On December 1, ABC Co. hired Juanita Perez to begin working on January 2 at a monthly salary of Rs. 14,000. ABC's balance sheet of December 31 will show a liability of?

Rs. 14,000

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Rs. 8,000

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No liability

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Rs. 2,000

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Solution

The correct option is C
No liability

There is no liability for ABC until Juanita performs work for ABC. Prior to January 2, ABC has a commitment but will not have a liability.

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Similar questions

Following is the Receipt and Payment Account of Indian Sports Club, prepared Income and Expenditure Account, Balance Sheet as on December 31, 2017:

Receipt and Payment Account for the year ending December 31, 2017
Receipts	Amount Rs	Payments	Amount Rs
Balance b/d	7,890	Salary	11,000
Subscriptions	52,000	Electric charges	5,500
Life member ship fee	2,200	Billiard Table	17,500
Entrance fee	3,200	Office expenses	4,100
Tournament fund	26,000	Printing and Stationery	2,300
Locker Rent	1,250	Tournament expenses	18,500
Sale of old sports goods (Costing Rs 2,200)	2,500	Repair of ground	2,000
Sale of Old Newspaper	750	Furniture purchased	7,700
Legacy	37,500	Sports equipments	12,000
		Cash in Hand	12,690
		Cash at Bank	10,000
		Fixed Deposit (on 1.10.17 for 10% p.a)	30,000

	1,33,290		1,33,290

Other Information:

Subscription outstanding was on December 31, 2016 Rs 1,200 and Rs 3,200 on December 31, 2017. Locker rent outstanding on December 31, 2017 Rs 250. Salary outstanding on December 31, 2017 Rs 1,000.

On January 1, 2017, club has Building Rs 36,000, furniture Rs 12,000, Sports equipments Rs 17,500. Depreciation charged on these items @ 10% (including Purchase).

Following is the Receipt and Payment Account of Indian Sports Club, prepared Income and Expenditure Account, Balance Sheet as on December 31, 2006:

Receipt and Payment Account for the year ending December 31, 2006
Receipts	Amount Rs	Payments	Amount Rs
Balance b/d	7,890	Salary	11,000
Subscriptions	52,000	Electric charges	5,500
Life member ship fee	2,200	Billiard Table	17,500
Entrance fee	3,200	Office expenses	4,100
Tournament fund	26,000	Printing and Stationery	2,300
Locker Rent	1,250	Tournament expenses	18,500
Sale of old sports goods (Costing Rs 2,200)	2,500	Repair of ground	2,000
Sale of Old Newspaper	750	Furniture purchased	7,700
Legacy	37,500	Sports equipments	12,000
		Cash in Hand	12,690
		Cash at Bank	10,000
		Fixed Deposit (on 1.10.06 for 10% p.a)	30,000

	1,33,290		1,33,290

Other Information:

Subscription outstanding was on December 31, 2005 Rs 1,200 and Rs 3,200 on December 31, 2006. Locker rent outstanding on December 31, 2006 Rs 250. Salary outstanding on December 31, 2006 Rs 1,000.

On January 1, 2006, club has Building Rs 36,000, furniture Rs 12,000, Sports equipments Rs 17,500. Depreciation charged on these items @ 10% (including Purchase).

From the following Receipt and Payment Account of a club, prepare Income and Expenditure Account for the year ended December 31, 2006 and the Balance Sheet as on that date.

Receipt and Payment Account for the year ending December 31, 2006
Receipts		Amount Rs	Payments	Amount Rs
Balance b/d		3,500	General expenses	900
Subscription: 2005 2006 2007	1,800 70,000 3,000	75,000	Salary Postage Electricity charges Furniture	16,000 1,300 7,800 26,500
Sale of old Books		2,000	Books	13,000
(Costing Rs 3,200)			Newspapers	600
Rent from use of hall		17,000	Meeting expenses	7,200
Sale of newspapers		400	T.V. set	16,000
Profit from entertainment		7,300	Balance c/d	15,900

		1,05,200		1,05,200

Additional Information:

(a)	The club has 100 members each paying an annual subscription of Rs900. Subscriptions outstanding on December 31, 2005 were Rs 3,600.
(b)	On December 31, 2006 , salary outstanding amounted to Rs 1,000, Salary paid included Rs 1,000 for the year 2005.
(c)	On January 1, 2006 the club owned land and building Rs 25,000, furniture Rs 2,600 and books Rs 6,200.

From the following Receipt and Payment Account of a club, prepare Income and Expenditure Account for the year ended December 31, 2013 and the Balance Sheet as on that date.

Additional Information:
(a) The club has 100 members each paying an annual subscription of Rs 900. Subscriptions outstanding on December 31, 2012 were Rs 3,600.
(b) On December 31, 2013 , salary outstanding amounted to Rs 1,000, Salary paid included Rs 1,000 for the year 2012.
(c) On January 1, 2013 the club owned land and building Rs 25,000, furniture Rs 2,600 and books Rs 6,200.

Q. Capital on 1 January Rs.65,000, Interest on drawing Rs.5,000, Interest on Capital Rs.2,000, Drawings Rs.14,000, Profit for the year Rs.15,000. His capital as on 31 December will be _____________.

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On December 1, ABC Co. hired Juanita Perez to begin working on January 2 at a monthly salary of Rs. 14,000. ABC's balance sheet of December 31 will show a liability of?

The correct option is C No liability There is no liability for ABC until Juanita performs work for ABC. Prior to January 2, ABC has a commitment but will not have a liability.

The correct option is C
No liability

There is no liability for ABC until Juanita performs work for ABC. Prior to January 2, ABC has a commitment but will not have a liability.