Updated Assignment 5-7
jen99
Draft.docxPart a
Adjusting entries.
1. Entry to record delivery truck as asset, rather than as expense.
Dr. Delivery Truck – vehicle $10,000
Cr. Vehicle Expenses $10,000
2. Entry to record increase in accrued utilities expense
Dr. Utilities expense $1,500
Cr. Utilities payable $1,500
3. Recording of insurance claim
Dr. Insurance claim $9,200
Cr. Deductible claim expense $800
Cr. Cash $10,000
4. Loan Payment
Dr. Notes payable $5,000
Cr. Cash $5,000
5. Interest payment due
Dr. Interest expense $1,200
Cr. Interest payable $1,200
6. Interest payable at closing
Dr. Interest expense $300
Cr. Interest payable $300
7. Audit fees
Dr. Audit fees expense $25,000
Cr. Audit fees payable $25,000
8. Consultancy fees payable
Dr. Consultancy fees expense $20,000
Cr. Consultancy fees payable $20,000
9. Inventory bought
Dr. Inventory – goods in transit $1,500
Cr. Cash $1,500
10. Furniture purchase
Dr. Furniture $15,000
Cr. Inventory $15,000
11. Warehouse rent
Dr. Rent expense $2,000
Cr. Rent payable $2,000
12. Depreciation expense - Vehicle
Dr. Vehicle depreciation $2,000
Cr. Accumulated depreciation $2,000
13. Depreciation expense
Dr. Furniture Depreciation $125
Cr. Accumulated depreciation $125
14. Interest over receivable
Dr. Interest receivable $408
Cr. Interest income $408
15. Tax payment
Dr. Advance tax payment – $20,000
Cr. Cash $20,000
Adjusted Trial Balance
Part B.
To.
Jim.
Subject: Listing Requirements and impact over business
Hello Jim, I am writing you in context of the query you asked me to address regarding the listing requirements for any public traded business, which is shifting its status from private limited, and the impact over the business financial and accounting treatments.
The listing requirements are detailed and are having a lot of covenants required to be addressed by the company, which includes that the business must be having atleast $5million worth of tangible assets over balance sheet, there must be sufficient property available with the business to pursue the business activities, there must be properly formed management and board of directors to govern the business, there must be minimum $10 million in cash in treasury at the time of listing requisition, properly defined products and services which will be offered by the business.
There must be also a properly formed finance department, with a qualified CPA, with valid experience of book keeping, the business should be having authentic audited financial statements from a CPA firm, the business is annually preparing the financial statements in compliance of the applicable accounting and reporting standards.
Above these requirements there are also the bunch of other requirements which are to be fulfilled by any organization, before they apply for becoming a publically traded business.
More over the business accounting practices will be required to significantly addressed as the listing requirements include a proper compliance with the applicable accounting standards, with the accurate book keeping and maintaining correct transactions records at any time of period during the year.
If you require any further information from me, please let me know.
Thanks.
DescriptionDrCr
Cash123,500
Accounts receivable189,608
Less allowance7,200
Inventory167,500
Inventory in warehouse # 250,000
Property, plant and equipment255,000
Accumulated depreciation21,125
Vehicle leased4,000
Vehicles130,000
Accumulated depreciation 27,000
Accounts payable146,500
Accrued liabilities58,500
Notes payable45,000
Common shares235,000
Retained earnings, April 1, 2016185,000
Revenue900,608
Cost of goods sold290,000
Salaries200,000
Payroll taxes20,000
Vehicle expense4,200
Rent expense67,000
Rent expense – warehouse # 224,000
Utilities12,700
Income tax expense20,000
Bad debt expense3,600
Depreciation and amortization2,125
Other expenses62,700
TOTAL1,625,933 1,625,933
ADJUSTED TRIAL BALANCE
PYRAMID HOLDINGS
MARCH 31, 2017
$$
Assets
Cash123,500
Account receivable, Net182,408
Inventory167,500
Inventory in warehouse # 250,000
Current Assets523,408
Property, plant and equipment, Net233,875
Vehicle leased4,000
Vehicles, Net103,000
Total Assets864,283
Equity & Liabilities
Liabilities
Accounts payable146,500
Accrued liabilities
58,500
Notes payable
45,000
Total Liabilities250,000
Equity
Common shares235,000
Retained earnings, March 31, 2017379,283
Total Equity & Liabilities864,283
PYRAMID HOLDINGS
DRAFT STATEMENT OF FINANCIAL POSITION
As at MARCH 31, 2017
$$
Revenue900,608
Cost of goods sold290,000
Gross profit610,608
Expenses
Salaries200,000
Payroll taxes20,000
Vehicle expense4,200
Rent expense67,000
Rent expense – warehouse # 224,000
Utilities12,700
Income tax expense20,000
Bad debt expense3,600
Depreciation and amortization2,125
Other expenses62,700
416,325
Net Profit194,283
PYRAMID HOLDINGS
DRAFT STATEMENT OF FINANCIAL POSITION
For the year ended MARCH 31, 2017
