Q.1 Molly Smith opened Molly's Cleaning Services on June 1. During the month of June, the following transactions were completed:
Note: Molly's Cleaning Services is registered for GST.
Required:
a)Journalise the June transactions.
b)Prepare a trial balance on a worksheet
c) Enter the following adjustments on the work sheet & complete the worksheet.
- Earned but unbilled revenue at June 30 was $950(excl. GST)
- Depreciation on the truck for the month was $185
- An inventory count showed $750 of the cleaning supplies were still on hand.
- Accrued but unpaid employee wages were $550.
- One month's insurance expired.
d) Prepare the income statement for the month of June.
e) Journalise closing entries & complete the closing process.
f) Prepare T accounts for Cash, Service Revenue & GST Clearing. Include closing entries wherever appropriate.
g) Prepare a post-closing trial balance as at 30 June.
Q.2 Simisa Inc. is a retailer operating in Devonshire. Simisa uses perpetual
inventory method. Assume that all transactions are cash transactions. You are provided with the following information for Simisa Inc. for the month of March 2016.
Required:
a) For each of the following inventory costing methods, prepare the perpetual inventory record to calculate i) cost of goods sold, ii) ending inventory & iii) gross profit.
b) Compare & explain the results for the three methods in your own words. (For the purposes of the question, please ignore GST)
Standard rubrics
Question 1
Ability to record transactions in journal formats , including adjustment & closing entries using correct chart of accounts Evidence of excellentunderstanding andapplication ofaccountingprinciples. Ability to use correct amounts, &references etc. Ability to prepareprofit& loss report,adjusted trialbalance, post-closingtrial balance &Taccounts Evidence of excellentunderstanding andapplication ofaccountingprinciples inpreparation offinancial reports.
Question 2
Ability to inventory table for perpetualinventory system &calculate COS, grossmargin & closinginventory values underFIFO, LIFO & Av costMethods Evidence of excellentunderstanding andapplication ofaccountingprinciples. Ability to calculate cos& thereforegross margin underdifferent inventorycosting methods Ability to analyse the differences between thevarious inventorycosting methods.