Financial and accounting principles
Course:- Financial Accounting
Reference No.:- EM13259

Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Financial Accounting

A. Jayantha commenced business on 1 January 2010 with equity of $100,000. During the year ending 31 December 2010, he paid $92,400 for purchasing goods for sale (all of which was sold) and $31,450 for various expenses. He received $139,250 by sale of goods. Jayantha has drawn $12,000 in cash and introduced a motor car to the business valued at $10,000.

What is Jayantha's equity at 31 December 2010?

1. $115,400

2. $137,400

3. $127,400

4. $113,400

B. The following information relates to Simonson Engineering as at 30 September 2010:



Plant and machinery


Trade payables


Short-term borrowings






Long-term borrowings


Trade receivables


Equity at 1 October 2009


Cash in hand


Motor vehicles 


Fixtures and fittings


Profit for the year to 30 September 2010


Drawings for the year to 30 September 2010


Using this information, prepare a statement of financial position for the business using the standard layout illustrated in Example 2.5 on p.48 of Atrill, P., & E. McLaney, (2011) Accounting and Finance for Non-Specialists, 7th edition, Harlow: FT/Prentice Hall.

C. An accountant prepared a statement of financial position for a business. In this statement, the equity of the owner was shown next to the liabilities. This confused the owner, who argued: 'My equity is my major asset and so should be shown as an asset on the statement of financial position'. How would you explain this misunderstanding to the owner?

D. The statement of financial position shows how much a business is worth. Do you agree with this statement? Explain the reasons for your response.

E. Compute the missing amount in the accounting equation for each business.

Name of business




Hudson Gift and Cards




New Street Garage




Hair Styles




6. At the year end, the total assets of a business were $189,000 and the total liabilities were $126,000. During the year, the owner withdrew $10,000 and introduced a further $18,000 in equity. The business began the year with total assets $180,000 and total liabilities of $112,000.

What is the profit (loss) for the year?

1. $8,000 (profit)

2. $8,000 (loss)

3. $13,000 (loss)

4. $13,000 (profit)

7. A company that produces a single product provides the following information: budgeted sales of 40,000 units, margin of safety 25% of budgeted sales, total fixed costs $240,000. What is the contribution per unit of the company's product?

1. $8.00

2. $4.80

3. $24.00

4. $6.00

8. A business makes 2,000 units of a particular product. It spent $24,000 on material and it paid its operatives $40,000. Fixed costs of running the factory were $50,000. The salesforce were also paid $18,000 and the head office costs were $100,000. In order to break even the selling price per unit will have to be:

1. $116

2. $66

3. $84

4. $32

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Financial Accounting) Materials
Company A is a manufacturer with current sales of $3,500,000 and a 50% contribution margin. Its fixed costs equal $1,320,000. Company B is a consulting firm with current servi
the cost of common from retained earnings is 11.25%, and the tax rate is 40%. The firm will not be issuing any new common stock. What is Quigley’s WACC?
Each DBMS has many databases holding data, and each database is usually entirely independent of every other database. What is the hierarchy of data in database model? Please p
Last year, Silver Company's total variable production costs were $7,500, and its total fixed manufacturing overhead costs were $4,500. The company produced 3,000 units during
The returns of Stock's X, Y and Z are positively, but not perfectly, correlated. Risk-free rate is 5.2% and the market is in equilibrium (required return = expected return),
Evaluate her itemized deduction as a result of the fire. Also determine Heather's AGI and heather owns a two-story building. The building is used 60 percent for business use
During 2009, HS opened a branch office in the metropolitan area 30 kms from its principal place of business. Although this branch is not yet profitable ( as a result of comp
During October, Dorinirl Corporation incurred $66,700 of direct labor costs and $9,300 of indirect labor costs. The journal entry to record the accrual of these wages would in