KOHAT UNIVERSITY OF SCIENCE & TECHNOLOGY (KUST)

INSTITUTE OF BUSINESS STUDIES

Principle of Accounting BS-161- BS ACCOUNTING & FINANCE – 3rd - OPEN BOOK ONLINE

MID Semester Examination-1

Maximum Marks: 30 Maximum Time: 24 Hours (10-00 AM)

Note: Answer sheet to be SUBMITTED within stipulated time. Attempt all questions:

INSTRUCTIONS FOR SUBMISSION: After you solve your paper,

1. Scan clearly THE ANSWER SHEET 2. CONVERT IT TO PDF

3. UPLOAD ON YOUR KCMS AND SUBMIT…. but in case of any problem with kcms then submit

Email: Sajjad hussain@kust.edu.pk . Hard copy to be submitted as per Directives of authorities.

Q-1. Given below are the transactions for HMC an advertising agency during the month of January,2019.

Jan 1 Jaseema invested $10000 in her own advertising agency.

2 Rented an office, paying two months’ rent in advance $ 800.

4 Purchased art equipment for $ 4200.

5 Purchased office equipment from MM EQUIPMENT for $3000.paing $ 1500 in cash and agreed to pay the rest

the next month.

6 Purchased on credit art supplies for $ 1800 and office supplies for $ 800 from TS COMPANY.

8 Paid TS COMPANY $ 1000 of the amount owed.

10 Performed a service by placing advertisements for an automobile dealer in the newspaper and collected a fee of

$ 1400.

15 Paid the secretary two weeks salary $600.

19 Performed a service by placing advertisement for WAHAB DEPARTMENTAL STORES. The earned fees of

$ 2800 will be collected in coming month.

25 Owner withdrew $ 1400 from the business for personal expenses.

29 Paid utilities bill of $ 100 to PESCO.

30. Received but did not paid a telephone bill of $ 70 to PTCL.

Required: Prepare journal entries after analysis. ( 12 MKS)

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Q 2: The MAJOR items of the LONDON BOOKS as of December 31, 2019 are shown

below in random order

Books $ 12000 Fridge 1 300

D .C. Inverters 3000 Microwave Oven 100

Software’s 1000 Vehicles 6000

Magazines 200 Water Dispensers 100

Office Equipment……… 1,200 Furniture 1600

Fixture 1500 Furnishings 700

Accounts Payable………. 2,800 Building………..……… 1 60, 000

Accounts Receivable… 4,700 Saeed”s Capital…… ?

Cash in office 1 300 Notes Payable……………. 2, 360

Cash at bank 4000 Stationary 12000

Newspapers 1000 Income Taxes Payable 2000

Required: a) You are to prepare the balance sheet for the company using the liquidity order. ( 05 Mks)

b) You must compute the amount for saeed , Capital. (03 Marks)
c) Comment on financial health-solvency-liquidity of the business ( 02 marks)

Q.3 -THE TRANSACTIONS OF ABC LAW SCHOOL FOR THE MONTH OF OCTOBER,2019, ARE

LISTED BELOW:

1. OWNER BEGINS HIS NEW BUSINESS BY DEPOSITING $2000 IN A BANK ACCOUNT.

2. PURCHASED A LAW LIABRARY FOR $ 900 CASH.

3. PURCHASED OFFICE SUPPLIES $400 ON CREDIT.

4. ACCEPTED $ 500 IN CASH FOR COMPLETING A CONTRACT.

5. BILLED CLIENTS $ 950 FOR SERVICES RENDERED DURING THE MONTH.

6. PAID $ 200 OF THE AMOUNT OWED FOR OFFICE SUPPLIES.

7. COLLECTED $ 250 IN CASH FROM ONE CLIENT PREVIOUSLY BILLED FOR SERVICES

RENDERED.

8. PAID FOR RENT ,UTILITIES & OTHER EXPENSES FOR $ 1200 DURING THE MONTH.

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REQUIRED:

a) SHOW EFFECTS OF ABOVE MENTIONED TRANSACTIONS ON BASIC ACCOUNTING

EQUATION ASSETS = LIABILITIES + EQUITY ( 8 MKS)

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