july13 Question .1 Patricia King runs a small cake house where she sells home-ma
ID: 2569134 • Letter: J
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july13
Question .1 Patricia King runs a small cake house where she sells home-made specialty cakes and displays them in a small café along the busy area of Orchard Road. As it is a small setup, Patricia tries to keep her cost low by not engaging a bookkeeper. She does the accounting of the small café all by herself During the year ended 31 December 2011, Patricia was left with a set of unadjusted trial balance at year end. The set of unadjusted trial balance is as follows: Pat's Café Trial Balance As at 31 December 2011 Debit Credit Sales Cake Supplies Inventory Purchases Bank interest expense Salary Utilities Café maintenance and cleaning Equipment - Refrigerator and Display Shop Rental Accumulated depreciation - Refrigerator and Display Accounts receivable Prepaid Insurance Accounts payable Capital as at 1st Jan 2011 Cash 8,340 1,000 800 400 2,000 1,140 700 6,000 7,100 3,000 500 1,700 1,000 12,000 24.340 24.340 3000Explanation / Answer
a. Adjusting entries:
b. Income statement:
Sl no Date Account Debit Credit 1 Dec31. 2011 cake supplies inventory 400 To Accounts payable 400 2 Dec31. 2011 Insurance expense 708 To Prepaid insurance 708 [ for 5 months= 1700*5/12] 3 Dec31. 2011 Café maintenance and cleaning 1500 Capital A/c 500 To cash 2000 4 Dec31. 2011 Accumulated depreciation 160 Loss on sale of mixer 140 Cash 500 To Equipment 800 [ Depreciation for 1 year= 800/5, balance is loss on disposal]Related Questions
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