Question 1.
The following questions are required to be answered relate to the course text
Questions
a) Statement of Cash flows direct method Chapter 18 ;
Required
i. Prepare a cash flow statement using the direct method for operating cash flows
ii. Prepare a reconciliation of the profit and cash provided by the operations
b) Bank reconciliation
Required prepare a bank reconciliation for the Month ended the 31 March 2001
c) Accounting for Shares
Demons Ltd issued a prospectus for the issue of 100,000 $5.00 shares on 1 January2012.The prospectus required payment of $3.00 per share on application and $2.00 to be paid when called.
The company received applications for 120,000 shares by the closing date of 28February 2012.100,000 shares were issued on 1 March 2012 with excess application money being refunded.
On 30 April 2012 the company called the balance of $2.00 on the shares. All call money was received by 15 May 2012.On 30 June 2012 Demons Ltd declared and paid a dividend of 5 cents per share.
Required:
Prepare the journal entries for the year ended 30 June 2012 to account for the above transactions.
d) Accounting for Liabilities
Easy Company Ltd issues a debenture at a premium for a period of 10 years the company pays interest on 31 December and 1 July. The debenture has a par value of $1,000,000.00 and is issued at premium of 105 at an interest rate of 9%
Prepare journal entries to reflect the following;
i. issue of debentures on 1-July
ii. payment of interest on 1 January
iii. accrual on 31 March
e) Accounting for Inventory
f) Analysis of Accounting Information
g) Preparation of production and cash budget 10 marks
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Budget data
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unit sales
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January
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25,000.00
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February
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30,000.00
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March
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32,000.00
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selling price
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$ 10.00
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per unit
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cash sales
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20%
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during month of sale
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Collections on account
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50%
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in month of sale
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Collections on account
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25%
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after month of sale
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Amount uncollectable
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5%
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balance on accounts receivable at 1 January
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$ 420,000.00
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Of which $350,000 relates to December sales and the remainder related to November sales
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5% of the total balance is uncollectable
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prepare sales budget for the quarter
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prepare cash collections budget for the quarter
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Calculate the balance in accounts receivable at the end of March
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