A Refresher in Financial Accounting

APPENDIX 1

Applying the Major Adjustments

 

Solution (NB: I/S: Income statement; B/S: Balance sheet)

Workings

The 2016 workings will be discussed:

 

1.The owners withdrew equity in the form of cash of $40,000:

Minus bank	$40,000
Minus equity	$40,000

2.Premises continued to be rented at an annual rental of $40,000. During the year, rent of $30,000 was paid:

3.Insurance on the premises were paid during the year as follows: for the period April 1, 2016 to March 31, 2017 of $2,600:

4.A second piece of plant and equipment was bought on January ...