Understanding Financial Accounting 3rd Canadian Edition by Christopher D. Burnley solution manual

               Water expense                             6,153
               Utilities expense                        8,756
               Total expenses                                                      60,808
               Net income                                                          $ 145,842
 
b.  Other costs Josephine might have incurred in July that were  
     not listed above include:
 
1. Depreciation expense of water park equipment
2.  Income tax expenses
3.  Interest expense on any outstanding loans
4.  Insurance expense
5.  Other employee benefit costs such as employer portion of CPP and EI
 
LO 5  BT: AP  Difficulty: E Time: 20 min.  AACSB: None  CPA: cpa-t001  CM: Reporting

AP1-14B
a.         Item                                                Classification
     Inventory                                       Asset
               Wages owed to employees       Liability
               Loan owed to the bank                Liability
               Cash held in chequing account        Asset
               Cost of refrigerator                      Asset
               Prepaid rent for June                   Asset
               Common shares                          Shareholders’ equity
               Retained Earnings                            Shareholders’ equity
 
b.                              Scents Unlimited
Statement of financial position
May 31, 2xxx
 
               Cash              $  8,361      Wages payable         $    950
               Inventory         1,100      Bank loan payable         8,000
               Prepaid rent      1,500