MIB Assignment Toolbox Accounting

Student: Camila Panizzi Luz

Student ID: 964496
Date: 30/09/2014
Task: You will be provided with a list of economic transactions. You must record the
appropriate transactions using the accounting equation framework and prepare a
balance sheet and income statement. You must include documentation of all the
steps in the accounting cycle: trial balance, adjustments, pre-closing trial balance,
closing and post-closing trial balance.
Rapid Response IT, Ltd. had the following transactions in the calendar year ending
December 31, 2013 (all amounts are in thousands of GBP).
RAPID RESPONSE LTD. TRANSACTIONS
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
k)
l)

Activity
Amount Other
Sales of IT equipment
5110 Half were paid for in 2013 and the balance is due in 2014
Sales of software
2000 Paid for in 2013
Sales of consulting services
1000 670 paid for in 2013 and balance due in 2014
IT equipment purchased for resale
2000 1500 for in 2013 and the balance of 500 due in 2014
Salaries and benefits paid
1500 One month due in 2014
Administrative expenses
1000 All paid for in 2013
Rent
500 One month due for payment in 2014
Tax paid
1533.10 Tax rate of 30% and amount paid in 2014
Payment Received
2000 Payment against accounts receivable at end of 2012
Payment of rent owed
40 Payment against rent owed at end of 2012
Payment of tax owed
300 Payment against tax owed at end of 2012
Payment of salaries and benefits owed
120 Payment against salaries and benefits owed

RAPID RESPONSE LTD. Balance

(in thousands) December 31, 2012
Assets
Cash
Accounts receivable
Inventory

500
2000
500

Current Liabilities
Salaries and benefits payable
IT equipment payable
Rent payable
Tax owed

120
40
40
300

Shareholders Equity
Contributed capital
Retained earnings

500
2000

RAPID RESPONSE LTD. Trial Balance Worksheet

Transaction
A

B
C

F
G

H
I
J
K
L

Account name
Debit Credit
Cash (+ A)
2555
Accounts Receivable (+ A)
2555
Sales Revenue (+ R)
5110
Cash (+ A)
2000
Sales Revenue (+ R)
2000
Cash (+ A)
670
Accounts Receivable (+ A)
330
Service Revenue (+ R)
1000
Cash (- A)
1500
IT Software Payable (+ L)
500
Inventory (+ A)
2000
Salary Payable (- L)
1500
Salary Expenses (+ A)
1375
Prepaid Salary (+ A)
125
Cash (- A)
1000
Administrative Expenses (+ E)
1000
Rent Payable (- L)
500
Rent Expenses (+ E)
458
Prepaid Rent (+ E)
42
Cash (- A)
Tax Expenses (+ E)
Cash (+ A)
2000
Accounts Receivable (- A)
2000
Cash (- A)
40
Rent Payable (- L)
40
Cash (- A)
300
Tax Payable (- L)
300
Cash (- A)
120
Salaries and Benefits Payable (-L)
120
TOTAL
15570 15570

RAPID RESPONSE LTD. Trial Adjustments

CASH
Debit
Credit
500
2555
2000
670
2000
4765

1500
1000
40
300
120

ACCOUNTS RECEIVABLE
Debit
Credit
2000
2000
2555
330
2885

Debit
TAX PAYABLE
Debit
Credit
300
300
CONTRIBUTED CAPITAL
Debit
Credit
500
500
RETAINED EARNINGS
Debit
Credit
2000
2000
SALARY EXPENSES
Debit
Credit
1375
1375

INVENTORY
Credit
500
2000
2500

SALARY PAYABLE
Debit
Credit
120
120
1500
1500
IT SOFTWARE PAYABLE
Debit
Credit
40
500
540
RENT PAYABLE
Debit
Credit
40

REVENUES
Debit
Credit
1000
5110
2000
8110
PREPAID EXPENSES
Debit
Credit
42
125
167

40
500
500

ADMINISTRATIVE EXPENSES
Debit
Credit
1000
1000
RENT EXPENSES
Debit
Credit
458
458

FINAL TRIAL BALANCE WORKSHEET

Account Name
Cash Account Receivable
Account Receivable
Inventory
Salary Payable
Tax Payable
IT Software Payable
Contributed Capital
Retained Earnings
Rent Payable
Salary Expenses
Revenues
Adminstrative Expenses
Rent Expenses
Prepaid Expenses
Total

Debit
4765.00
2885.00
2500.00

Credit

1500.00
540.00
500.00
2000.00
500.00
1375.00
8110.00
1000.00
458.00
166.67
13,150.00

13,150.00

INCOME STATEMENT
Revenues
8110.00
Salary Expenses
-1375.00
Administrative Expenses -1000.00
Rent Expenses
-458.00
Prepaid Expenses
-166.67
Pre-tax
Tax (30%)

5110.33
-1533.10

Net Income

3577.23

RAPID RESPONSE LTD. Balance

(in thousands) Decemeber 31, 2013
Assets
Cash
Accounts receivable
Inventory
Current Liabilities
Salaries and benefits payable
IT equipment payable
Rent payable
Tax owed
Shareholders Equity
Contributed capital
Retained earnings

10150.00
4765.00
2885.00
2500.00
4073.00
1500.00
540.00
500.00
1533.10
6077.00
500.00
5577.00

In January 2014, just after the trial balance was closed Rapid Response IT Ltd.
received a rebate on computer equipment purchased in 2013 from a key supplier of
100, which was credited against accounts payable. Make the appropriate
adjustments to the 2013 Income Statement and Balance Sheet.
Adjustments made below:

INCOME STATEMENT
Revenues
8110.00
Other Revenues
100.00
Salary Expenses
-1375.00
Administrative Expenses -1000.00
Rent Expenses
-458.00
Prepaid Expenses
-166.67
Pre-tax
Tax (30%)

5210.33
-1563.10

Net Income

3647.23

RAPID RESPONSE LTD. Balance

(in thousands) Decemeber 31, 2013
Assets
Cash
Accounts receivable
Inventory
Current Liabilities
Salaries and benefits payable
IT equipment payable
Rent payable
Tax owed
Shareholders Equity
Contributed capital
Retained earnings

10150.00
4765.00
2885.00
2500.00
4003.10
1500.00
440.00
500.00
1533.10
6147.23
500.00
5647.23