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Finance is a core mechanism that keeps our society running. Everybody needs money to exist, and all the daily hustle & bustle are just people & businesses looking to make some money. Markets, industries, competition, resources, supply & demand – the money-making mechanism of the human socio-economy are myriad, nuanced, and multifaceted. And, with billions of people and millions of businesses looking to make decent money, the complexities of financing are quite formidable and calls for systems of control, monitoring, & prediction. Accounting provides the means of effective financial control.
The role of accounting is to accrue and provide information crucial for financial and operational stability. For the sake of simplicity, if we focus specifically on business accounting, we will find that accounting encompasses many processes and techniques for assessing, monitoring, and controlling a business’s financial/economic performance and condition. For aspiring financial accountants, acing accounting assignments is a key aspect in their journey towards absolute accounting mastery.
Subject matter experts from MyAssignmentHelp.com, a leading global academic service provider, are here to help students solve accounting questions online. Read on for a glimpse of their latest solutions and the key features of MyAssignmentHelp’s accounting assignment help services.
An Accounting Solution By Our Experts for a College Assignment
Below is a solution to a university assignment problem on financial statements our experts delivered last month.
# Denver & Dawson, Attorneys—at—Law, is organized as a corporation and operated by Paul Denver & Craig Dawson. On 1st July 2017, the company possessed the following assets, liabilities, and common stock: cash-$1000, accounts receivable – $3200, supplies – $850, land – $10000, accounts payable -$1530, common stock – $10000. The company rents office space and equipment but has an impending construction of an office complex on land purchased the previous year.
Business transactions during July are summarized below 🡪4
- Received cash from clients for services – $3928
- Payment made to creditors on account – $1055
- Received cash as additional investment in exchange for common stock – $3700
- Office rent for the month – $1200
- Charges for legal services on account – $3000
- The invoice received for paralegal services for July (to be paid on August 10) – $1635
- Payments made
- Wages – $850
- Utilities – $325
- Answering service expense – $250
- Miscellaneous – $75
- Cost of supplies on hand – $980; cost of supplies used during the month – $115
- Paid dividends – $1000
- Determine the amount of retained earnings as of 1st July 2017.
- State all the assets, liabilities, and stockholder’s equity as of 1st July in the equation form.
- Prepare an income statement for July and a statement of retained earnings. Also, develop a balance sheet as of July 31st, 2017.
- Prepare a cash flow statement for July.
Solution:
- As per the age-old equation of accounting,
Assets – Liabilities = Stockholder’s equity
Stockholder’s equity is the total value of the assets investors own after settling all liabilities. A company’s common stocks and retained earnings make up the stockholder’s equity. Expenses decrease a company’s retained earnings and the stockholder equity.
Thus, for our problem, we have 🡪
Assets – Liabilities = Stockholder’s Equity
or, ($1000 + $ 32000 + $850 + $ 10000) – $1530 = (Common Stock + Retained Earnings)
or, $15050-1530 = $10000 + X
or, X = Retained Earnings = $3520
- A complete breakdown of the asset/liability accounting equation, in this case, will be as follows 🡪
Assets = Cash + Accounts Receivable + Supplies + Land
Liabilities = Accounts Payable
Stockholder’s Equity = Common Stock + Retained Earnings – Dividends + Fees Earned – paralegal Expenses -Rent Expenses – Wages Expenses – Utilities Expenses – Answering Service Expenses – Supplies Expenses – Miscellaneous Expenses
- Income Statement for July 🡪
| Fees Earned | 5953 |
| Expenses: | |
| Paralegal | 1635 |
| Rent | 1200 |
| Wages | 850 |
| Utilities | 325 |
| Answering | 250 |
| Supplies | 115 |
| Miscellaneous | 75 |
| Total Expenses: | 4450 |
| Net Income: | 1503 |
Retained Earnings Statement for July 🡪
| Retained Earnings till July 1, 2017 | 3520 |
| Net Income | 1503 |
| -Dividends | -1000 |
| Increase in Retained Earnings | (503) |
| Retained Earnings at the end of July | 4023 |
Balance Sheet after July 🡪
Assets
| Cash | 6873 |
| Accounts Receivable | 2225 |
| Supplies | 980 |
| Land | 10000 |
| Total | 20078 |
Liabilities: Accounts Payable = 2355
Stockholder’s Equity
| Common Stock | 13700 |
| Retained Earnings | 4023 |
| Total | 17723 |
| Liabilities + Stockholder’s Equity | 20078 |
- Statement of Cash Flows for July 🡪
| Cash flows from operations: | |
| Cash received from customers | 6928 |
| Operating expenses | -3755 |
| Net cash flow | 3173 |
| Cash flow from investing activities: | — |
| Cash flow from financing activities: | |
| Cash from issuing common stock | 3700 |
| Dividends paid | 1000 |
| Net cash flow | 2700 |
| Net increase in cash | 5873 |
| Cash in hand as of 1st July 2017 | 1000 |
| Cash as of July 31st, 2017 | 68737 |
MCQ Answers from a Cost & Management Accounting Coursework
The multiple-choice questions below were part of management accounting coursework from a student at a leading graduate school in California.
- Management accounting is concerned with the collection of data from ____
- Internal sources
- External sources
- Internal and external sources
- Internal or external sources
- An opportunity cost is the cost of ____
- Lost business
- Unplanned new business
- Obtaining new business opportunities
- The next best alternative course of action
- Which of the following is not an example of a functional budget?
- Production budget
- Cost of production budget
- Materials budget
- None of the above
- What is the purpose of variance analysis in cost accounting?
- Understand the underlying reasons behind variances.
- Take remedial measures to counter adverse variations
- Improve future performances
- All of the above
- The learning curve theory does not apply to:
- Direct labor
- Material
- Spoilage and defects
- Overhead
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