Trang Nguyen operates a roofing business that specialises in replacing broken tiles and cleaning and repairing roofs and gutters. He began business in April 2016 but has not yet established a formal set of records. His son, Tram, has prepared cash receipts and payments statements for each of the first 3 months of the business, but Trang Nguyen is worried about relying on them. He asks you to prepare a ‘proper’ set of for the month of June.
By reviewing the bank statements, cheque butts, invoice files and other data, you derive a set of balance sheets at 1 June and 30 June. These are shown below, followed by a statement of cash receipts and payments for March. GST is ignored.
|
NGUYEN ROOFING SERVICE Balance Sheets |
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|
1 June 2016 |
30 June 2016 |
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|
ASSETS Cash at bank Accounts receivable Supplies on hand Equipment Accumulated depreciation (credit) |
$ |
9 280 7 220 4 100 62 000 (7 600) |
$ |
15 480 9 280 4 640 74 400 (10 300) |
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|
$ |
75 000 |
$ |
93 500 |
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|
LIABILITIES AND EQUITY Salaries payable Electricity account payable T. Nguyen, Capital |
$ |
4 640 — 70 360 |
$ |
7 380 1 470 84 650 |
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|
$ |
75 000 |
$ |
93 500 |
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|
NGUYEN ROOFING SERVICE Statement of Cash Receipts and Payments for June 2016 |
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|
CASH RECEIPTS Received from credit customers Contributed by T. Nguyen |
$ |
27 860 20 000 |
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|
Total cash receipts CASH PAYMENTS Paid for supplies purchased Purchase of equipment Payment of salaries Paid for June rent Sundry expenses Cash withdrawn by T. Nguyen |
6 190 12 400 6 700 2 000 2 370 12 000 |
$ |
47 860 |
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|
Total cash payments |
41 660 |
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|
Net increase in cash balance |
$ |
6 200 |
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Required
A. From the information, prepare an income statement on the accrual basis for the month of June. Hint: you may wish to prepare (reconstruct) relevant accounts.
B. Illustrate the apparent correctness of your profit amount by preparing a statement of changes in equity for June 2016.
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