Uploaded by 191360445

Assignment 1 Acc204

advertisement
Assignment No: 1
Principles of Financial Accounting-I
Total Marks: 70
Date of Submission: February 22, 2022. (4: 00 Pm)
Mode of Submission: Only by hand and hand written assignment is acceptable
Question No: 1
On May 1, Jeff Wilkins started Skyline Flying School, a company that provides flying lessons, by
investing $45,000 cash in the business. Following are the assets and liabilities of the company on
May 31, 2010, and the revenues and expenses for the month of May.
Cash
$ 5,600
Notes Payable $30,000
Accounts Receivable 7,200
Rent Expense 1,200
Equipment
64,000
Repair Expense 400
Lesson Revenue
7,500
Fuel Expense 2,500
Advertising Expense 500
Insurance Expense 400
Accounts Payable
800
Jeff Wilkins made no additional investment in May, but he withdrew $1,500 in cash for personal
use.
Instructions
(a) Prepare an income statement and owner’s equity statement for the month of May and a
balance sheet at May 31.
(b) Prepare an income statement and owner’s equity statement for May assuming the following
data are not included above: (1) $900 of revenue was earned and billed but not collected at May
31, and (2) $1,500 of fuel expense was incurred but not paid.
Question No: 2
On April 1, Vinnie Venuchi established Vinnie’s Travel Agency. The following transactions were
completed during the month.
1. Invested $15,000 cash to start the agency.
2. Paid $600 cash for April office rent.
3. Purchased office equipment for $3,000 cash.
4. Incurred $700 of advertising costs in the Chicago Tribune, on account.
5. Paid $800 cash for office supplies.
6. Earned $11,000 for services rendered: $3,000 cash is received from customers, and the balance
of $8,000 is billed to customers on account.
7. Withdrew $500 cash for personal use.
8. Paid Chicago Tribune amount due in transaction (4).
9. Paid employees’ salaries $2,200.
10. Received $4,000 in cash from customers who have previously been billed in transaction (6).
Instructions
(a) Prepare a tabular analysis of the transactions using the following column headings: Cash,
Accounts Receivable, Supplies, Office Equipment, Accounts Payable, V. Venuchi, Capital; V.
Venuchi, Drawings; Revenues, and Expenses.
(b) From an analysis of the owner’s equity columns, compute the net income or net loss for April.
Question No: 3
Slow hand Services was formed on May 1, 2010. The following transactions took place during the
first month.
Transactions on May 1:
1. Eric Clapton invested $50,000 cash in the company, as its sole owner.
2. Hired two employees to work in the warehouse. They will each be paid a salary of $2,800 per
month.
3. Signed a 2-year rental agreement on a warehouse; paid $24,000 cash in advance for the first
year.
4. Purchased furniture and equipment costing $30,000. A cash payment of $10,000 was made
immediately; the remainder will be paid in 6 months.
5. Paid $1,800 cash for a one-year insurance policy on the furniture and equipment.
Transactions during the remainder of the month:
6. Purchased basic office supplies for $500 cash.
7. Purchased more office supplies for $1,500 on account.
8. Total revenues earned were $20,000—$8,000 cash and $12,000 on account.
9. Paid $400 to suppliers for accounts payable due.
10. Received $3,000 from customers in payment of accounts receivable.
11. Received utility bills in the amount of $200, to be paid next month.
12. Paid the monthly salaries of the two employees, totaling $5,600.
Instructions
(a) Prepare journal entries to record each of the events listed.
(b) Post the journal entries to Ledger.
(c) Prepare a trial balance as of May 31, 2010.
Question No: 4
Hyzer Disc Golf Course was opened on March 1 by Barry Schultz. The following selected events
and transactions occurred during March:
Mar. 1 Invested $20,000 cash in the business.
3 Purchased Heeren’s Golf Land for $15,000 cash. The price consists of land $12,000, shed $2,000,
and equipment $1,000. (Make one compound entry.)
5 Advertised the opening of the driving range and miniature golf course, paying advertising
expenses of $700.
6 Paid cash $600 for a one-year insurance policy.
10 Purchased golf discs and other equipment for $1,050 from Innova Company payable in 30
days.
18 Received $340 in cash for golf fees earned.
19 Sold 100 coupon books for $10 each. Each book contains 4 coupons that enable the holder to
play one round of disc golf.
25 Withdrew $800 cash for personal use.
30 Paid salaries of $250.
30 Paid Innova Company in full.
31 Received $200 cash for fees earned.
Barry Schultz uses the following accounts: Cash, Prepaid Insurance, Land, Buildings, Equipment,
Accounts Payable, Unearned Revenue, B. Schultz, Capital; B. Schultz, Drawing; Golf Revenue,
Advertising Expense, and Salaries Expense.
Instructions
Journalize the March transactions.
Question No: 5
The ledger of Piper Rental Agency on March 31 of the current year includes the following selected
accounts before adjusting entries have been prepared.
Debit
Credit
Prepaid Insurance
$ 3,600
Supplies
2,800
Equipment
25,000
Accumulated Depreciation—Equipment
$ 8,400
Notes Payable
20,000
Unearned Rent Revenue
9,900
Rent Revenue
60,000
Interest Expense
–0–
Wages Expense
14,000
An analysis of the accounts shows the following.
1. The equipment depreciates $400 per month.
2. One-third of the unearned rent revenue was earned during the quarter.
3. Interest of $500 is accrued on the notes payable.
4. Supplies on hand total $700.
5. Insurance expires at the rate of $200 per month.
Instructions
Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly.
Additional accounts are: Depreciation Expense, Insurance Expense, Interest Payable, and
Supplies Expense.
Question No: 6
Andy Wright, D.D.S., opened a dental practice on January 1, 2010. During the first month of
operations the following transactions occurred.
1. Performed services for patients who had dental plan insurance. At January 31, $875 of such
services was earned but not yet recorded.
2. Utility expenses incurred but not paid prior to January 31 totaled $520.
3. Purchased dental equipment on January 1 for $80,000, paying $20,000 in cash and signing a
$60,000, 3-year note payable. The equipment depreciates $400 per month. Interest is $500 per
month.
4. Purchased a one-year malpractice insurance policy on January 1 for $12,000.
5. Purchased $1,600 of dental supplies. On January 31, determined that $400 of supplies were
on hand.
Instructions
Prepare the adjusting entries on January 31. Account titles are: Accumulated Depreciation—
Dental Equipment, Depreciation Expense, Service Revenue, Accounts Receivable, Insurance
Expense, Interest Expense, Interest Payable, Prepaid Insurance, Supplies, Supplies Expense,
Utilities Expense, and Utilities Payable.
Question No: 7
Tony Masasi started his own consulting firm, Masasi Company, on June 1, 2010. The trial balance
at June 30 is shown below.
MASASI COMPANY
Trial Balance
June 30, 2010
Account Number
Debit
Credit
10
1 Cash
$ 7,150
112 Accounts Receivable
6,000
126 Supplies
2,000
130 Prepaid Insurance
3,000
157 Office Equipment
15,000
201 Accounts Payable
$ 4,500
209 Unearned Service Revenue
4,000
301 T. Masasi, Capital
21,750
400 Service Revenue
7,900
726 Salaries Expense
4,000
729 Rent Expense
1,000
$38,150
$38,150
In addition to those accounts listed on the trial balance, the chart of accounts for Masasi
Company also contains the following accounts and account numbers: No. 158 Accumulated
Depreciation—Office Equipment, No. 212 Salaries Payable, No. 244 Utilities Payable, No. 631
Supplies Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 732
Utilities Expense.
Other data:
1. Supplies on hand at June 30 are $600.
2. A utility bill for $150 has not been recorded and will not be paid until next month.
3. The insurance policy is for a year.
4. $2,500 of unearned service revenue has been earned at the end of the month.
5. Salaries of $2,000 are accrued at June 30.
6. The office equipment has a 5-year life with no salvage value. It is being depreciated at $250
per month for 60 months.
7. Invoices representing $1,000 of services performed during the month have not been recorded
Required:
Pass Adjusting Entries
Download