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Accounting Assignment

Accounting Assignment
Name;
Date; may, 1 2019

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Accounting Assignment

Question #5

b)

Camron Brown

Statement of Cash Flows

For the Years Ending March 31, 2019

$ 2019

Cash Flows from Operating Activities

Net Income $ 22,575

Adjustment for

Depreciation Note#1, Note#2 $ 7,300

loss on sale of delivery van $ 200

loss on sale of shop equipment $ 300

interest expense $ 37,225

interest income $ (600)

Other Adjustments: Note#5

Add Reduction in Accounts Receivable $ 300

Add Increase in Wages Payable $ 400

Add Increase in Accounts Payable $ 2,400

Add decrease in Prepaid Expenses $ 500

Add increase in occurred expense $ 800

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Accounting Assignment

Subtract Increase in Inventory $ (3,300)

less interest expense $ (37,225)

Net Cash from Operating Activities $ 30,875

CASH FOR INVESTMENTS

Acquisitions of Shop Equipment Note#3 (8,200)

Delivery van Sold 19,800

Disposals of Shop equipment 1,500

loss on sale of delivery van $ (200)

loss on sale of shop equipment $ (300)

Acquisitions of hybird van $ (40,000)

Net Cashflow from investing activities $ (27,400)

Cash from Financing Activities $ -

Loan (45000-10000) $ 35,000

Capital redeemed Note#4 $ (62,850)

Net Cash from Financing Activities $ (27,850)

Net cashflow $ (24,375)

Add Cash and cash equlent (24100+20000) $ 44,100

Less cash and cash equlent (21125) +10000 $ 19,725

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Accounting Assignment

Workings
Note#1

Accumulated depreciation – Equipment

Opening Bal 14600

Depreciation 1300 sold equipment 3200

closing Bal 16500

17800 17800

Note#2

Accumulated depreciation- van

opening Bal 10000

Depreciation 6000

closing Bal 4000

10000 10000

Depreciation= (6000+1300) = 7300

Note#3

Shop equipment
opening Bal 14600
depreciation 1300
sale of equipment 5000
Purchase 8200
closing Bal 16500
22800 22800

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Accounting Assignment

Note#4

share capital

opening 82200

Drawings 62850

capital issued 62850

Closing 82200

82200 82200

Note#5

Working capital changes

Account Receivable

(8000-7700)
Add Reduction in Accounts Receivable $300

Account Payable

(8400-6000)
Add Increase in Accounts Payable $2,400

Wages payable

(1800-1400)
Add Increase in Wages Payable $400

Prepaid Expenses

(1100-600)
Add decrease in Prepaid Expenses $500

Occurred Expenses

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Accounting Assignment

(2800-2000)
Add increase in occurred expense $800

Inventory

(18000-21300)
Subtract Increase in Inventory ($3,300)

A)

The most significant reason is to provide owners and managers insight into the company's cash position.
This knowledge better equips management to make informed decisions about regular business
operations, the need for further investment in the business, and capital from equity or debt partners.

C)

Cashflow results of Camron are quite satisfactory in terms of operating activities but financing and
investing activities are more concern areas where focus should be to avoid cash leakage in this area to
make business more liquid and secure.

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Accounting Assignment

A)

(i) Answer

Appropriate Statement

Smith John Total debit credit

Profit for the year 572000

Salaries 120000 150000 270000 270000


Interest on capital
4% note#2 24000 16000 40000 40000

144000 166000
Residual profit
Note # 3 157200 104800 262000 262000

301200 270800

572000 572000

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Accounting Assignment

Workings

Note#1

Smith And John Share is

= 600000+400000= 1000000

Smith= 6/10 *5 = 3

John = 4/10*5 =2

Note#2

Interest on capital

Smith 4%

600000*4% = 24000

John 4%

400000*4% = 16000

Note#3

Residual Profit

Profit for the year 572000

Less Interest on capital (24000+16000) (40000)

Salaries of partner (12000+15000) (270000)

Residual profit = 262000

Smith Share is 3/5 *262000= 157200

John share Is 2/5 *262000 = 104800

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Accounting Assignment

(ii)

Smith Account

debit credit

270000
Drawings
75500
Opening
106700 301200
closing balance Total share
376700 376700

(iii)

Statement of changes in equity

Share capital retained earning Total

Smith 106700 157200 263900

John 76200 104800 181000

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Accounting Assignment

B)

Journal Entry

debit credit

Smith Account 129500

Capital 75500

Goodwill 54000

Goodwill apportioned to smith on 3/5 ratios

John Account 101400

Capital 65400

Goodwill 36000

Goodwill apportioned to john in 2/5 ratio

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Accounting Assignment

c)

Journal Entry

Date debit credit

Realization account 315000

Account Receivable 32500

Non-current assets 240000

Inventory 42500

Assets released on dissolution

Cost of dissolution 20000

Realization account 20000

cost incured on disolution of partnership

Partner - Ana account 150000

Bank account 150000

Being amount paid to partners

Partner- Maria 150000

Bank Account 150000

Being amount paid to partners

Overdraft- bank 9000

Realization account 9000

Being liability Paid on dissolution

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Accounting Assignment

Account payable 68000

Realization account 68000

Being liability Paid on disolution

Loss on dissolution 54000

non-current assets 54000

loss on dissolution record due to dissolution

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