2 hours assignment

a. Your late uncle Dr Acula has left you 100,000 Vampire Dollars to set up a business selling upcycled musical coffins, which are becoming very popular in your home country. Grow your business and develop your financial competence until you eventually list your business on the Transylvanian Stock Exchange.

Record following business transactions occur in December 2019 (Debit and Credit), including the impact on accounting equation on 31 December 2019 (8 marks).

01/12/2019, paid rent of $18,000 for the next three months of your business

02/12/2019, your business bought 18 units of cello coffin at $3,400 each for cash.

Your customer ordered 13 units of cello coffin at the selling price of $6,000 each and paid 20% deposit on 15/12/2019, your business will delivery all coffins on 30/12/2019.

You have employed 4 staffs at $3,100 each per month, paid in arrears. The business normally pays wages fortnightly. On 23/12/2019, you paid your staff for the work they have done up till 19 December.

30/12/2019, the customer received 13 units of cello coffin at the selling price of $6,000 each and each cello coffin costs $3,400. He is going to pay the remaining in January.

31/12/2019, the accountant needs to do relevant adjusting journal entries.

b. Cash flow statement is different from the income statement. Explain how net cash flows differs from profit reflected in the income statement? Provide a specific example. (2 marks)