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Topic 2 (week 3) tutorial questions

The document outlines a tutorial for Week 3 focused on the recording process in accounting, covering double-entry accounting, general journals, and ledgers. It includes homework questions related to normal account balances, transaction impacts on the accounting equation, and specific business transactions for various scenarios. Students are required to journalize transactions and prepare T accounts for different businesses.

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6 views

Topic 2 (week 3) tutorial questions

The document outlines a tutorial for Week 3 focused on the recording process in accounting, covering double-entry accounting, general journals, and ledgers. It includes homework questions related to normal account balances, transaction impacts on the accounting equation, and specific business transactions for various scenarios. Students are required to journalize transactions and prepare T accounts for different businesses.

Uploaded by

fuyunshen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Week 3 tutorial

Topic 2: The recording process (Part 1): Double-entry accounting, general


journal, and ledgers

HOMEWORK QUESTIONS

1. Chapter 2 – Questions 2.3 (p.116 of Financial Accounting - Reporting, Analysis and


Decision Making 7th Edition)

2. What are the normal balances of the following accounts?

a) Accounts receivable
b) Accounts payable
c) Office supplies
d) Electricity expense
e) Wages payable
f) Drawings

3. Explain how each of the following transaction affects the basic accounting equation:

a) Received electricity bill for the month.


b) Purchased a machine on credit.
c) Repaid bank loan in full.
d) Received cash for services provided to customers.
e) Paid cash to purchase office supplies.

4. John opened a tennis coaching business on 1 July 2021. John will start giving tennis
classes in July. The following transactions occurred during the July operations:

July 1 Deposited $600,000 into a business bank account


2 Purchased new tennis equipment for a total of $9,000. An initial $4,800 is paid
in cash immediately, and the rest is to be paid in 2 months’ time.
10 Sent invoices to a number of clients for tennis classes for a total amount of
$18,000.
12 Paid $6,000 for a 1-year insurance policy on the tennis equipment, effective
from 12 July 2021.
16 Received $14,000 cash from clients billed on 10 July.
20 Received $20,000 cash from clients who paid immediately for tennis classes.
These clients were not invoiced previously.
25 John withdrew $12,000 cash from the business for personal use.
30 Received the remaining amount from clients billed on 10 July.
31 Paid rent for July, $1,000.

Required:

1
(a) Journalise the above transactions (narrations are NOT required).

(b) Open T accounts for the following accounts:


i) Cash
ii) Accounts receivable
iii) Service revenue

5. The following information relates to the business of Bruce’s Dry Cleaning Services for
the month of November 2021:
November 2 Paid $12,000 in advance for 3-month’s rent between December 2021 to
February 2022.
5 Purchased a block of land for $280,000. Paid a deposit of $60,000 and
a bank loan with XYZ Bank was arranged for the remaining balance.
7 Received $5,000 from customers for amounts owed from the previous
month.
10 Purchased supplies from Adrian Ltd costing $15,000 on credit, payable
in 30 days.
15 Earned revenue of $6,000. Of this, 40% of the fees were collected in
cash and 60% will be received within 30 days.
20 Received a payment in advance of $10,000 from a client for a service
to be performed in December 2021.
21 Paid $12,000 owed to suppliers for business supplies that had been
purchased on credit in the previous month.
26 Bruce withdrew $3,000 from the business bank account for personal
use.
27 Paid Adrian Ltd in full.

Required:
Prepare general journal entries for the business for the month of November 2021.
Narrations are NOT required.

6. Ferguson opened the ‘Ferguson’s Guitar School’ on 1 July 2021. The following
information relates to the business for the month of July 2021:
July 1 Invested $100,000 capital in the business.
7 Purchased equipment costing $42,000 on credit.
10 Paid salaries of $15,800.
14 Purchased supplies for $10,000. $6,000 was paid in cash and the
balance payable in 60 days.
15 Sent invoices to a number of clients for services provided for a total
amount of $18,000.
20 Ferguson withdrew $21,000 from the business for his personal use.
24 Paid $9,800 for advertising incurred.
28 Received $3,700 from customers to reduce the balance in their
accounts.

2
30 Earned $78,000 in tuition fees during the month. Of these, 25% of the
fees were collected in cash and 75% will be paid within 2 months.

Required:
(a) Prepare the general journal entries to record the above transactions that occurred
during June (narrations are NOT required).
(b) Post the entries to ledger T accounts.

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