Accounting Exercises
Section 1 - The Balance Sheet Equation1.1
(a) When was the Balance Sheet prepared.
(b) How much has the owner invested.
(c) How much has the owner taken out of the business.
Exercise 1.1 Solution
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1.2 If D Webber's business has the following assets and liabilities what is her Investment in the business ?
| Cash in hand | 1000 |
| Loan from Bank | 4000 |
| Accounts payable | 500 |
| Accounts receivable | 8000 |
| Office Furniture | 3500 |
Exercise 1.2 Solution
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1.3 R Dolley has the following assets and liabilities
What is the Balance Sheet Equation for his business ?
| Assets | Liabilities | ||
| Cash on hand | 5000 | Accounts payable | 1250 |
| Accounts receivable | 2500 | ||
| Inventories | 5000 | ||
| Plant | 2500 |
Exercise 1.3 Solution
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1.4 From the list of the following items determine the value of the assets
| Monies owed to L Boyle | 4500 |
| Value of stock on hand | 4000 |
| Bank overdraft | 1500 |
| Plant and Equipment | 8000 |
| Owners investment in business | 6000 |
Exercise 1.4 Solution
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1.5 Samuel Smith wants to know how much he is worth on the 1/1/2001.
He has a House valued at $150,000 but still owes 110,000.
He has a car worth 15,000 and still owes $6000.
His furniture and personal effects are worth 11,000.
He is hiring a personal computer for $60 per month.
His bank account has $2500.
State his personal balance sheet equation.
Exercise 1.5 Solution
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1.6
Draw up succesive Balance sheets for the following Transactions
(a) Bought office equipment for $400 cash.
(b) Drew $200 for personal use.
(c) Paid $200 off loan.
(d) Bought a $2000 motor vehicle on credit from Zippy Car Sales
Exercise 1.6 Solution
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1.7 Find the Balances for each of the following accounts
Exercise 1.7 Solution
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2.1 From the list of Account Balances prepare a Trial Balance
| Accounts Receivable | 4250 |
| Land and Buildings | 6000 |
| Workshop equipment | 500 |
| Sales | 14000 |
| Accounts payable | 3800 |
| Drawings | 600 |
| Office Equipment | 400 |
| Purchases | 9200 |
| Petty Cash | 50 |
| Bank overdraft | 560 |
| Sales Returns | 180 |
| Salaries | 1500 |
| Rent Paid | 175 |
| Purchases returns | 120 |
| Freight inwards | 110 |
| Delivery Expenses | 85 |
| Sales discounts | 110 |
| Sundry expenses | 190 |
| Capital | 4870 |
Exercise 2.1 Solution
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2.2 The Unbalanced Trial Balance
The following Trial Balance doesn't balance, your task is to balance it.
Exercise 2.2 Solution
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2.3 T Pickett is an environmental consultant, analyse and post the following Transactions to T accounts calculate the balances of the accounts and prepare a Trial Balance for her business.
Charged PHB Ltd for services $10000
Received $50 cash for advice to a local business
Charged Waste Management Inc for environmental study $20000
Paid wages $500 and rent $500
Received $10000 for PHB Ltd.
Exercise 2.3 Solution
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2.4 Addie's Bazaar has had the following transactions.
Post them to T accounts, calculate their balances and prepare a Trial Balance.
Addie commenced business with $1000 cash
Received rent from a Stall Holder $200
Bought goods from Dodgey Bros Auctions $500
Sold goods to B Allen on credit for $600.
Paid Dodgey Bros $500
Sold stock for $1000 cash.
Exercise 2.4 Solution
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3.1 Larry Noodle runs a small basketball trading card business.
He has valued his closing stock at $1500 and calculated the balances of his accounts as follows.
You are to determine his Cost of Goods Sold figure and Gross Profit.
Sales $5500
Purchases $3450
Opening Stock $1450
Exercise 3.1 Solution
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4.1 Rip, Off and Leave, a firm of solicitors, started business on June the 1st.
Their transactions for June are as follows
jun 2 Deposited $500 in a bank account
jun 3 Paid $60 for stationery and office expenses
jun 10 Paid typist's salary $88
jun 15 Recieved fees from clients $30
jun 17 Paid typist's salary $88
jun 25 Paid rent $170 and cleaning $65
jun 31 Received fees from clients $30
You are required to prepare ledger accounts, a profit and loss account and Balance Sheet for the month.
(hint: as Rip, Off and Leave are solicitors they do not buy or sell stock. Therefore you will not need a Trading Account.)
Exercise 4.1 Solution
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4.2 Below are listed the account balances of Blue Sky Software.
Prepare a Trial Balance, Trading and Profit & Loss account and Balance Sheet.
A stocktake revealed there is $8475 of stock on hand.
Exercise 4.2 SolutionClick here to return to course.
4.3 Below is listed details of Lucy's Lockets accounts.
Prepare a Trial Balance, Trading and Profit & Loss account and Balance Sheet.
Exercise 4.3 Solution Click here to return to course.