Question 1Mark Davies has started a lawn mowing business (MD
\nLawnmowing) as a temporary job\/business which he intends to run until he starts
\nhis business degree at the University of South Australia in four months.Mark
\nhas never owned or run a business before. To start the business on 1 March
\n2014, he deposited $2,400 into a new bank account opened in the name of the
\nbusiness. The $2,400 consisted of a $2000 loan from his father and $400 of his
\nown money. Mark rented some equipment, purchased supplies, and hired friends to
\nmow and trim his customer\u00e2\u0080\u0099s lawns.At the end of each month Marksent invoices to his customers.
\nOn 30thJune, he was ready to dissolve the business and start hisuniversity
\nstudies. As he was so busy, he kept few records other than his cheque book and
\na list of amounts owed to him by customers.At 30June, Mark\u00e2\u0080\u0099s business account cheque book shows a
\nbalance of $1,900, and his customers still owe him $500. During the period, he
\ncollected $4,800 from customers. His cheque book lists payments for supplies
\ntotalling $510, and he still has fuel and supplies that cost a total of $65 on
\nhand. He paid his employees $2,000, and he still owes them $400 for their final
\nweek of work.Mark rented some equipment from Kennard\u00e2\u0080\u0099s Hire. On 1 April,
\nhe signed a six-month rental agreement on lawnmowers and paid $720 for the full
\nperiod. Kennard\u00e2\u0080\u0099s Hire will refund the unused portion of the prepayment if the
\nequipment is in good order when he returns it. In order to get the refund, Mark
\nhas kept the equipment in excellent condition. In fact during May paid $250 to
\nrepair one of the mowers.To transport employees and equipment to jobs, Mark used a
\ntrailer that he bought for $660. He believes that the period\u00e2\u0080\u0099s work used up
\none-third of the trailer\u00e2\u0080\u0099s service potential. The business cheque book lists a
\npayment of $660 for private cash withdrawals by Mark during the period. In
\nJuneMark paid back a quarter of the amounthis father had lent to him.Mark estimates that he spent approximately 80 hours working
\non the business during the period. He plans to recommence operations on a
\nsimilar basis during major breaks in his university study and believes he will
\ndo better in later periods as he now has an existing customer base to work
\nfrom.Required1. Prepare the business Income Statement for the period.(9 marks)2. Prepare the classified Balance Sheet at the end of the
\nperiod.(11 marks)3. Was Mark\u00e2\u0080\u0099s venture successful?Give the reasons for your
\nanswer. 150 \u00e2\u0080\u0093 250 words only.(5 marks)Total for Question 1: 25 marksQuestion 2Harry Smith is confused about the depreciation expense in
\nthe accounts for his shop, Kaiken, and would like you to explain the following
\nto him:i) Why is depreciation charged against the income statement
\nfor the display shelving even though Harry believes the shelving is worth more
\nnow than when he bought it just over two years ago?[3 marks]ii) Harry is considering closing the shop in two years time
\nand retiring. If Harry decides to go ahead with this decision can he still
\ncharge the same amount of depreciation expense for the shop shelving as has
\nbeen done so in the past? Use the Going Concern Assumption in answering Harry\u00e2\u0080\u0099s
\nquestion.[4 marks]iii) If Kaiken makes a loss in any year Harry wants to know
\nif he still has to include depreciation expense in the income statement?[3 marks]Total for Question 2: 10 marksQuestion 3Mark Thompson submits to you draft accounts for the year
\nended 30 June 2014, and a Balance Sheet as at that date. Towards the end of the
\nfinancial year his accountant resigned and he had completed the records
\nhimself. He thinks that errors may have occurred and asks for your help. An
\nexamination of the accounting records reveals the following:http:\/\/edugen.wileyplus.com\/edugen\/courses\/crs6167\/common\/art\/pixel.gifA.Rent expense for the premisesincludes $660 for July and
\nAugust.http:\/\/edugen.wileyplus.com\/edugen\/courses\/crs6167\/common\/art\/pixel.gifB.A payment of $1,750 for new office furniture has been
\nincorrectly debited to the advertising expense account. The furniture had been
\npurchased on 30 June 2014.http:\/\/edugen.wileyplus.com\/edugen\/courses\/crs6167\/common\/art\/pixel.gifC.Commission due to sales representatives for the month of
\nJune, $2,000, has been not been paid or recorded.http:\/\/edugen.wileyplus.com\/edugen\/courses\/crs6167\/common\/art\/pixel.gifD.Repairs to Mark’s private motor vehicle, $750, have been
\ndebited to the vehicle expense account.http:\/\/edugen.wileyplus.com\/edugen\/courses\/crs6167\/common\/art\/pixel.gifE.The unearned revenue account includes an amount of $350 for
\nservices provided during June.http:\/\/edugen.wileyplus.com\/edugen\/courses\/crs6167\/common\/art\/pixel.gifF.A fire insurance policy covering buildings was taken out on
\n01 April 2014, the annual premium of $960was paid in advance on this date and
\ndebited to the Insuranceexpense account.http:\/\/edugen.wileyplus.com\/edugen\/courses\/crs6167\/common\/art\/pixel.gifG.Interest of $960 on the loan held by the business was due,
\nbut has not been recorded or paid.http:\/\/edugen.wileyplus.com\/edugen\/courses\/crs6167\/common\/art\/pixel.gifH.No depreciation has been recognised for the year ending 30
\nJune 2014. The draft Balance Sheet shows the following:Buildings (at cost)$120,000Less Accumulated Depreciation32,000$88,000Office Furniture & Equipment (at cost)20,000Less Accumulated Depreciation8,00012,000These amounts do not include any of thetransactions listed above.Annual depreciation is to be calculated as follows:<\/p>\n","protected":false},"excerpt":{"rendered":"
Question 1Mark Davies has started a lawn mowing business (MD Lawnmowing) as a temporary job\/business which he intends to run until he starts his business degree at the University of South Australia in four months.Mark has never owned or run a business before. To start the business on 1 March 2014, he deposited $2,400 into […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6159,6156,6158,6157,6154,6149,868,6148,6153,6155,6150,6152,6151],"tags":[6164,618,3782,6161,6165,6166,6160,6168,6167,6162,6163,3293,6169],"class_list":["post-14583","post","type-post","status-publish","format-standard","hentry","category-ae-essays","category-dissertation-homework","category-essay-assessment-brief","category-free-essay-examples-research-topic-ideas","category-in-1050-word-essay","category-in-a-page-paper-assignment","category-native-assignment-help","category-new-assignment-help-aus","category-uk-homework-study-bay-assignment-homework-help-homework-answers","category-uk-writings","category-us","category-write-my-essay-today-in-hours","category-6151","tag-assignment-write-a-page-essay-in-apa","tag-australia-essays","tag-bishops-writing-bureau","tag-help-for-assignment-master","tag-help-writing-week-discussion-post-responses","tag-instant-assignment-help","tag-masters-essay-service","tag-module-week-2-assignment","tag-online-assignment-prime-essays","tag-research-essay-pro-papers","tag-the-student-help-line-australia","tag-tropicalessays","tag-us-essays"],"_links":{"self":[{"href":"https:\/\/www.colapapers.com\/essays\/wp-json\/wp\/v2\/posts\/14583","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.colapapers.com\/essays\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.colapapers.com\/essays\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.colapapers.com\/essays\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.colapapers.com\/essays\/wp-json\/wp\/v2\/comments?post=14583"}],"version-history":[{"count":0,"href":"https:\/\/www.colapapers.com\/essays\/wp-json\/wp\/v2\/posts\/14583\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.colapapers.com\/essays\/wp-json\/wp\/v2\/media?parent=14583"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.colapapers.com\/essays\/wp-json\/wp\/v2\/categories?post=14583"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.colapapers.com\/essays\/wp-json\/wp\/v2\/tags?post=14583"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}