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Jayne O?Rourke-Jayne O?Rourke ? Architect, commenced business as a sole trader on 1st April 2014.

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Question;Preparation and presentation of Financial StatementsJayne O?Rourke ? Architect, commenced business as a sole trader on 1st April 2014. Opening balances of the businesses accounts on 1st May 2014 were: Account Balance Cash $3,890 Accounts Receivable 6,600 Office supplies 3,120 Office Equipment 9,400 Account Payable 210 Bank Loan, 7,000 Equity 15,800 The following transactions occurred during May 2014: May 1 O?Rourke invested $15,000 cash in the business 1 Purchased insurance policy for $1,200 for one year?s cover of office equipment 3 Paid $1,000 cash for May and June rent of premises 5 Purchases office supplies costing $249 on credit (on account) 10 O?Rourke withdrew $500 cash from the business for personal use 15 Revenue of $1,530 cash and $64 credit earned 18 Paid supplier of office supplies $249 19 Paid advertising expense for June for $190 24 Paid salaries of $4,000 28 Received cash of $280 for work to be performed in June 2014 29 Revenue of $1,325 cash and $55 credit earned 30 Paid telephone expense of $64 cash Additional end of month information for Jayne O?Rourke ? Architect: 1. O?Rourke uses the allowance of doubtful debts method to account for bad debts, the percentage of credit sales method is used to estimate the amount that will be uncollected, O?Rourke applies a rate of 2% on the outstanding balance of the debtors account at month end. 2. Interest expense of $350 has accrued at the end of the month on the bank loan. 3. A bill for Internet use of $430 has not been paid. 4. Salaries accrued for the last 4 days of May amount to $920. 5. Of the office equipment insurance, at the end of May one month?s insurance has been used. Required: (a) Complete a worksheet for the month of May for Jayne O?Rourke ? Architect, including any final adjustments (40 marks). (b) Prepare the statement of comprehensive income and the balance sheet for the month of May, 2014 (10 marks). Book Bazley, M && Hancock, P;Contemporary Accounting (8th edition) Cengage Learning Australia Pty Ltd ISBN 978 0 17

 

Paper#42665 | Written in 18-Jul-2015

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