Faculty of Economics and Administrative Sciences

Department of Banking and Finance

BUS 231 – Financial Accounting 1

STUDENTS’ NAME SURNAME : Date: 117/12/2020

Time: 11:45-12:45
STUDENTS’ ID NUMBER: Exam Hall: Online
Lecturer: Sidita Reshketa

MID-TERM EXAM

Group A

PART 1: Adjusting Entries

DXC Texhnology offers technological solutions to Pfizer. DXC Technology prepares the
adjusting entries on monthly base. Please journalize the transactions below. (40 points)

1. On March 1st 2019, DXC Technology purchased a notes payable of 400.000 USD
with a monthly interest rate of 1%. This notes payable will be repaid together
with the interest expenses on February 28, 2020.
a. Prepare the journal entry for March 1st 2020
Date Account Debit Credit

         

b. Prepare the journal entry for December 31st ,2020

Date Account Debit Credit

         

c. Prepare the journal entry for February 28th ,2020

Date Account Debit Credit

         

d. If the payment date was 1st of March 2020, how would you prepare your journal
entry?
Date Account Debit Credit

         

EU-FRM-010-002-EN Pub. Date: 23/03/2010 Upd: 00

 Faculty of Economics and Administrative Sciences
Department of Banking and Finance
BUS 231 – Financial Accounting 1

2. On July 1st 2019 Pfizer made a payment of 60.000 USD for the services that will
be offered for the next three months.
a. Prepare the journal entry for 1st of July for Pfizer journal (Pfizer also prepares its
adjusting entries on monthly basis).
Date Account Debit Credit

         

b. If during the first two month DXC Technology has offered 50.000 USD what should you
journal entry look like on 30 of September for the DXC Technology books?

Date Account Debit Credit

         

3. DXC Technology purchased its machineries on 1 of January 2016 for 400.000

USD and it will be used for 6 years.
a. Calculate the balance of Accumulated Depreciation on 1st of January of 2019.
(The adjusting entries are done on Monthly basis)

b. Prepare the adjusting entry for December 31st 2019.

Date Account Debit Credit

         

EU-FRM-010-002-EN Pub. Date: 23/03/2010 Upd: 00

 Faculty of Economics and Administrative Sciences
Department of Banking and Finance
BUS 231 – Financial Accounting 1

PART 2 : Periodic and Perpetual Inventory System

1. Company uses periodic inventory system and some information about the company
such as:
Inventory on hand on 31 December 2018 is $6.000
During 2019, purchases of merchandise is $10.000
Inventory on hand on 31 December 2019 is $400

Please compute the Cost of Goods sold for 2019 and make required journal entry on December
31, 2019.

Date Account Debit Credit

         

EU-FRM-010-002-EN Pub. Date: 23/03/2010 Upd: 00

 Faculty of Economics and Administrative Sciences
Department of Banking and Finance
BUS 231 – Financial Accounting 1

2. Shpresa Al (company) sells electronic devices to individuals. During November, the

company made transactions as follows:

Prepare journal entries of Shpresa Al (company) for November 1, November 2,

November 4, November 5 and November 29. For November 1st and November 2nd use
subsidiary ledger accounts. Assume that the company uses the perpetual inventory
system in sales and net cost method in purchases. (35 points) (Please show the
calculations)

November 1 Company sold 15 computers to Epoka University at $150 each on account

with the term 3/10, n/30. The cost of the tablet is $130 each.

Date Account Debit Credit

         

November 2 Epoka University returned 2 tablets to Shpresa al. due to some defects on
them.

Date Account Debit Credit

         

November 4 Company purchased some computers on account from Globe, for $60,000.
Credit Terms are, 2/10 n/60.

Date Account Debit Credit

         

November 5 Epoka University paid for the purchase in November 1 st

Date Account Debit Credit

EU-FRM-010-002-EN Pub. Date: 23/03/2010 Upd: 00

 Faculty of Economics and Administrative Sciences
Department of Banking and Finance
BUS 231 – Financial Accounting 1

         

November 29 Company paid to Globe for the purchase dated September 4.

Date Account Debit Credit

         

EU-FRM-010-002-EN Pub. Date: 23/03/2010 Upd: 00

 Faculty of Economics and Administrative Sciences
Department of Banking and Finance
BUS 231 – Financial Accounting 1

PART 3: Income Statement, Balance Sheet and Closing Entries

DXC Technology has the following Trial Balance on December 31 st 2019.

Accounts Debit Credit

CASH 2,500  
Account Receivable 5,500  
Office Supplies 250  
Prepaid Insurance 150  
Prepaid Rent 805  
Machinery 900  
Accumulated Depreciation   600
Accounts Payable   400
Interest Payable   300
Unearned Revenues   450
Salaries Payable   400
Capital Stock   7,000
Dividend 500  
Retained Earnings   410
Service Revenues   5,000
Insurance Expense 3,100  
Depreciation Expense 300  
Utility Expense 400  
Office Supplies Expense 155  
     
Total 14,560 14,560

EU-FRM-010-002-EN Pub. Date: 23/03/2010 Upd: 00

 Faculty of Economics and Administrative Sciences
Department of Banking and Finance
BUS 231 – Financial Accounting 1

a. Please prepare the Income statement

Income Statement
Revenues

Expense

b. Please close the temporary accounts

Date Accounts Debit Credit

Step 1+ Step 2

Step3

Step 4

         
         

EU-FRM-010-002-EN Pub. Date: 23/03/2010 Upd: 00

 Faculty of Economics and Administrative Sciences
Department of Banking and Finance
BUS 231 – Financial Accounting 1

c. Please prepare the balance sheet

Balance Sheet
Assets Liabilities and Owners Equity
Assets Liabilities

Owners Equity

Total Assets Total Liabilities and Owners Equity

EU-FRM-010-002-EN Pub. Date: 23/03/2010 Upd: 00