Given the following information, develop a beginning-of-the-year statement of fi
ID: 2403219 • Letter: G
Question
Given the following information, develop a beginning-of-the-year statement of financial position. Beginning date End date Client name January 1, December 31, 2015 Frank and Lois Beginnin Balance Ending Income/Expenses $750 $990 BalanceAmount (Yearl Section 401 (k) plan deferrals Section 401 (k) plan-Frank Section 403(b) plan deferrral:s Section 403(b) plan-Lois Auto loan Auto loan interest Auto loan principal Auto maintenance Automobile-Frank Automobile-Lois Automobile insurance premiums $0 $1,500 $0 $15,432 $990 $10,436 $381 4,996 $600 $20,000 $5,750 $18,000 $5,175 $2,124 $10,000 $15,570 $2,400 $3,600 Child support Clothing Credit card Credit card payments interest Credit card payments principal Entertainment FICA and federal income tax (W/H) Food Furniture/household Go-cart Homeowners insurance premiums Jewelry Maid/child care Mortgage on residence Mortgage payment interest Mortgage payment principal Personal residence Property tax (prindpal residence) Reinvestment in savings account/trust Salary-Frank Salary-Lois Savings Savings account/trust fund interest Trust fund Tuition and education expenses Utilities $10,870 $10,417 $1,707 $453 $4,200 $11,449 $4,800 $36,000 $34,000 $0 $6,000 $72,960 $1,200 $6,100 $72,164 $534 $4,800 $5,808 $796 $85,000 $89,250 $850 $5,675 $25,000 $33,000 $13,500 $14,175 $5,675 $100,00 $105,000 $2,893 $2,100Explanation / Answer
PPE
$
Explanation
Opening balance
100
Debit balance
Deprecation
(20)
Deprecation reduces the carrying amount of the PPE without being a cash flow. The double entry for depreciation is a debit to statement of profit or loss to reflect the expense and to credit the asset to reflect its consumption.
Revaluation surplus
60
The revaluation gain increases PPE without being a cash flow. The double entry is a credit to the revaluation surplus to reflect the gain and to debit the asset to reflect its increase
Disposal
(15)
The carrying amount of the PPE that has been disposed of reduces the PPE thus a credit to the asset account which is then posted as a debit in the disposals account
Sub-total
125
This sub-total represents the balance of the PPE if no PPE had been bought for cash
Cash flow – the payment to buy PPE
175
This is the last figure written in the reconciliation This balancing figure explains why the actual PPE at the reporting date is greater than the sub-total
Closing balance
300
PPE
$
Explanation
Opening balance
100
Debit balance
Deprecation
(20)
Deprecation reduces the carrying amount of the PPE without being a cash flow. The double entry for depreciation is a debit to statement of profit or loss to reflect the expense and to credit the asset to reflect its consumption.
Revaluation surplus
60
The revaluation gain increases PPE without being a cash flow. The double entry is a credit to the revaluation surplus to reflect the gain and to debit the asset to reflect its increase
Disposal
(15)
The carrying amount of the PPE that has been disposed of reduces the PPE thus a credit to the asset account which is then posted as a debit in the disposals account
_____Sub-total
125
This sub-total represents the balance of the PPE if no PPE had been bought for cash
Cash flow – the payment to buy PPE
175
This is the last figure written in the reconciliation This balancing figure explains why the actual PPE at the reporting date is greater than the sub-total
_____Closing balance
300
_____Related Questions
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