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]
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 | Balance | ||
2020 | $ | $ | $ | |
July 1 | Balance b/d | 8 900 Dr | ||
7 | Trade receivable – Noah | 1 170 | ||
12 | 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]
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