comprehensive example answers_2011

7/31/2019 Comprehensive Example Answers_2011

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Session 1, 2011 AFM1A 1

THE UNIVERSITY OF

NEW SOUTH WALES

School of Accounting

ACCT 1501: Accounting and Financial Management1A

Weeks 4 6

APPENDIX: COMPREHENSIVE CLASSEXAMPLE PIANO TUNING SERVICES LTD

Adapted from Hoggett, Edwards and Medlin, Problem 5.7, pp. 217-8.

Student Handout

Blackboard: http://elearning.unsw.edu.au


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Alex Schubert owns Piano Tuning Service Ltd. The post-closing trial balance at 30June 2009 is shown below.

Account

Account

number Debit CreditCash at bank A1 3 280Accounts receivable A2 3 880Prepaid insurance A3 190Supplies A4 210Motor vehicle A5 21 400Accumulated depreciation motorvehicle

A5.1 8 026

Accounts payable L1 1 940Interest payable L2 440Bank loan L3 7 000

Share capital SE1 11 000Retained profits SE2 554 $28 960 $28 960

The Chart of Accounts is shown below:

Account

Account

number Account

Account

number

Cash at bank A1 Retained earnings SE2Accounts receivable A2 Profit and loss

summary

SE3

Prepaid insurance A3 Piano tuning fees R1Supplies A4 Piano repair fees R2Motor vehicle A5 Petrol and oil expense E1Accumulated depreciation motor vehicle A5.1

Depreciation expense motor vehicle E2

Accounts payable L1 Supplies expense E3Interest Payable L2 Insurance expense E4Bank loan L3 Telephone expense E5Telephone expense payable L4 Interest expense E6Share capital SE1

Transactions completed during the year ended 30 June 2010 are summarised below:1. Tuning fees of $28 600 were receivable during the year; $23 940 of this total

was received in cash. The remainder consisted of transactions on credit.2. Revenue from piano repairs was $24 380. Cash received totalled $16 800, and

accounts receivable increased by $7 580.3. Supplies costing $340 were purchased during the year on credit.4. On 1 January 2010, Piano Tuning Service Ltd paid $3 000 off the bank loan,

plus interest of $860. The interest payment consisted of $440 accrued up to 1July 2009 and a further $420 which accrued for the period to 31 December2009.

5. Petrol and oil for the vehicle cost $ 2680 in cash.6. Insurance on the vehicle, paid in advance was $840.


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7. Telephone expense of $2 240 was paid.8. Accounts receivable of $13 900 were collected, and $2 000 was paid on

accounts payable.

The following information relating to adjusting entries is available at the end of June

2010.9. A physical count showed supplies costing $180 on hand at 30 June 2010.10.Accrued interest on the bank loan is $240.11.Insurance costing $820 expired during the year.12.Depreciation on the vehicle is $5 350.13.The June telephone account for $180 has not been paid or recorded.

Required:A. Prepare transaction analysis using excel sheet.B. Prepare journal entries to record the transactions completed in the year to 30

June 2010.

C. Open ledger accounts for each of the accounts, and post the journal entries tothe ledger.

D. Prepare a 10-column worksheet.E. Prepare an adjusted trial balance as at 30 June 2010.F. Prepare and post the closing entries.G. Prepare a post-closing trial balance as at 30 June 2010.H. Prepare the Financial Statements.


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TRANSACTION ANALYSIS

Cash Accounts

receivable

Prepaid

insurance

Supplies Motor

vehicle

Accumulated

depreciation

Accounts

payable

Interest

payable

Telephone

expense payablO/B 3280 3880 190 210 21400 8026 1940 440 1 23940 4660 2 16800 7580 3 340 3404

-3860 -440 5 -2680 6 -840 8407

-2240 8a 13900 -139008b -2000 -20009

-370 10

240 11

-820 12

5350 13

18C/B 46300 2220 210 180 21400 13376 280 240 18


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JOURNALSAC Debit Credit

1 CashAccounts Receivable

Piano Tuning Fees

A1A2R1

23 9404 660

28 600

2 CashAccounts Receivable

Piano Repair Fees

A1A2R2

16 8007 580

24 380

3 SuppliesAccounts Payable

A4L1

340340

4 Bank LoanInterest Payable

Interest ExpenseCash

L3L2

E6A1

3 000440

4203 860

5 Petrol and Oil Expense

CashE1A1

2 6802 680

6 Prepaid InsuranceCash

A3A1

840840

7 Telephone ExpenseCash

E5A1

2 2402 240

8a CashAccounts Receivable

A1A2

13 90013 900

8b Accounts PayableCash

L1A1

2 0002 000

9 Supplies ExpenseSupplies

E3A4

370370

10 Interest ExpenseInterest Payable

E6L2

240240

11 Insurance ExpensePrepaid Insurance

E4A3

820820


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12 Depreciation Expense MVAccumulated Depreciation MV

E2A5.1

5 3505 350

13 Telephone ExpenseTelephone Expense Payable

E5L4

180180


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LEDGERS

Cash at bank A1Opening Balance 3 280 Bank Loan 3 000Piano Tuning Fees 23 940 Interest Payable 440Piano Repair Fees 16 800 Interest Expense 420

Accounts Receivable 13 900 Petrol and Oil Expense 2 680Prepaid Insurance 840Telephone Expense 2 240Accounts Payable 2 000Closing Balance 46 300

$57 920 $57 920

Opening Balance 46 300

Accounts receivable A2Opening Balance 3 880 Cash 13 900Piano Tuning Fees 4 660 Closing Balance 2 220Piano Repair Fees 7 580

$16 120 $16 120


Prepaid insurance A3Opening Balance 190 Insurance Expense 820Cash 840 Closing Balance 210

$1 030 $1 030

Opening Balance 210

Supplies A4Opening Balance 210 Supplies Expense 370

Accounts Payable 340 Closing Balance 180$550 $550

Opening Balance 180

Motor vehicle A5Opening Balance 21 400 Closing Balance 21 400


Accumulated depreciation motor vehicle A5.1Opening Balance 8 026

Closing Balance 13 376 Depreciation Exp 5 350

$13 376


Accounts Payable L1Cash 2 000 Opening Balance 1 940Closing Balance 280 Supplies 340

$2 280 $2 280

Opening Balance 280


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Interest Payable L2Cash 440 Opening Balance 440Closing Balance 240 Interest Expense 240

$680 $680

Opening Balance 240

Bank loan L3Cash 3 000 Opening Balance 7 000Closing Balance 4 000

$7 000 $7 000


Telephone expense payable L4Closing Balance 180 Telephone Expense 180

Opening Balance 180

Share capital SE1Closing Balance 11 000 Opening Balance $11 000

Opening Balance 11000

Retained earnings SE2Closing Balance 41 234 Opening Balance 554

Profit and LossSummary 40 680

$41 234


Profit and Loss Summary SE3Expenses 12 300 Revenues 52 980Retained Earnings 40 680

$52 980 $52 980

Piano tuning fees R1P/L Summary 28 600 Cash / Accounts Rec 28 600

Piano repair fees R2P/L Summary 24 380 Cash / Accounts Rec 24 380


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Petrol and oil expense E1Cash 2 680 P/L Summary 2 680

Depreciation expense motor vehicle E2Acc Depn 5 350 P/L Summary 5 350

Supplies expense E3Supplies 370 P/L Summary 370

Insurance expense E4Prepaid Insurance 820 P/L Summary 820

Telephone expense E5Cash 2 240 P/L Summary 2 420Telephone Ex Pay 180

$2 420 $2 420

Interest expense E6Cash 420 P/L Summary 660Interest Payable 240

$660 $660


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WORKSHEET

Piano Tuning Service Ltd Worksheet

Adjusted

Trial Balance Adjustments Trial Balance P

Acc.

Co. Account Name Debit Credit Debit Credit Debit Credit D

A1 Cash at bank 46 300 46 300

A2 Accounts receivable 2 220 2 220

A3 Prepaid insurance 1 030 820 210

A4 Supplies 550 370 180

A5 Motor vehicle 21 400 21 400

A5.1 Accumulated depreciation MV 8 026 5 350 13 376

L1 Accounts payable 280 280

L2 Interest payable 240 240

L3 Bank loan 4 000 4 000

L4 Telephone expense payable 180 180

SE1 Share capital 11 000 11 000

SE2 Retained earnings 554 554

SE3 Profit and loss summary

R1 Piano tuning fees 28 600 28 600

R2 Piano repair fees 24 380 24 380

E1 Petrol and oil expense 2 680 2 680 2

E2 Depreciation expense MV 5 350 5 350 5

E3 Supplies expense 370 370

E4 Insurance expense 820 820

E5 Telephone expense 2 240 180 2 420 2E6 Interest expense 420 240 660

$76 840 $76 840 $6 960 $6 960 $82610 $82610

NET PROFIT (LOSS) 40


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PRE-CLOSING TRIAL BALANCE

Account

Account

code Debit Credit

Cash at bank A1 46 300Accounts receivable A2 2 220Prepaid insurance A3 210Supplies A4 180Motor vehicle A5 21 400Accumulated depreciation motorvehicle

A5.1 13 376

Accounts payable L1 280Interest payable L2 240Bank loan L3 4 000Telephone expense payable L4 180Share capital SE1 11 000Retained earnings SE2 554Piano tuning fees R1 28 600Piano repair fees R2 24 380Petrol and oil expense E1 2 680Depreciation expense motor vehicle E2 5 350Supplies expense E3 370Insurance expense E4 820Telephone expense E5 2 420Interest expense E6 660

$82 610 $82 610

CLOSING ENTRIESPR Debit Credit

1 Piano Tuning FeesPiano Repair Fees

Profit and Loss Summary

R1R2

SE3

28 60024 380

52 980

2 Profit and Loss SummaryPetrol and Oil Expense

Depreciation Expense MVSupplies ExpenseInsurance ExpenseTelephone ExpenseInterest Expense

SE3E1

E2E3E4E5E6

12 3002 680

5 350370820

2 420660

3 Profit and Loss SummaryRetained Earnings

SE3SE2

40 68040 680


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POST-CLOSING TRIAL BALANCE

Account

Account

code Debit Credit

Cash at bank A1 46 300Accounts receivable A2 2 220Prepaid insurance A3 210Supplies A4 180Motor vehicle A5 21 400Accumulated depreciation motorvehicle

A5.1 13 376

Accounts payable L1 280Interest payable L2 240Bank loan L3 4 000Telephone expense payable L4 180Share capital SE1 11 000Retained earnings SE2 41 234 $70 310 $70 310

FINANCIAL STATEMENTS

PIANO SERVICE TUNING LTDPROFIT AND LOSS STATEMENT

for Year Ending 30 June 2010

RevenuePiano tuning fees 28 600

Piano repair fees 24 380

GROSS PROFIT 52 980

ExpensesPetrol and oil expenses 2 680

Depreciation expense motor vehicle 5 350

Supplies expense 370

Insurance expense 820

Telephone Expense 2 420

Interest Expense 660 12 300

NET PROFIT/LOSS $40 680


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PIANO SERVICE TUNING LTDBALANCE SHEET

as at 30 June 2010

Current AssetsCash at bank 46 300

Accounts receivable 2 220

Prepaid insurance 210

Supplies 180 48 910

Non-current Assets Motor vehicle 21 400

Accumulated depreciation motor vehicle 13 376 8 024 8 024

TOTAL ASSETS 56 934

Current LiabilitiesAccounts payable 280

Interest payable 240

Telephone expense payable 180 700

Non-current Liabilities

Bank loan 4 000 4 000

TOTAL LIABILITIES 4 700

Shareholders Equity

Share capital 11 000

Retained profits 41 234

TOTAL SHAREHOLDERS EQUITY 52 234

TOTAL LIABILITIES AND SHAREHOLDERS

EQUTIY

56 934

comprehensive example answers_2011

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