Accounting Fundamentals - exercises
Exercise - LA Ducks Ltd.
Jan.
Linda and Ada are sisters; they open a retail store to sell rubber ducks in Jan. 2013. The retail store is called LA Ducks Ltd.
Both girls put in $20,000 to the business. They deposit the money in the company's bank account. Then, they purchased some furniture at $5,000. Their mother lend them $10,000 as long-term loan. To start their business, they purchase 500 rubber ducks from Mainland at the cost of $20; they intend to sell the rubber duck at $200 each. Before they start to sell the rubber ducks, Linda decides to give 2 ducks to her boyfriend as his birthday gift. Ada agree to charge Linda at cost of $20 each in this case.
Feb.
LA Ducks Ltd invites Andy Lau to attend the opening ceremony of their store and agree to pay Andy $1,000 as promotional fee. In Feb., LA Ducks are able to sell 200 ducks; however, they also found that 3 rubber ducks are deformed, which need to be written off. Their mother then ask them to pay $100 as interest charge for her long-term loan.
Mar.
LA Ducks Ltd sells 50 ducks to retail consumers. Ada's boyfriend also purchase 2 ducks to be paid in April. Linda's boyfriend draws a painting as decoration of the store and charges the retail store for $100 for the painting work. Ada discovers that rubber ducks from Burma are cheaper. Thus, she places an order of 100 rubber ducks at $10 each. They are allowed to pay for the order from the Importer in May. Their mother ask them to pay $100 as interest charge for her long-term loan.
April
LA Ducks Ltd sells 50 ducks; Linda subscribes the newspaper of SCMP at $1,200 for a year. Ada gets a notice from the Insurance company that LA Ducks Ltd needs to pay for their April fire insurance at $100, to be paid in May. Unfortunately, there is a fire in April which destroys 4 ducks in the warehouse; they found that the ducks destroyed are from Burma. In April, their father makes another long-term loan of $20,000 to the store. Linda and Ada decide to repay $5,000 to their mother to reduce her amount of long-term loan to the store. The store also needs to pay store monthly rental of $500 and electricity bill of $530.
Task:
Prepare Balance Sheet and Income statements for LA Ducks for the month of Jan, Feb., Mar and April.
Jan.
Linda and Ada are sisters; they open a retail store to sell rubber ducks in Jan. 2013. The retail store is called LA Ducks Ltd.
Both girls put in $20,000 to the business. They deposit the money in the company's bank account. Then, they purchased some furniture at $5,000. Their mother lend them $10,000 as long-term loan. To start their business, they purchase 500 rubber ducks from Mainland at the cost of $20; they intend to sell the rubber duck at $200 each. Before they start to sell the rubber ducks, Linda decides to give 2 ducks to her boyfriend as his birthday gift. Ada agree to charge Linda at cost of $20 each in this case.
Feb.
LA Ducks Ltd invites Andy Lau to attend the opening ceremony of their store and agree to pay Andy $1,000 as promotional fee. In Feb., LA Ducks are able to sell 200 ducks; however, they also found that 3 rubber ducks are deformed, which need to be written off. Their mother then ask them to pay $100 as interest charge for her long-term loan.
Mar.
LA Ducks Ltd sells 50 ducks to retail consumers. Ada's boyfriend also purchase 2 ducks to be paid in April. Linda's boyfriend draws a painting as decoration of the store and charges the retail store for $100 for the painting work. Ada discovers that rubber ducks from Burma are cheaper. Thus, she places an order of 100 rubber ducks at $10 each. They are allowed to pay for the order from the Importer in May. Their mother ask them to pay $100 as interest charge for her long-term loan.
April
LA Ducks Ltd sells 50 ducks; Linda subscribes the newspaper of SCMP at $1,200 for a year. Ada gets a notice from the Insurance company that LA Ducks Ltd needs to pay for their April fire insurance at $100, to be paid in May. Unfortunately, there is a fire in April which destroys 4 ducks in the warehouse; they found that the ducks destroyed are from Burma. In April, their father makes another long-term loan of $20,000 to the store. Linda and Ada decide to repay $5,000 to their mother to reduce her amount of long-term loan to the store. The store also needs to pay store monthly rental of $500 and electricity bill of $530.
Task:
Prepare Balance Sheet and Income statements for LA Ducks for the month of Jan, Feb., Mar and April.
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