Question 1
The accountant for George St Hairdressing has compiled the following information about the company and its accounts for the year ended 31 December 2016:
|
Cash
|
$30,000
|
Prepaid Rent
|
$2,000
|
|
Revenues
|
99,000
|
Expenses
|
54,000
|
|
Accounts Payable
|
9,000
|
Equipment
|
40,000
|
|
Wages Payable
|
1,000
|
Loan Payable
|
4,000
|
|
Accounts receivable
|
1,000
|
|
|
(a) What is the total amount of assets belonging to the business?
(b) What is the total amount that business owes for liabilities?
(c) Using the accounting equation, what is the amount of Owners' Equity reported on the business balance sheet?
(d) How much net profit or loss did the business earn in the year?
Question 2
An accountant provided data for a small manufacturing business, trading under the name Regional Farm Equipment Pty Ltd. The following list of financial data relates to the business as at 31 December 2016.
|
Inventories
Motor Vehicles (net) Cash
Prepaid insurance Fuel supplies Accounts receivable
|
$125,000
75,000
35,000
1,500
9,000
10,000
|
Plant & equipment (net)
Accounts payable Salaries payable Loan Payable Contributed capital Retained profits
|
$200, 000
25,000
2,500
160,000
155, 000
|
Additional information
20% of the figure for loan payable is payable within 12 months of 30 June.
Required
- Prepare a fully classified balance sheet for the business as at 31 December 2016. (15 marks)
Question 3
Review the CPA and ICANZ websites (links below) and write a short essay quoting three recent examples (2016 and 2017 only) to demonstrate how breaches of ethical standards were seriously treated by the professional organisation.
Required:
1. Explain why the penalties were imposed
2. Referring to APES 110 standards (available on Moodle), which sections should have applied to your three mentioned examples?
3. Were the penalties imposed by the accounting bodies sufficient?
Note: Your essay should not exceed 500 words. Recent examples should be limited to between 2016 and 2017.