18) Nikki Okuma is going over the transactions for May. She is having fun running South Seas and is eager to learn more about the accounting aspects of her business. Review the following transactions and explain to Nikki the accounting rules that apply to each situation.
1. South Seas imports items from several Pacific island countries. All of them have different currencies.
2. South Seas imported $10,000 worth of inventory in May and sold $3,000 of it in May.
3. Three customers paid $400 in advance deposits for some carvings to be ordered from Tahiti.
4. Nikki has a personal collection of Balinese puppets which is displayed in her store.
19) Baby Boutique had $150 worth of supplies on hand at the beginning of June. During June, the store paid $600 for more supplies. At the end of the month, a physical count showed $475 of supplies left. How much supplies expense did Baby Boutique have during June?
20) Baby Boutique had $250 worth of supplies on hand at the beginning of July. During July, the store paid $460 for more supplies. At the end of the month, a physical count showed $240 of supplies left. How much supplies expense did Baby Boutique have during July?
21) Both Company A and Company B use accrual accounting. Both have $80,000 in sales revenues and $50,000 in expenses for their first month of business. Company A allows cash sales only. Company B sells to its customers on account and as of the end of the month its customers owe $30,000. Show how Company A's and B's four financial statements compare by putting an X under either the Same or Different column for each of the statements.
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Same
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Different
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1. Income Statement
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2. Statement of Changes in Shareholders' Equity
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3. Statement of Cash Flows
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4. Balance Sheet
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