2020 USS 3N POA EOY P1 Q3

2020 USS 3N POA EOY P1 Q3

3 Candy, owner of Cool Snacks Shop, provided the following information on 31 December 2019.

Capital, 1 January 2019

$60 000

Profit for the year

$32 980

The following transactions took place in 2019:

March

15

  Candy contributed her personal motor van of $17 500 for use by the business.

July 

30

  Candy sold her personal shares for $6 000 cash which was deposited into the business bank account. 

Candy provided the drawings account for the year ended 31 December 2019 below.

Drawings account

Date

Particulars

Debit

Credit

Balance

2019

 

$

$

$

Feb 9

Cash at bank

2 500

 

2 500 Dr

Aug 22

Office equipment

800

 

3 300 Dr

Dec 31

Capital

 

3 300

REQUIRED

a. Describe the transactions which took place on the following dates.

[2]

i. February 9

ii. August 22

b. Prepare the capital account for the year ended 31 December 2019.

[5]

On 1 January 2019, Candy rented a shop space to run her business. The rent costs $2 400 per month. Its rental expense paid by cheques during the year ended 31 December 2019 was $26 000.

REQUIRED

c. Calculate the rental expense incurred for the year ended 31 December 2019.

[1]

d. State the double entry needed to record the rental expense payable for the year ended 31 December 2019

[2]

[TOTAL 10]

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(i) Owner withdrew $2500 from the business bank account for own use.

(ii) Owner took an office equipment costing $800 for personal use.

2 400 x 12 = $28 800

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