XYZcom is a startup that builds high end BBQs for the consumer market. They commence operations (rather conveniently) on the first of July.
1 On the first of July they buy the equipment they need to produce their range of BBQs. The equipment they purchase is:
? BBQ stamping machine for $220,000
? BBQ Seam welder for $25,000
2 The effective life of the equipment is 10 years.?Create a table or other tool you can use as an asset register. Calculate the depreciation for the first year and include it in your asset register.?This equipment can be entered in the asset register using the ID numbers PR001 and PR002.
3 XYZcom pays $4,800 for 12 months insurance in July. Rather than recording the whole amount against July's expenses, it wishes to show the expense equally across the periods for which it paid the premium. In other words, rather than showing a $4,800 expense for July it wishes to use prepayments to show a $400 expense in all months.?Show the general journal transactions for July. The general journal transaction number is GL7, the insurance account is 6010, and the prepaid insurance 1945. The transaction is processed on the 31st July.
4 One of XYZcom's account customers, JZ House and Garden, has gone broke, owing XYZcom $5,700. Prepare a worksheet showing the appropriate journal or ledger entries to write off the debt. Use the docket number JZ345, move the debt into bad debts in April and finalise the transactions on the 31st July. Before the write off, profit is 275,300.00. At the time of write off, theirs is the only receivable and afterwards the only bad debt.
5 XYZcom, being a startup, had a zero beginning inventory. They spent $425,000 on inventory items, receiving $12,000 for prompt payment and paying $10,000 for freight. Their closing inventory is $84,000. Determine the cost of goods sold and the closing entries for a periodic inventory.
6 Prepare an income statement using your calculations. Show gross profit and net income. You will need the following information:
? Sales were $1,375,000.00
? Administrative and sales expenses $225,000.00
? Interest on debt is $97,000.00
? Tax paid at 30%
7 At the end of the period, XYZcom has the following account balances:
? Cash 550,000
? Accounts receivable 117,000
? Inventory 84,000
? Prepaid expenses 4,800
? Equipment 245,000
? Depreciation 49,000
Accounts payable 125,000
8 Loans payable 361,300
9 Net Profit 465,500
Prepare a trial balance using these amounts