CE Principles of Accounts 99 Paper【DOC精选】.docVIP

SECTION A Answer any FOUR questions from this section. Each question carries 10 marks. 1. For each of the independent situations described below, list the accounting principle or concept that has been violated and prepare the original journal entry that should have been made. (No narrations are required.) Furniture with a market value of $80000 was acquired on credit at a cost of $75000. The following entry was made: Debit $ Credit $ Furniture Creditor Gain on purchase of furniture 80000 75000 5000 The owner withdrew $7000 in cash for his vacation trip to Taiwan. The book-keeper recorded the entry as follows: Debit $ Credit $ Travel expense Cash 7000 7000 A pocket-sized calculator was purchased for $20 cash. The book-keeper made the following entry: Debit $ Credit $ Office equipment Cash 20 20 An insurance premium for the coming financial year was adjusted at year end as follow: Debit $ Credit $ Profit and loss Insurance premium 1000 1000 Goods costing $21000 and with a selling price of $25000 were sent on consignment. The following entry was made: Debit $ Credit $ Consignee Consignment sales 25000 25000 (10 marks) 2. Allen and Davis have been partners sharing profits and losses in the ratio of 3:2 respectively. Their balance sheet as at 31 December 1997 was as follows: $ $ $ Goodwill Plant and machinery (net) Stock Debtors Cash at bank 98000 50400 20000 26000 2280 196680 Capital accounts: Allen Davis Creditors 95000 85000 180000 16680 196680 They decided to admit Charles as a partner on 1 January 1998. Charles was to contribute $60000 cash as capital and the new profit and loss sharing ratio for Allen, Davis and Charles was 5:3:2 respectively. Plant and machinery was to be revalued at $76300 and stock of $2000 was to be written off as obsolete. Provision was to be made for doubtful debts at 5% of the debtors. Goodwill was revaluated at $120000, but would not be shown in the books of the new partn