The problem to be resolved: The following trial balance was extracted from the books of Maximum Auto Supplies Ltd at July 31, the end of the company's financial year. The company is owned by Samuel Maximo and is in the business of buying and selling movies on tapes. A/C Name Cash Accounts receivable Allowance for bad debt Merchandise Inventory Store Supplies Prepaid Rent Computer and Equipment Accumulated depreciation -Computer and Equipment Delivery Truck Accumulated depreciation - Delivery Truck Accounts payable Wages payable Uneamed Sales revenue Notes Payable, Long Term Samuel Maximo, Capital Samuel Maximo, Withdrawals Sales revenue Sales discount Sales returns and allowances Cost of goods sold Wages Expense Rent Expense Trial Balance as at July 31, 2021 Depreciation Expense - Computer and Equipment Depreciation Expense -Delivery Truck Store Supplies Expense Utilities Expense Bad Debt Expense Interest Expense Total DR Trial Balance 750,000 290,500 167,050 120,000 510,000 1,200,000 1,900,000 105,000 73.250 52,100 495,000 325.125 680,000 65,000 220,000 105,555 7,058,580 CR 25,000 150,000 400,000 150,000 1,000,000 2,500,000 2,833,580 7,058,580 The following additional information is available at July 31, 2021: (i) Rent of $510,000 was paid on April 1, 2021, for six (6) - months to September 2021. (ii) The computer and equipment were purchased on December 1, 2020 and have an estimated useful life of 10 years. This asset is depreciated on the double-declining depreciation method down to a residual value of $100,000.
The problem to be resolved: The following trial balance was extracted from the books of Maximum Auto Supplies Ltd at July 31, the end of the company's financial year. The company is owned by Samuel Maximo and is in the business of buying and selling movies on tapes. A/C Name Cash Accounts receivable Allowance for bad debt Merchandise Inventory Store Supplies Prepaid Rent Computer and Equipment Accumulated depreciation -Computer and Equipment Delivery Truck Accumulated depreciation - Delivery Truck Accounts payable Wages payable Uneamed Sales revenue Notes Payable, Long Term Samuel Maximo, Capital Samuel Maximo, Withdrawals Sales revenue Sales discount Sales returns and allowances Cost of goods sold Wages Expense Rent Expense Trial Balance as at July 31, 2021 Depreciation Expense - Computer and Equipment Depreciation Expense -Delivery Truck Store Supplies Expense Utilities Expense Bad Debt Expense Interest Expense Total DR Trial Balance 750,000 290,500 167,050 120,000 510,000 1,200,000 1,900,000 105,000 73.250 52,100 495,000 325.125 680,000 65,000 220,000 105,555 7,058,580 CR 25,000 150,000 400,000 150,000 1,000,000 2,500,000 2,833,580 7,058,580 The following additional information is available at July 31, 2021: (i) Rent of $510,000 was paid on April 1, 2021, for six (6) - months to September 2021. (ii) The computer and equipment were purchased on December 1, 2020 and have an estimated useful life of 10 years. This asset is depreciated on the double-declining depreciation method down to a residual value of $100,000.
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 4EA: Window World extended credit to customer Nile Jenkins in the amount of $130,900 for his purchase of...
Related questions
Question
Description and Instructions
You are a student from a prominent university and were sent out to work with a leading merchandizing company as a part of a work experience program. Having been introduced to the general manger you were told that the accountant who normally prepares the financial statements has suddenly resigned and there is no one available to prepare the company’s financial statements which are now due. As aspiring university student, you have expressed an interest in taking on the task. You are required to analyse the problem at hand then apply the accrual basis of accounting in the preparation of the company’s financial statements.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College