Principles of Accounting
BAP 11
Assignment 2, 2013
Semester 2
Class Day/Time: ________________
Due Date: Week 11 Friday
Time: 5 PM
Weight: 15%
This is an individual assignment.
The assignment consists of 5 questions all of which are to be attempted. Each question is worth 15 marks.
Question 1.
The following questions are required to be answered relate to the course text
Questions
a) Statement of Cash flows direct method Chapter 18 ;
Required
i. Prepare a cash flow statement using the direct method for operating cash flows
ii. Prepare a reconciliation of the [profit and cash provided by the operations
b) Bank reconciliation
Note: Cheque no 216 was also incorrectly posted to the general ledger.
Required prepare a bank reconciliation for the Month ended the 31 March
c) Accounting for Shares
Demons Ltd issued a prospectus for the issue of 100,000 $5.00 shares on 1 January2012.The prospectus required payment of $3.00 per share on application and $2.00 to be paid when called.
The company received applications for 120,000 shares by the closing date of 28February 2012.100,000 shares were issued on 1 March 2012 with excess application money being refunded.
On 30 April 2012 the company called the balance of $2.00 on the shares. All call money was received by 15 May 2012.On 30 June 2012 Demons Ltd declared and paid a dividend of 5 cents per share.
Required:
Prepare the journal entries for the year ended 30 June 2012 to account for the above transactions.
d) Accounting for Liabilities
Easy Company Ltd issues a debenture at a premium for a period of 10 years the company pays interest on 31 December and 1 July. The debenture has a par value of $1,000,000.00 and is issued at premium of 105 at an interest rate of 9%
Prepare journal entries to reflect the following;
i. issue of debentures on 1-Jul
ii. payment of interest on 1 January
iii. accrual on 31 March
e) Accounting for Inventory