PRINCIPLES OF ACCOUNTING QUESTIONS -

Please provide correct and clear explanation.

Question 1 -

A company bought a machine on 1 January 2013 for S$15,500. The company use double decline balance method and the useful life was 4 years. On 31 March 2016, the machine was sold for S$5,900 cash. The financial year ends on 31 December.

Required:

a) Show the relevant entries for the disposal of machine.

b) Determine the gain or loss on disposal by showing the disposal account.

Question 2 -

The cash book of Carrier Ltd was a debit balance of $3,220 as 30 November 2016. But the bank statement on the same date showed $2,275 (Cr) balance.

The following discrepancies were detected:

a) Cheques paid to T.K Oh of $720 and Omar of $880 has not been presented to the bank for payment.

b) Credit transfer of $910 to Carrier Ltd was not recorded in the company books but on the bank statement.

c) Payments for insurance of $1,120 and to DB Trading of $800 were deducted in the bank statement but not in the cash book.

d) A cheque of $1440 that was deposited on end of the month was not credited into the bank statement.

e) The bank statement showed a bank charges of $95.

Required:

a) Determine the adjusted cash account;

b) Bank reconciliation statement as 30 November 2016.

Question 3 -

Prepare a comprehensive income and statement of financial position.