Nina and Nita are joint owners of Classic Carpets. The business started its operation in January...

Nina and Nita are joint owners of Classic Carpets. The business started its operation in January 2019. The business sells various types of carpet and rugs to the general public. Among the types of carpets and rugs available in their business are cut pile carpet, cut and loop carpet, loop pile carpet and patterned loop carpet. They also provide carpet installation service at customer’s place and carpet cleaning service. The business transactions were done both under the credit and cash transactions between the suppliers and customers.

The business was started with RM50,000 cash from Nina and RM150,000 worth of business premise from Nita. They also took loan from bank amounting RM100,000. They assume the business will continue to operate for a foreseeable future. During the year ended 31 December 2019, the business has the following information:

RM Motor vehicles 40,000 Accounts payable 20,000 Inventory 30,000 Bank 74,000 Water and electricity 15,000 Interest on bank loan 2,000

Required:

a. i. Identify any two (2) relevant accounting concept related to the business.

(2 mark)

ii. Explain briefly the accounting concepts you have identified in (i) above.

Expert Solution

Feedback is welcomed.

ekkarill92 answered 2 years ago

A business, which started trading on 1 January 2010, adjusted its allowance for doubtful debts at...

A business, which started trading on 1 January 2010, adjusted its allowance for doubtful debts at the end of year on a percentage basis, but each year the percentage rate is adjusted in accordance with the current economic climate. The following details are available for the three years ended 31 December 2010, 2011 and 2012. Bad debts written off year to 31 December Accounts receivable at 31 December after bad debts written off Percentage allowance for doubtful debts (%) 2010...

Cascade Company was started on January 1, 2018, when it acquired $155,000 cash from the owners....

Cascade Company was started on January 1, 2018, when it acquired $155,000 cash from the owners. During 2018, the company earned cash revenues of $97,900 and incurred cash expenses of $66,100. The company also paid cash distributions of $9,500. Required Prepare a 2018 income statement, capital statement (statement of changes in equity), balance sheet, and statement of cash flows under each of the following assumptions. (Consider each assumption separately.) Cascade is a corporation. It issued 10,000 shares of $9 par...

Cascade Company was started on January 1, 2018, when it acquired $156,000 cash from the owners....

Cascade Company was started on January 1, 2018, when it acquired $156,000 cash from the owners. During 2018, the company earned cash revenues of $80,300 and incurred cash expenses of $67,500. The company also paid cash distributions of $5,500. Required Prepare a 2018 income statement, capital statement (statement of changes in equity), balance sheet, and statement of cash flows under each of the following assumptions. (Consider each assumption separately.) Cascade is a sole proprietorship owned by Carl Cascade. A) Prepare...

Question 3: Sun Consultancy provides special consultancy services to its clients. It started its operation on...

Question 3: Sun Consultancy provides special consultancy services to its clients. It started its operation on January 1, 2018. An un-adjusted trial balance as on May 31, 2018 for this firm is given below. Sun Consultancy Trial Balance As on May 31, 2018 Serial # List of Accounts Debit (Rs) Credit (Rs) 1 Cash 97,300 2 Accounts receivable 10,400 3 Office supplies 15,000 4 Prepaid insurance 12,000 5 Furniture 40,000 6 Car 50,000 7 Accumulated depreciation-car 7,600 8 Unearned revenue...

Economics, Inc. has started its operation in late 2016. At the beginning it was generating revenue...

Economics, Inc. has started its operation in late 2016. At the beginning it was generating revenue from sales commission and after it expanded its operation by providing management services. By the end of 2017 the company has hired you as independent consultant to help with comprising final balance sheet and income statement. Required: Provide ALL adjustments by the end of 2017. Fill in the worksheet. Prepare closing entries, income statement, statement of retained earnings, and balance sheet for 2017. The...

After several months of planning, Denise Murphy started a property management business for the for the properties that its owners invest called ABC Property Management (“ABC”).

After several months of planning, Denise Murphy started a property management business forthe for the properties that its owners invest called ABC Property Management (“ABC”). Thefollowing events occurred during its first month:On May 1, Murphy started the firm, investing $3,000 cash and $15,000 of equipment.On May 2, ABC paid $600 cash for furniture for the shop.On May 3, ABC paid $500 cash to rent space in a strip mall for May.On May 4, ABC purchased $1,200 of equipment on credit...

JJ&LL Manufacturing began business on January 1. During its month of operation, JJ&LL worked on four...

JJ&LL Manufacturing began business on January 1. During its month of operation, JJ&LL worked on four industrial jobs and reported the following information at month-end: Job 1 Job 2 Job 3 Job 4 Direct Materials $1,000 $4,000 $3,500 $1,800 Direct Labor 12,000 13,000 12,000 900 Applied Factory Overhead 1,500 2,500 7,500 200 Job completed: Jan 15 Jan 18 Jan 25 Not completed Job sold: Jan 23 Not sold Not sold N/A Revenues: $25,000 N/A N/A N/A What is the balance...

January 1 – On January 1, 2020, Audrey started her merchandising business and invested P10,000,000 cash...

January 1 – On January 1, 2020, Audrey started her merchandising business and invested P10,000,000 cash and two delivery trucks worth P5,000,000 with an estimated useful life of 10 years and a salvage value of P500,000 as her initial capital. January 1 – Audrey paid insurance policy for P19,000 and recorded it as prepaid insurance. January 20 – Sold goods to customers worth P2.500,000 for cash February 1 – Purchase furniture worth P250,0000 and office equipment worth P850,000 for cash,...

Auto Resales, Inc. started business on January 1, 20X1 (beginning inventory balance is zero). On January...

Auto Resales, Inc. started business on January 1, 20X1 (beginning inventory balance is zero). On January 1, 20X1 the company purchased all of the inventory for their used car sales lot. Purchase information is: Total cost of the cars purchased $1,500,000 Number of cars purchased 100 Types of cars, number of cars, and sales price per car are as follows: Number purchased Sales price per car Ford 20 $10,000 Lexus 40 $20,000 BMW 40 $25,000 Total number of lots 100...

The following information is available for the business of Greg Samuels, a bookseller maker. January Started...

The following information is available for the business of Greg Samuels, a bookseller maker. January Started business with £10,000 in business bank account Made purchase for £200 cash Further purchases from Cabbage for £400 on credit Paid rent £1000 cash Bought stationery for £60 cash Bought an old van for £4000 from Peters promising to pay later Sold rare books to Greene for £1000 cash Paid Cabbage £140 Sold book on credit to Doy for £140 Bought more stationery for...

Question