Indicate the accounts that might need to be adjusted before an accurate set of finan- cial statements can be prepared. c. Why did the loan officer ask your brother whether he used the accrual basis of accounting for revenues and expenses? Why would it have been important to use this method?
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Several years ago, your brother opened Niagara Appliance Repairs. He made a small initial investment and added money from his personal bank account as needed. He withdrew money for living expenses at irregular intervals. As the business grew, he hired an assistant. He is now considering adding more employees, purchasing addi- tional service trucks, and purchasing the building he now rents. To secure funds for the expansion, your brother submitted a loan application to the bank and included the most recent financial statements (shown below) prepared from accounts maintained by a part-time bookkeeper.
Indicate the accounts that might need to be adjusted before an accurate set of finan- cial statements can be prepared. c. Why did the loan officer ask your brother whether he used the accrual basis of accounting for revenues and expenses? Why would it have been important to use this method?
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- Your bank has been operating a joint account for the Atuahene family for the past 20 years. The account is jointly owned by Mr. Atuahene, Mrs. Atuahene and their elder son Nyameyie. The withdrawal mandate taken by your bank is Mr. Atuahene and Mrs Atuahene or Nyameyie. Two years ago, Mrs. Atuahene who was nominated as the head of her family, sold some piece of the family land and deposited the proceeds into the joint account. In order to secure the money in the account, she demanded that the husband should not withdraw from the account without her approval. She however, did not inform their bankers of the new arrangement between her and the husband.Unfortunately, Mr. Atuahene on several occasions after the new agreement withdrew money from the account without his wife’s knowledge. A month ago, Mr. Atuahene died in a terrible motor accident. The wife informed their banker of the demise of her husband. She later drew a cheque with the son and presented it for payment. The bank’s teller…Your bank has been operating a joint account for the Atuahene family for the past 20 years. The account is jointly owned by Mr. Atuahene, Mrs. Atuahene and their elder son Nyameyie. The withdrawal mandate taken by your bank is Mr. Atuahene and Mrs Atuahene or Nyameyie. Two years ago, Mrs. Atuahene who was nominated as the head of her family, sold some piece of the family land and deposited the proceeds into the joint account. In order to secure the money in the account, she demanded that the husband should not withdraw from the account without her approval. She however, did not inform their bankers of the new arrangement between her and the husband.Unfortunately, Mr. Atuahene on several occasions after the new agreement withdrew money from the account without his wife’s knowledge. A month ago, Mr. Atuahene died in a terrible motor accident. The wife informed their banker of the demise of her husband. She later drew a cheque with the son and presented it for payment. The bank’s teller…Your bank has been operating a joint account for the Atuahene family for the past 20 years. The account is jointly owned by Mr. Atuahene, Mrs. Atuahene and their elder son Nyameyie. The withdrawal mandate taken by your bank is Mr. Atuahene and Mrs Atuahene or Nyameyie. Two years ago, Mrs. Atuahene who was nominated as the head of her family, sold some piece of the family land and deposited the proceeds into the joint account. In order to secure the money in the account, she demanded that the husband should not withdraw from the account without her approval. She however, did not inform their bankers of the new arrangement between her and the husband.Unfortunately, Mr. Atuahene on several occasions after the new agreement withdrew money from the account without his wife’s knowledge. A month ago, Mr. Atuahene died in a terrible motor accident. The wife informed their banker of the demise of her husband. She later drew a cheque with the son and presented it for payment. The bank’s teller…
- Upon graduation from high school, William Nitter accepted a job as a plumber's assistant for a large local plumbing company. After three years of hard work, William received a plumbing licence and decided to start his own business. He had saved $31,000, which he invested in the business. His lawyer had advised him to start as a corporation. First, he transferred the $31.000 from his savings account to a business bank account for Willam's Plumbing Services Inc. and was issued shares. He then purchased a used panel truck for $21,500 cash and second-hand tools for $3,700, rented space in a small building, inserted an advertisement in the local paper, and opened his business on July 1 of the current year. Immediately. William was very busy, after one month, he employed an assistant D Although William knew practically nothing about the financial side of the business, he realized that a number of reports were required and that expenses and collections from clients had to be controlled…Ms. Brown purchased a property consisting of one acre of land and a building for $100,000 five years ago. She obtained an $80,000 mortgage loan from ABC Bank at that time. The building was very old and Ms. Brown has just had it torn down. She now wants to build a new building. Ms. Brown hopes to finance construction with ABC Bank and will call them soon to discussfinancing the new project. How will ABC Bank evaluate the possibility of making another loan to Ms. Brown?Upon graduation from high school, William Nitter accepted a job as a plumber's assistant for a large local plumbing company. After three years of hard work, William received a plumbing licence and decided to start his own business. He had saved $31,000, which he Invested in the business. His lawyer had advised him to start as a corporation. First, he transferred the $31,000 from his savings account to a business bank account for William's Plumbing Services Inc. and was issued shares. He then purchased a used panel truck for $21,500 cash and second hand tools for $3,700, rented space in a small building, Inserted an advertisement in the local paper, and opened his business on July 1 of the current year. Immediately. William was very busy, after one month, he employed an assistant A Although William knew practically nothing about the financial side of the business, he realized that a number of reports were required and that expenses and collections from clients had to be controlled…
- Thomas decides to start a sundry shop business in his home town. He acquired a shop lot for $100,000; stock worth $50,000; fixtures worth $10,000 and a delivery van worth $25,000. Thomas also brought in $1,000 cash into the business. Thomas's total capital amounted to $80,000; the rest of the amount needed to start the business was in the form of a long term loan from City Bank by the business. What is the amount borrowed from City Bank?(iii) (iv) element Select THREE (3) transactions that Kate Minimart performs and illustrate their effect on the accounting equation. Select ONE (1) financial statement to prepare at period end. Describe the following: -the purpose of preparing the statement the key components ONE (1) user and how he can use its information provide a brief format of the selected financial statement (with no numbers).You are to refer to Kate Minimart operation below: Kate operates a minimart store located in a private estate. She invested $20,000 of her own funds and took an additional $10,000 bank loan to pay for the renovation and store fittings totaled $22,000, balance funds to use for operation needs. Kate paid a monthly rent of $5,000 for the store. The minimart sells a variety of goods estimated a total worth of $10,000. All sales are on cash basis amounting to about $12,000 to $14,000 each month. Kate is at a loss how to prepare the accounts for her business. You will perform the following: (0) Select an accounting principle and explain how it can be applied to Kate Minimart 3
- Upon graduation from high school, John Abel immediately accepted a job as an electrician’s assistant for a large local electrical repair company. After three years of hard work, John received an electrician’s license and decided to start his own business. He had saved $12,000, which he invested in the business. First, he transferred this amount from his savings account to a business bank account for Abel Electric Repair Company, Incorporated. His lawyer had advised him to start as a corporation. He then purchased a used panel truck for $9,000 cash and secondhand tools for $1,500; rented space in small building; inserted an ad in the local paper; and opened the doors on October 1, 2019. Immediately, John was very busy; after one month, he employed an assistant. Although John knew practically nothing about the financial side of the business, he realized that a number of reports were required and that costs and collections had to be controlled carefully. At the end of the year, prompted…At the beginning of the summer, Humphrey Nelson was looking for a way to earn money to pay for his college tuition in the fall. He decided to start a lawn service business in his neighborhood. To get the business started, Humphrey used $6,800 from his savings account to open a checking account for his new business, Elegant Lawn Care. He purchased two used power mowers and various lawn care tools for $2,000, and paid $3,600 for a used truck to transport the mowers. Several of his neighbors hired him to cut their grass on a weekly basis. He sent these customers monthly bills. By the end of the summer, they had paid him $5,600 in cash and owed him another $2,800. Humphrey also cut grass on an as-needed basis for other neighbors, who paid him $4,800. During the summer, Humphrey spent $1,200 for gasoline for the truck and mowers. He paid $4,400 to a friend who helped him on several occasions. An advertisement in the local paper cost $1,200. Now, at the end of the summer, Humphrey is…Thangmo Company is a large manufacturing firm in Cherating that was created 20 years agoby the Thangmo family. It was initially financed with an equity investment by the Thangmofamily and 10 other individuals.Over time, Thangmo Company obtained substantial loans from finance companies andcommercial banks. The interest rate on the loans is tied to market interest rates and is adjustedevery six months. It has a credit line with a bank in case it suddenly needs additional funds fora temporary period. It has purchased Treasury securities that it could sell if it experiences anyliquidity problems.Thangmo Company has assets valued at about RM50 million and generates sales of aboutRM100 million per year. Some of its growth is attributed to its acquisitions of other firms.Because of its expectations of a strong Malaysian economy, Thangmo plans to grow in thefuture by expanding its business and by making more acquisitions. It expects that it will needsubstantial long-term financing and plans to…