zeggen dat de current liabilities company is expected to supply to t
betaald kunnen worden met de current assets. Maar de WC en result of this prepayment, the
WCR geeft ons een beter zicht. Enkele opmerkingen over de the revenue earned until the
current ratio
1. 1.03 = laag > weak current position
2. 1.03 of current assets for each $ 1 of current liabilities
3. Company will have trouble paying current liabilities.
WC = current assets - current debt

500
WCR = accounts receivable + cash - accounts payable
200
We zien dat WC > WCR dus goede liquidity position.

Adjusted trial balance
Debit3 Date4 Credit3
8000
4200
400
1100
43000
12000
1000
200
25400
5000
9300
9600
4400
100
900
400
62500 62500
an naar 25400
current ratio : ability of the firm to pay back his short time de
Waarom is unearned service revenu een liability? Hij vindt cash conversion ratio interessanter: dat is eigenlijk w
Hij gaat geen ratio's vragen op examen!!!
Unearned revenue is money received by an individual or company for a
service or product that has yet to be provided or delivered. It can be
thought of as a "prepayment" for goods or services that a person or
company is expected to supply to the purchaser at a later date. As a
result of this prepayment, the seller has a liability equal to
the revenue earned until the good or service is delivered.
m to pay back his short time debt; it is a measure for liquidity
nteressanter: dat is eigenlijk working capital

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Trial balance Adjustments

Account Debit Credit Date Debit2 Date2 Credit2

Tot furnitureDepreciationRest value

Furniture 75750 Salary

Balance of Kings, Inc.

Furniture, net 30000 20000

WC = current assets - current debt

We zien dat WC > WCR dus goede liquidity position.

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