2020 SASS 3N POA EOY P2 Q2

2020 SASS 3N POA EOY P2 Q2

2 D’ Isaac runs a food delivery business. The business rents out the space above the shop premises. D’ Isaac provided the following information for the year ended 30 June 2020.

Account balance at 1 July 2019

$

    Rent received in advance

2 000

    Salaries payable

7 500

  

During the year ended 30 June 2020

 

    Rent received by cheque

40 000

    Salaries paid by cheque

35 900

  

Account balance at 30 June 2020

 

    Rent received in advance

3 500

    Salaries payable

4 800

REQUIRED

a. Calculate the amount (show all workings) to be shown as rent income in the statement of financial performance of D’ Isaac’s business for the year ended 30 June 2020.

[2]

b. Calculate the amount of salaries expense incurred for the year ended 30 June 2020.

[2]

c. Prepare the journal entry to record the adjustments for salaries payable at 30 June 2020.

[2]

d. State an accounting theory a business should apply when recording salaries payable to employees.

[1]

The following ledger accounts are extracted from the books of D’ Isaac for the month of July 2020.

Cash at bank account

Date 

Particulars 

Debit 

Credit

Balance 

2020

 

$

$

$

July 1

Balance b/d 

  

8 900 Dr

7

Trade receivable – Noah

1 170

  

12

Sales revenue 

3 895

  

20

Trade payable – Luke

 

980 

 

24

Utilities expense

 

390

 

e. Explain the following entries.

[3]

i. 7 July

ii. 20 July

iii. 24 July

f. Calculate the balance of cash at bank at 31 July 2020. Show your workings clearly.

[2]

g. State the effect of one of the items in the cash at bank account on the profit for the month ended 31 July 2020.

[1]

[TOTAL 13]

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2000+40000-3500
38500

35900+4800-7500
33200

accrual basis of accounting theory or matching theory

i) The business received $1170 by cheque from trade receivable- Noah,


ii) The business paid trade payable- Luke $980, by cheque


iii) The business paid for utilities expense by cheque $390

8900+1170+3895-980-390= $12 595

sales revenue- profit increased by $3895
utilities expense- profit decreased by $390

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