ACCOUNTANCY FOR LAWYERS – PRACTICE QUESTIONS

1) Exercise 1
After several years searching for a job, Kabode started a haircutting business
called Shine &Smile. The following events occurred during its first months of
business.
On May 1, Invested Shs 5,000,000 and Shs 3,000,000 of equipment in Shine & smile
On May 2, Shine & Smile paid Shs 500,000 cash for furniture for the shop
On May 5, Shine & Smile paid Shs 1,000,000 cash for rent space for four months
On May 6, He purchased Shs 500,000 of equipment for the shop on credit (using a
long term note payable)
On May 9, Shine & Smile opened the business. Cash received from haircutting
services in the first one week Shs 500,000.
On May17, He provided haircutting services of Shs 100,000 on account
On May 20, He received a cheque of Shs 80,000 for services previously rendered
on account
On May 25, Paid Shs 200,000 cash to an assistant for hours worked during the grand
opening
On May 29, Cash received from services provided Shs 600,000
On May 30, He paid Shs 500,000 installment towards principal on the note payable
into on September 6.
On May 30, made a cash withdrawal Shs 50,000 from the business for personal use.
Required:
Prepare an accounting equation for the above transaction.

2) Exercise 2
David Onsombi started the Onsombi Co. a new business that begun on June 1.
The Onsombi Co. completed the following transactions during its first months of
operations.
June 1 D. Onsombi invested Shs 50,000,000 cash in the company.
1 The company purchased a rented a furniture office and Shs 2,000,000
2 The company purchased Shs 35,000,000 of office equipment on credit
3 They paid Shs 1,000,000 cash for the cleaning services
4 Provided legal services for a client and immediately collected cash Shs
15,000,000
7 Provided services Shs 10,000,000 for a client on credit
10 Paid Shs 300,000 for an assistant’s salary
12 Provided services Shs 5,000,000 on credit
16 Received a cheque Shs 8,000,000 for the services provided on credit
20 paid a cheque Shs 2,000,000 for the office equipment purchased on credit
22 Company paid Shs 250,000 for office utilities
25 Onsombi withdrew Shs 2,000,000 from the business for personal use.
Required:
Prepare an accounting equation from the above transactions.
 3) Exercise 3
Acham is a businessperson dealing in general merchandise .Below is the transactions
for the month of January 2018.
On January 1 Acham started business with;
Cash at hand Shs 50,000,000
Cash at bank Shs 30,000,000
Inventory Shs 5,000,000
Motor vehicles Shs 16,000,000
Furniture Shs 2,000,000
On January 2 The Company rented office space Shs 2,000,000 by cheque
3 Purchased goods Shs 10,000,000 on credit
4 Purchased a delivery van Shs 24,000,000. Paid Shs 10,000,000 cash and
Shs 14,000,000 by cheque
5 Sold goods of Shs 5,000,000 at Shs 8,000,000 cash
6 Purchased stationery Shs 1,000,000 cash
8 Secured a bank loan Shs 50,000,000 from Centenary bank.
12 paid salaries Shs 3,500,000 cash
15 Purchased goods Shs 25,000,000 on credit
16 Sold goods Shs 28,000,000 at Shs 30,000,000 on credit
17 Made part payment for the goods purchased on credit Shs 15,000,000
by cheque
18 paid utilities Shs 500,000 cash
22 Sold goods Shs 5,000,000 at Shs 7,000,000 by cheque
25 Made repairs to motor vehicles Shs 2,000,000 cash
28 Received a cheque from a credit customer Shs 20,000,000
29 Deposited into the bank Shs 2,000,000
30 Withdrew from her personal savings Shs 1,000,000 and bought for the
mother a gift
Required:
 Prepare an accounting equation for each of the above transactions
Exercise 4

Kyeswa commenced a Hardware enterprise on March 1 with UGX 50,000,000 on his

account in Stanbic Bank. The following transactions were carried out in that month.

Mar 2 Purchased goods of UGX10, 000,000 from Bridgestone Ltd on Credit.

3. Withdrew UGX3, 000,000 from the bank and kept it in the safe as petty cash.

5. Sold goods worth UGX5, 000,000 to Mukozi who paid UGX2, 000,000 by cheque;
UGX1, 500,000 cash and issued a notes receivable for the balance.

7. Bought land of UGX8, 000,000 by cheque from Akright Ltd to construct the
business premises

9. Paid a salary cheque of UGX800, 000 to his accountant

11 Returned goods of UGX100, 000 to Bridgestone Ltd because they had

damages

13. Paid insurance to A.I.G of UGX200, 000 cash

15 Purchased goods worth UGX7, 000,000 from Kiseka Market and issued a Notes
Payable.

17 Mukozi rejected and returned defective goods worth UGX300, 000.

18 Paid Bridgestone a cheque of UGX6, 000,000 for goods purchased on credit.

19 Received a cheque of UGX500, 000 from Mukozi for goods sold to him.

21 Disposed off Part of the land at UGX2, 000,000 cash because it was redundant.

22 A cheque from Mukozi bounced because there were insufficient funds on his
account.

23 Paid rent of UGX600, 000 cash.

25 Sold goods to Kiyembe Ltd for UGX2, 000,000 on credit

27 Mukozi Paid 400,000 cash for goods sold to him on credit.

29 Purchsed goods of UGX4, 800,000 from City tyres on credit

30 Received a cash of UGX1, 000,000 from Kiyembe Ltd to clear his debt.

31 Used business cash of UGX 200,000 to organize a dinner party at Fang-fang

Restaurant for his employees.

Required

Enter the above transactions in the general Journal.