Reference no: EM131626662

Part A: 1 Question

Question 1

The following transactions occurred for McDonalds Ltd for the year ending 30 June 2016:

A. Issued additional share capital for $5000 cash
B. Received $26 800 from accounts receivable
C. Paid accrued salaries owing
D. Purchased $62 000 inventory for cash
E. Paid $16 900 to accounts payable
F. Borrowed $70 000 on 1 January at 10% interest p.a. on 30 June interest on the loan was still outstanding.
G. Purchased $39 000 inventory on credit
H. Sold inventory costing $31 200 for $82 000 cash
I. Sold inventory on credit for $153 000. Cost of inventory sold was $63 400
J. On 2 March paid $31 200 rent for the next 12 months
K. Dividends declared and paid totalled $5000
L. Paid wages expense of $35 000; on 30 June 2016 wages of $9100 had been earned but not paid
M. Interest receivable on investment is $1500
N. Depreciation on plant and equipment is calculated using straight line method at 20% p.a.
O. Received $4000 in June for services to be provided in July
P. Paid administration expenses $12 200

Required:
a. Prepare journal entries for the above transactions
b. Prepare ledgers
c. Prepare closing entries
d. Prepare a 10-cloumn worksheet
e. Prepare an Income Statement for the year ending 30 June 2016 and Balance Sheet as at 30 June 2016 for McDonalds Ltd.

Part B:

1. Describe four principles of Accounting. (Relevance, Comparability, Materiality and Conservatism).

2. Explain the difference between the periodic inventory system and the perpetual inventory system.

3. List four important users of financial accounting and describe the use that each user would make of the information.

4. What accounting profession would you like to pursue after your graduation? What is "Big Four" in Accounting? What are the functions of these "Big Four"?