Question

1) The Candidate has to register the above operations using the double-entry bookkeeping system: a) On 15" June firm X sales goods for 15,000 euro + VAT. Payment by bank transfer on 25 June; b) On 20 March firm X purchases goods for 22,500 euro + VAT. Payment by cash on 25* March; c) On 22 November firm X sales goods for 12,000 euro + VAT. There are passive allowances for 2,000 euro. Payment by bank transfer on 28 November; d) On 22th July firm X buys products of 8,200 euro + VAT, shipping expenses are 10% of product amount. Payment by bank transfer on 29th August; e) On 27h September Company X sales an equipment whose historical cost is 3,000 euro and whose depreciation provision presents a value of 2,000 euro. The sale price is € 500; f) On 24th June Company X sales an equipment whose historical value is 8,000 euro and whose depreciation provision presents a value of 4,000 euro. The sale price amounts to 6,000 euro + VAT; g) A credit represented by notes receivable for 10,500 euro expires, company grants a payment extension through the total renewal of the bill of exchange and the payment of the related deferred interests for an amount of 200 euro; h) On 30th June a debt represented by a note payable for 9,000 euro expires and is allowed a delay payment through the total renewal of the note for other two months. Interest, paid in advance, is a 8% rate. remember the VAT is 22%

Answer 1

a) On 15" June firm X sales goods for 15,000 euro + VAT. Payment by bank transfer on 25 June; Date Credit Debit € 18,300.00 15th June Description Debtor A/C Sales A/C VAT Payable A/C (X Sales goods for 15,000 euro + VAT) € € 15,000.00 3,300.00 VAT @ 22% 25th June € 18,300.00 Bank A/C Debtor A/C (Payment by bank transfer on 25 June) € 18,300.00 b) On 20 March firm X purchases goods for 22,500 euro + VAT. Payment by cash on 25* March; Credit Date 20th March Description Purchase A/C VAT Payable A/C Creditor A/C (purchases goods for 22,500 euro +VAT) Debit € 22,500.00 € 4,950.00 VAT @ 22% € 27,450.00 25th March € 27,450.00 Creditor A/C Cash A/C (Payment by cash on 25* March) € 27,450.00 c) On 22 November firm X sales goods for 12,000 euro + VAT. There are passive allowances for 2,000 euro Payment by bank transfer on 28 November; Date Description Debit Credit 22nd November Debtor A/C € 16,640.00 Sales A/C € 12,000.00 VAT Payable A/C € 2,640.00 VAT @ 22% Expenses € 2,000.00 (X Sales goods for 12,000 euro + VAT. There are passive allowances for 2000 euro.) 16,640.00 28th November Bank A/C € Debtor A/C (Payment by bank transfer on 28 November) € 16,640.00 d) On 22th July firm X buys products of 8,200 euro + VAT, shipping expenses are 10% of product amount. Payment by bank transfer on 29th August; Date 22nd July Description Debit Credit Purchase A/C € 8,200.00 VAT Payable A/C € 1,804.00 VAT @ 22% Shipping Expenses € 820.00 Creditor A/C € 10,824.00 (purchases goods for 8,200 euro + VAT. Shipping Expenses are 10% of product amount) 29th August € 10,824.00 Creditor A/C Bank A/C € 10,824.00 e) On 27th September Company X sales an equipment whose historical cost is 3,000 euro and whose depreciation provision presents a value of 2,000 euro. The sale price is € 500; Date Description Debit Credit 27th September Cash A/C € 500.00 Provision for Depriciation € 2,000.00 Loss on Sales € 500.00 Equipments € 3,000.00 f) On 24th June Company X sales an equipment whose historical value is 8,000 euro and whose depreciation provision presents a value of 4,000 euro. The sale price amounts to 6,000 euro + VAT; Date Description Debit Credit 24th June Cash A/C € 7,320.00 Provision for Depriciation € 4,000.00 Equipments € 8,000.00 VAT Payable € 1,320.00 Profit on Sales € 2,000.00 g) A credit represented by notes receivable for 10,500 euro expires, company grants a payment extension through the total renewal of the bill of exchange and the payment of the related deferred interests for an amount of 200 euro Date Credit Debit € 10,500.00 Description Drawee's Alc Bills Receivable (Entry for Cancellation of the Bill) € 10,500.00 € 200.00 Cash Alc Deferred Interest (Entry for Interest Received) € 200.00 h) On 30th June a debt represented by a note payable for 9,000 euro expires and is allowed a delay payment through the total renewal of the note for other two months. Interest, paid in advance, is a 8% rate Date Description Debit Credit Bills Payable € 9,000.00 Drawer's A/C € 9,000.00 (Entry for Cancellation of the Bill) € 1,440.00 Interest Expenses Cash A/C (Interest Paid in advance) € 1,440.00