TUTORIAL 1_QUESTIONS

QUESTION 9

Sleep Cheap is a private camping ground near the Boulder Peak Recreation Area. It has
compiled the following financial information as of December 31, 2019.

Services revenues (from camping fees) $132,000 Dividends $ 8,000

Sales revenues (from general store) 25,000 Notes payable 50,000
Accounts payable 13,000 Administrative expenses 133,000
Cash 13,500 Supplies 2,500
Equipment 108,000 Share capital 40,000
Retained earnings (1/1/2019) 5,000

Instructions
(a) Determine net income from Sleep Cheap for 2019.
(b) Prepare a retained earnings statement and a statement of financial position for Sleep
Cheap as of December 31, 2019.

Sleep Cheap
Statement of Profit or Loss For The Year Ended 31 December 2019
Particulars RM RM
Revenue  
Services revenue 132,000
Sales revenue 25,000 157,000
   
Less: Admin Expenses   (133,000)
Net Income   24,000
     

Sleep Cheap
Retained Earning Statement For The Year Ended 31 December 2019
Particulars RM RM
Retained earnings, 1 Jan   5,000
Add: Net Income   24,000
    29,000
Less: Dividen   (8,000)
Retained earnings, 31 Dec   21,000
     

1
 Sleep Cheap
Statement of Financial Position as at 31 December 2019
Particulars RM RM
Assets  
Cash 13,500
Supplies 2,500
Equipment 108,000 124,000
   
Total Assets   124,000
Liability and Equity  
   
Liability  
Note Payable 50,000
Account Payable 13,000 63,000
   
Equity  
Share Capital 40,000
Add: Retained Earnings 21,000 61,000
 
Total Liability and Equity   124,000
 

2
QUESTION 15
Use the following information to calculate for the year ended December 31, 2019 (a) net
income (net loss), (b) ending retained earnings, and (c) total assets.

Supplies ¥ 1,000 Revenues ¥21,000

Operating expenses 12,000 Cash 13,000
Accounts payable 9,000 Dividends 1,000
Accounts receivable 3,000 Notes payable 1,000
Beginning retained earnings 5,000 Equipment 6,000

Statement of Profit or Loss For The Year Ended 31 December 2019

Particulars RM RM
Revenue   21,000
 
Less: Operating Expenses   (12,000)
Net Income 9,000
 

Retained Earning Statement For The Year Ended 31 December 2019

Particulars RM RM
Retained Earning, 1 Jan   5,000
Add: Net Income   9,000
    14,000
Less: Dividen   (1,000)
Retained Earning, 31 Dex   13,000

 
Statement of Financial Position as at 31 December 2019
Particulars RM RM
Assets  
Cash 13,000
Supplies 1,000
Account Receivable 3,000
Equipment 6,000
Total Assets   17,000
   

3
QUESTION 16
Prepare statement of profit or loss, a retained earnings statement, and a statement of financial
position for the acupuncture practice of Lei Chen, from the items listed below for the month of
September 2019.

Retained earnings, September 1 ¥12,000

Share capital-ordinary 30,000
Accounts payable 7,000
Equipment 27,000
Service revenue 24,000
Dividends 6,000
Supplies expense 3,500
Cash 8,000
Utilities expense 700
Supplies 2,800
Salaries and wages expense 9,000
Accounts receivable 14,000
Rent expense 2,000

Lei Chen Acupuncture

Retained Earnings Statement for the month ended 30 September 2019
Particular RM RM
Retained Earnings, 1 Sept   12,000
Add: Net Income   8,800
  20,800
Less: Dividends   6,000
Retained Earnings, 30 Sept   14,800
 

Lei Chen Acupuncture

Statement of Financial Position as at 30 September 2019
Particulars RM RM
Assets  
Equipment 27,000
Cash 8,000
Supplies 2,800
Account Receivable 14,000 51,800
 
Total Assets   51,800
 
Liability and Equity  

4
  
Liability  
Account Payable   7,000
 
Equity  
Share capital-ordinary 30,000
Add: Retained earning, 30 Sept 14,800 44,800
 
Total Liabilities and Equity   51,800