Required a. State two uses of the control accounts b. Use the above data to determine the opening owners' equity c. Prepare the relevant working papers leading to the Trial Balance for 2020

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Question One
The Morning Mist is a trader that has not maintained double entry accounting practices.
The firm has provided the following accounting details for 2020
a. Summarized Cashbook
Receipt from debtors
Cash Sales
Investment income
Disposal of equipment
Bal c/d
b. List of Balances
DETAILS
Wages prepaid
Investment income owing
Stock
Creditors
Equipment (Book value)
Machinery (Book value)
280,000
210,000
70,000
30,000
85,000
10% Loan
Utilities Owing
675,000
Motor vehicle (Book value)
Debtors
Office expenses owing
Insurance Prepaid
Jan. 01
Bal b/d
Office expense
Wages
Utilities
Loan repayment
Payment to creditors
Insurance
Loan interest
Cash Purchases
Equipment
12,000
22,000
45,000
20,000
300,000
180,000
185,000
32,000
7,000
3,000
360,000
15,000
Dec. 31
15,000
35,000
50,000
28,000
490,000
160,000
178,000
35,000
11,000
7,000
300,000
22,500
60,000
20,000
85,000
40,000
60,000
35,000
35,000
30,000
60,000
250,000
675,000
Transcribed Image Text:Question One The Morning Mist is a trader that has not maintained double entry accounting practices. The firm has provided the following accounting details for 2020 a. Summarized Cashbook Receipt from debtors Cash Sales Investment income Disposal of equipment Bal c/d b. List of Balances DETAILS Wages prepaid Investment income owing Stock Creditors Equipment (Book value) Machinery (Book value) 280,000 210,000 70,000 30,000 85,000 10% Loan Utilities Owing 675,000 Motor vehicle (Book value) Debtors Office expenses owing Insurance Prepaid Jan. 01 Bal b/d Office expense Wages Utilities Loan repayment Payment to creditors Insurance Loan interest Cash Purchases Equipment 12,000 22,000 45,000 20,000 300,000 180,000 185,000 32,000 7,000 3,000 360,000 15,000 Dec. 31 15,000 35,000 50,000 28,000 490,000 160,000 178,000 35,000 11,000 7,000 300,000 22,500 60,000 20,000 85,000 40,000 60,000 35,000 35,000 30,000 60,000 250,000 675,000
c. Additional Notes
During the year bad debts amounting to 5,000 was written off
- Discounts of 7,000 was received from suppliers
The equipment that was disposed of had a book value of 45,000
During the year there were stock drawings amounting to 12,000
-
Required
a.
State two uses of the control accounts
b. Use the above data to determine the opening owners' equity
c. Prepare the relevant working papers leading to the Trial Balance for 2020
Transcribed Image Text:c. Additional Notes During the year bad debts amounting to 5,000 was written off - Discounts of 7,000 was received from suppliers The equipment that was disposed of had a book value of 45,000 During the year there were stock drawings amounting to 12,000 - Required a. State two uses of the control accounts b. Use the above data to determine the opening owners' equity c. Prepare the relevant working papers leading to the Trial Balance for 2020
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