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Group exercise prepare midterm test, Exercises of Principles of Accounting

Vietnam National University Ho Chi Minh City (VNUHCM)Principles of Accounting

This exercise no solution but you can read lecture'note and do it again to enhace your knowledge

Typology: Exercises

2020/2021

Uploaded on 10/20/2023

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GROUP ASSIGNMENT
After researching the different forms of business organization, Tang Lee decides to
operate “Tang Lee Bakery” as a sole trader. He then starts the process of getting the business
running. In November 2022, the following activities take place.
Nov. 8 He opens a bank account under the name “Tang Lee Bakery” and transfers
NT$500 from his personal account to the new account for investing his business.
11 Tang Lee pays NT$65 to have advertising brochures and posters printed. He
plans to distribute these as opportunities arise.
13 He buys baking supplies, such as flour, sugar, butter, and chocolate chips,
for NT$125 cash.
14 Tang Lee starts to gather some baking equipment to take with his when
teaching the cookie classes. He has an excellent top-of-the-line food processor and mixer that
originally cost his NT$750. Tang Lee decides to start using it only in his new business. He
estimates that the equipment is currently worth NT$300. He invests the equipment in the
business for investing his business.
16 Tang Lee realizes that his initial cash investment is not enough. His
grandmothis lends his NT$2,000 cash, for which Tang Lee signs a 24-month note payable in
the name of the business. Tang Lee deposits the money in the business bank account.
17 He buys more baking equipment for NT$900 cash.
20 He teaches his first class and collects NT$125 cash.
25 Tang Lee books a second class for December 4 for NT$150. He receives
NT$30 cash in advance as a down payment.
30 Tang Lee pays NT$1,320 for a one-year insurance policy that will expire on
December 1, 2023.
It is the end of November and Tang Lee has been in touch with his grandmother. His
grandmother asked Tang Lee how things went in his first month of business. Tang Lee, too,
would like to know if the company has been profitable or not during November. Tang Lee
realizes that in order to determine Tang Lee Bakery’s income, he must first make adjustments.
Tang Lee puts togethis the following additional information.
1. A count reveals that NT$35 of baking supplies were used during November.
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1

GROUP ASSIGNMENT

After researching the different forms of business organization, Tang Lee decides to operate “Tang Lee Bakery” as a sole trader. He then starts the process of getting the business running. In November 2022, the following activities take place. Nov. 8 He opens a bank account under the name “Tang Lee Bakery” and transfers NT$500 from his personal account to the new account for investing his business. 11 Tang Lee pays NT$65 to have advertising brochures and posters printed. He plans to distribute these as opportunities arise. 13 He buys baking supplies, such as flour, sugar, butter, and chocolate chips, for NT$125 cash. 14 Tang Lee starts to gather some baking equipment to take with his when teaching the cookie classes. He has an excellent top-of-the-line food processor and mixer that originally cost his NT$750. Tang Lee decides to start using it only in his new business. He estimates that the equipment is currently worth NT$300. He invests the equipment in the business for investing his business. 16 Tang Lee realizes that his initial cash investment is not enough. His grandmothis lends his NT$2,000 cash, for which Tang Lee signs a 24-month note payable in the name of the business. Tang Lee deposits the money in the business bank account. 17 He buys more baking equipment for NT$900 cash. 20 He teaches his first class and collects NT$125 cash. 25 Tang Lee books a second class for December 4 for NT$150. He receives NT$30 cash in advance as a down payment. 30 Tang Lee pays NT$1,320 for a one-year insurance policy that will expire on December 1, 2023. It is the end of November and Tang Lee has been in touch with his grandmother. His grandmother asked Tang Lee how things went in his first month of business. Tang Lee, too, would like to know if the company has been profitable or not during November. Tang Lee realizes that in order to determine Tang Lee Bakery’s income, he must first make adjustments. Tang Lee puts togethis the following additional information.

  1. A count reveals that NT$35 of baking supplies were used during November.

2

  1. Tang Lee estimates that all of his baking equipment will have a useful life of 5 years (assume Tang Lee decides to record a full month’s worth of depreciation, regardless of when the equipment was obtained by the business.)
  2. Tang Lee’s grandmother has decided to charge interest of 6% on the note payable extended on November 16 (assume that half a month of interest accrued during November.)
  3. On November 30, a friend of Tang Lee’s asks his to teach a class at the neighborhood school. Tang Lee agrees and teaches a group of 35 first-grade students how to make holiday cookies. The next day, Tang Lee prepares an invoice for NT$300 and leaves it with the school principal. The principal says that he will pass the invoice along to the head office, and it will be paid some time in December.
  4. Tang Lee receives a utility bill for NT$45. The bill is for utilities consumed by Tang Lee’s business during November and is due December 15. Requirement (a) Prepare journal entries to record the November transactions and post them to general ledger accounts, using the standard T-form account. (b) Prepare adjusting entries and post them to T-accounts. (c) Prepare a workheet of November 2022. (d) Using workheet to prepare an income statement and statement of changes in equity for the month ended November 30, 2022, and a classified statement of financial position at November 30, 2022. (e) Prepare closing entries as of November 30, 2022 and post them to T-accounts and enter closing entries and prepare post-closing trial balance in the worksheet.
  • The end- Good luck!