Answer 1 Accounting information Non Accounting information L & OE as mentioned above Market Demand of product Depreciation of 1 old Truck , 1 New Truck, 1 PC, 1 Grinding machine + cash Services from Accountant Zimmer Cost of Purchase of accounting software Efficiency of the worker and truck driver Salary to be paid to two worker and one driver Interest to be paid to the bank Income statement Cost of supplies and parts necessary to run and maintain the business
Answer 2 Opening balance Sheet on February 2011 Assets Liabilities and OE Current assets Liabilities Cash from self +10,000 Cash from family +90,000 Credit or A/P to bank 1,12,000 Cash down payment -50,000 Total current asset (A) =50,000 Fixed assets OE 1 old Truck , 1 New Truck, 1 PC, 1 Grinding machine 65,000 1 old Truck , 1 New Truck, 1 PC, 1 Grinding machine + cash 75,000 warehouse 1,62,000 Family 90,000 Total Fixed asset (B) 2,27,000 Total Owner's Equity 1,65,000
Total Asset (A+B) 2,77,000 Total L& OE 2,77,000
Total Owner's Equity 1,65,000
Answer 3 a) Fuller should prepare the income and closing balance sheet monthly as he will need to pay monthly EMI amount. Answer 4 a) Appreciation of the warehouse b) He should know the EMI amount, the depreciating amount for the fixed assets c) Monthly wages of the two workers and one driver. d)Cost of the supplies and parts to keep the business running e) Incase new inventory is needed to replace the completely depreciated asset or break down beyond repair, the purchase cost of replacement machinery should be in account Case 2-2 Music Mart, Inc
Cash Inventory A/R Pre paid insurance Land RE Paid in Capital Notes payable Creditors or A/p Page 43 for Jan 4 33250 4500 250 25000 12500 T1 5000 5000 T2 2300 -1500 800 T3 -1700 2620 920 T4 -1224 1224 T5 -6000 24000 18000 T6 3000 -12000 -9000 T7 0 0 0 0 0 0 0 T8 -1000 -1000 T9 -750 -750 T10 0 0 0 0 0 0 0 T11 -6000 -6000 T12 1310 -850 460 Transaction total 25636 4700 2620 1224 12000 46180 680 25000 6500 14000 46180
Therefore, Balance sheet on 4 January is Assets Liabilities and OE Current assets Liabilities Cash 25636 Notes Payable 6500 Inventory 4700 Account payable 14000 Account Receivable 2620 Total current asset (A) 32956 Total Liability 20500 Fixed assets OE Pre paid insurance 1224 Paid in capital 25000 Land 12000 Retained Earnings 680 Total Fixed asset (B) 13224 Total Owner's Equity 1,65,000