The “All About You” feature shows the importance of good record-keeping for small businesses and students.
You are a first-year university student and very excited about moving away from home to go to university. Your parents have given you $4,000 and you have a $14,000 student loan. Your parents have told you that $4,000 is all you get for the school year and you are not to phone home for more money.
At September 1, you had $18,000 cash ($4,000 + $14,000), $1,000 worth of clothes, and a cell phone that cost $200. You have kept all of the receipts for all of your expenditures between September 1 and December 15. The following is a complete list of your receipts.
On December 15, you checked the balance in your bank account and you only have $6,000 cash. You can’t sleep, because you know there are some errors in your accounting records and that you will probably have to ask your parents for more money for the next semester.
(a) Calculate your personal equity (deficit) at September 1, 2017.
(b) Prepare a corrected trial balance at December 15, 2017. For each error identified, describe the error.
(c) Calculate your total expenses for the semester and your personal equity (deficit) at December 15, 2017.
(d) Prepare a personal balance sheet at December 15, 2017.
(e) Assuming you will have the same expenses in the second semester, will you have enough cash to pay for them?
(f) Are there any expenses you might be able to avoid in the second semester to save cash?
(g) Are there any additional cash expenditures that will need to be made in the second semester?
(h) Will it be necessary for you to ask your parents for more money for the next semester? Explain.
The All About You feature shows the importance of good