You are the Owner of a Sole Proprietorship Business in the Service Industry: Principles of Accounting & Finance Report, TP, Singapore

Question 1

You are the owner of a sole proprietorship business in the service industry. Your business has been in operation for two years.

A. Complete the following information regarding your business:

B. Describe7business transactions (affecting the following accounts) that have occurred in April 2021:

* You do not need to follow the sequence as shown above.

 Example:

c. Prepare general journal entries for the transactions in part (b)

d.Calculate the following:

i)  Profit or loss for the month of April 2021.

ii)Cash at bank account balance at the end of April 2021, assuming that Cash at bank account has a credit balance of $1,000 as at 31 March 2021.

Question 2

For each situation, you are required to:

a. state whether you agree or disagree with the accounting treatment,

b. name the accounting concept or assumption that is followed or violated; and

c. if you agree, briefly explain how it has been followed or if you disagree, briefly explain what the correct treatment should be and why.

Situation 1

genius Tuition Centre installed an alarm system and paid $5,400 after getting a 10% discount from the vendor. The tuition centre recorded the alarm system at $6,000, which was the price before the discount as the owner felt that it was more accurate to do so.

situation 2

Bernard is the owner of a restaurant group.He invited family, friends and corporate clients to one of his restaurants to celebrate his wedding anniversary. At the same time, he took the opportunity to announce that his son will be the Finance Manager of the restaurant. The total cost of $15,000 for the party was recorded as business expense in the restaurant’s accounting books.

Situation 3

Fat Cat Café gained more popularity and a better imageafter being awarded two Michelin stars. The owner of the café is very pleased with the benefits gained from having the Michelin stars. He recorded the Michelin award as an asset worth $30,000in the accounting books.

Question 3. RavenFire Systems, established in 2000, sells a range of high-quality fire alarm systems. The financial year of the firm ends on 31March.

The following balances were extracted from the accounting records as at 31 March 2021:

All accounts in the ledger have normal balances.

Additional information for year-end adjustments is as follows:

• Sales revenue as at 31March 2021 included $9,700 from a client who made an advance payment for goods to be delivered in May 2021.
• One of the debtors owing $4,200 was declared bankrupt on 31March2021.
• Salaries due and unpaid at year-end amounted to $2,000.
• Advertising expense as at 31March 2021 included $9,000 paid to the advertising agency for a promotional event in June 2021.
• The firm earns a 1.5% commission income from some suppliers on the products sold. The commission earned each month is received on the 15^th of the following month. For March 2021, the commission based on sales of $15,000 has not been recorded in the books.
• Depreciation of furnitureof $1,200 is to be provided for.

Required:

a. Prepare general journal entries for the necessary adjustments as at 31March 2021. Narrations are not required.

b. Prepare the trial balance as at 31March 2021, incorporating all adjustments. Show all workings

Raven Fire Systems

Trial Balance as at 31 March 2021

c. Prepare the Profit & Loss Statement for the year ended 31 March 2021