By (Name) Essay Example

Accounting Questions

Answer to Question 1:

Decision Making

The progress of every individual depends on the decision of a person to choose wisely from a variety

Of alternatives. Just like any other activity, investing is one of the instance that requires a rational

Decision. One will be required to forgo one investment plan for another one to achieve the desired

Objectives. Identification of the problem helps in the determination of a rational decision (Oppenheim, Stenson & Wilson 2003, p.160). In Toby’s

Case, he has the opportunity to choose between the two mechanisms of making the rings. However,

The selection of the mechanism will depend on the cost benefit analysis as far as the profit

Maximization is concerned. There are two machines for making the rings but the cost and profit

Yielding is different. For instance, the Deluxe Master machine is costing $12000 while the Fob

Master machine costs $14000. Despite the discrepancy in the costs of these machines, the return on

On the capital varies. The higher the cost of the ring machine maker the higher profit it generates.

From the calculations, it is apparent that fob master machine which has a higher value generates a

Higher profit of more than 65%. As a result, Toby have to gather sufficient information about the

Machine to use in the making of the key rings. The information should be related to the area of study

To enable the person to make the right decision. In the case of Toby, he could use the Fob master

Machine to make the key rings because it yields high profit. Despite the fact that it is expensive, it

Will produce more key rings. Considering the consequence of an alternative also determines the

Type of the method to be used in the production of the key rings. In essence, the management

Should choose an alternative with less adverse consequences. The consequences should be in terms

Of the profits and losses. The organizations should decide to use a mechanism with high profits.

Finally, evaluation of the alternative determines the efficiency of the mechanism as far as the

Objective of the project is concerned. In this case, Toby should evaluate the performance of the Job

Master method for the production of the key rings.

Calculation

Fob Master

Deluxe Key

Component

Cost Per Key Ring ($’s)

Photograph

Plastic Picture Frame

Metal Key Ring

The total cost under Fob Master

Photograph 0.65

Plastic 0.60

Metal Key ring 0.60

Total cost 1.85

The total cost of Key under deluxe method 0.90+1.05+0.95= 2.9

Question 2

General Journal

Accounts and Explanation

building

equipments

Advertising expenses

Coupon books

Cash received from a debtor

Furniture

Membership fee

Upgraded signage

Payment made on signage

creditor

QUESTION 3:

A) General Ledger

Cash at Bank

Garden fee

Mowing loan

Paving fee

Equipment

Insurance expense

Salaries and expense

Accounts payable

Equipment

Cash at bank

Accounts Payable

Cash at bank

Advertising expense

Mac Mignone, Capital

Cash at bank

Garden Design Fees

Cash at bank

Mowing Fees

Cash at bank

Paving Fees

Cash at bank

Advertising Expense

Accounts payable

Insurance Expense

Cash at bank

Salaries Expense

Cash at bank

Trial balance

______Mac’s Magnificent Garden Designs ____________

—————as at 30/10/2015—————-

Account Title

Cash at hand

Equipment

Account payable

Garden design fee

Mowing fee

Paving fee

Advertising expense

Insurance expense

Salaries expense

QUESTION 4:

______________________income statement______________

____________________________________

services revenue

Supplies on hand

Rent expense

Electricity expense

Salary expense

(315280)

Operating profit

__________________statement of changes in equity__________________

____________________________________

Opening capital

Add operating profits

Less drawings

(140120)

____________________________________

_____________balance sheet_______________________

Cash at bank

Accounts receivables

Supplies on hand

Prepaid insurance

Furniture and equipment

Unearned revenue

Account payable

QUESTION 5:

An asset refers to anything owned by a person or a company and it have value with the capability of yielding profits in the company (Kostagiolas & Asonitis 2009, p.420; Think Ahead 2015). As such, a person or a machine may be employed or set under use to generate income. The main of the cricket club is to generate profits. Whatever brings results in this company become the assets. Personally, I can consider cricket players’ assets since the club use them to generate income. In this case, they are valuable assets because whenever the player fail to reach target, they earn little amount which is contrary to the non-asset components.

Reference List

Kostagiolas, P & Asonitis, S 2009, «Intangible assets for academic libraries: Definitions, categorization and an exploration of management issues», Library Management, vol. 30, no. 6/7, pp.419 – 429

Oppenheim, C, Stenson, J & Wilson, R 2003, ‘Studies on information as an asset: Definitions’, Journal of Information Science, vol. 29, no.3, pp. 159-166

Think Ahead 2015, IASB’s conceptual framework for financial reporting, [online] Available at: <http://www.accaglobal.com/za/en/student/exam-support-resources/fundamentals-exams-study-resources/f7/technical-articles/iasb-conceptual-framework-financial-reporting.html>

[Accessed 2 January 2016]

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