POA - Assignment -3 (Farhan Mehboob)

QUESTION 1 - For the following transactions prepare the following:

1
2
3
4
5

Journal entries
Ledger accounts
Trial balance
Simplified Income Statement
Simplified Balance Sheet
No.

Date

Particulars

20-01

Jan 01

Started business with Rs. 2,400,000 in cash.

02

Jan 01

Opened a bank account and deposited Rs. 2,340,000 in it.

03

Jan 02

Paid for furniture Rs. 180,000 through cheque.

04

Jan 03

Paid for vehicle Rs. 600,000 through cheque.

05

Jan 05

Bought goods on credit from Mr. A for Rs. 600,000.

06

Jan 06

Sold goods for cash Rs. 720,000.

07

Jan 08

Purchased goods for cash Rs. 240,000.

08

Jan 10

Returned goods of Rs. 120,000 to Mr. A.

09

Jan 12

Sold goods on credit to Mr. B for Rs. 480,000.

10

Jan 18

Mr. B returned goods of Rs. 60,000.

11

Jan 21

Paid through cheque to Mr. A Rs. 300,000.

12

Jan 25

Mr. B Paid through cheque Rs. 240,000.

13

Jan 31

Paid Salaries through cheque Rs. 60,000.

14

Jan 31

Accrued expenses for the month Rs. 240,000.

15

Jan 31

Deposited in bank Rs. 120,000.

Question 2
For the following transactions of Kangal Experts Limited , prepare the Balance Sheet and Income Statement, for the
year ended 31st , December 2008:
Cash
50,000
Capital
1,000,000
Bank Loan 50,000
A/R
50,000
A/P
100,000
Rent 300,000
Furniture
25,000
Retained Earning 600,000
Fees 900,000
Staff salaries
200,000
Utility expenses 50,000
Transportation 25,000
Office supplies
25,000
Bank
25,000
Cultas 650,000
Car (cultas) Loan
350,000
Tax
10%
Net Income ?, Owners Equity ?
Cost of goods sold is 25% of the price charged
Marketable Securities 100,000
Notes Receivable
200,000
Notes Payable 100,000
Marketing expense 25,000

Question 3
For each of the following situations, prepare adjusting entries:
a) Dewalia Corporation provided $100,619 worth of consulting services to the Bogus Bank over the past
month, and today is the end of the accounting period. The consulting hours will be billed and collected
next month, well past when you'll be preparing a trial balance, financial statements, closing entries,
etc. What adjusting entry should you make?
b) Halaku and Laraku Lawyers purchased an annual service contract from you for $240,000, which they
paid up front. Only 3 months of their contract are within this accounting period. In order to properly
reflect reality, you need an adjusting entry.
c) Monthly salaries for Pesaywala Jewelers are 500,000. As usual, they have not paid salaries for the last 4
months, and now they are at the end of the accounting cycle. What adjusting entries do they need to
make.
d) Property insurance is 12,000 annually, which you just paid 4 months ago. Now you are at the end of
the accounting cycle. What, if any adjusting entry will you make.
Question 4
For each of the following mistakes, make the necessary rectification of error entries.
a) The Chief accountant MR M. T. Nutt, made a mistake when receiving 100,000 from a debtor. Instead of
updating the cash account, he mistakenly entered the transaction in the bank book. Help Mr M.T Nutt
to rectify this mistake.
b) The new trainee accountant, Mr I. M. N. Ediot mistakenly entered that the electricity bill of 2, was paid
by cash. When he was fired, he remembered that the correct amount should have been 200,002. As the
new trainee, hired in place of Mr. I M. N. Ediot, you are required to correct this problem.
c) The Financial Manager, Mr I. M. Crazee, is very nervous because he made a mistake and is afraid to tell
anyone. He has bought a computer for 100,000 (for cash), which he entered as 10,000 (cash only) for a
Carborator. He has called you on the mobile, so please help him . . .