This accounting problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.
ScanSolve AI Answer
The amounts from 2017 are used as opening balances to adjust the cash transactions of the current year (2018) to determine the actual income and expenditure for the year ended 31 July 2018. Here's how they were used: Subscription in advance (31 July 2017): This M 300 was received in 2017 but related to the 2018 financial year. Therefore, it was added* to the subscriptions received in 2018 to get the total subscription income for 2018. Amount due to suppliers for cafe (31 July 2017): This M 420 was an expense incurred in 2017 but paid in 2018. To find the actual cafe purchases for 2018, this amount was subtracted* from the total payments made to suppliers in 2018. Inventory of cafe (31 July 2017): This M 965 was the opening inventory* for the 2018 financial year. It was used in the calculation of the Cost of Cafe Sales for 2018. That's 2 down. 3 left today — send the next one.