Assignment for 2021

January June 2021

Problem
Larry Hill began a real state agency he called Rockhill Realty; and during the month of March, he
completed the following transactions:
March 1 Began business by investing Tk. 40000 in cash.
2 Purchased a small office building and the office equipment of Western Realty, consisting of
office equipment Tk. 4000; Land Tk. 14000; and building Tk. 48000. He paid Tk. 18000 in
cash for office equipment & land and signed a 3-month mortgage contract for building to
pay the balance.
3 Paid Tk. 2400 for two years insurance.
4 Took his personal automobile, which had a Tk. 5500 fair value, for permanent and exclusive
use in the business.
5 Earned and collected a Tk. 5300 commission from the sale of a house.
7 Purchased office supplies Tk. 750 and office equipment Tk. 2500 from Office supply
Company on credit.
9 Paid the salary of the office secretary Tk. 400.
10 Completed property management services for Neal Able on credit Tk. 600.
11 Paid Office Supply Company for the items purchased in transaction (7).
14 Received Tk. 1600 as commission in advance to settle a deal in April.
15 Received Tk. 60 from Neal Able for the services of transaction (10).
18 Purchased additional office supplies on credit Tk. 650.
22 Earned and collected a Tk. 2700 commission from the sale of a building lot.
27 Paid the salary of the office secretary Tk. 400.
28 Paid for newspaper advertising that has appeared Tk.185
29 Paid the telephone bill Tk. 250.
30 Larry Hill withdrew Tk.250 from the business for personal expenses.
Requirement 1:
Show the effects of the transactions on the accounting equation by arranging the following
accounts: Cash; Accounts Receivable; Office Supplies; Office Equipment; Prepaid Insurance;
Automobile; Land; Building; Accounts Payable; Mortgage Payable; Larry Hill, Capital; Larry
Hill Withdrawals; Commissions Earned; Unearned Commission; Management Fees Earned;
Advertising Expense; Salaries Expense; and Telephone Expense. You may choose/reduce
additional account title.
Requirement 2:
Using the data in the problem; journalize the transactions.
Requirement 3:
Refer to the data in requirement no. 2; prepare necessary ledger accounts.
Requirement 4:
Refer to data in requirement no. 3; prepare a trial balance sheet.
Requirement 5:
Refer to data in requirement no. 4 and using the following additional information, prepare and
post adjusting entries to the ledger accounts and generate an adjusted trial balance.
Additional information:
i. On March 2, the mortgage was signed for three months. The interest rate is 12% PA.
ii. The office equipment has a 4-year useful life where as the office building has 12 years.
iii. On March 31, the value of the unused office supplies is Tk. 25.
iv. A part of the office building is unused and rented it to a shopper on March 3 with a monthly
rent of Tk. 300.
v. There were Tk. 295 of commission earned but it is unrecorded and unpaid.
vi. The insurance is paid for two years commencing on March 1.
vii. The business employed two workers Tk. 350 each on daily basis on March 27 and they have
worked for 3 days and have not yet paid.
viii. The utility bill for Water and Gas Tk. 175 received on March 31.
Requirement 6:
(a) Refer to data in requirement 5; prepare a worksheet for the month of March.
(b) Refer to data in requirement 5; Prepare the income statement and owner’s equity statement
and a classified balance sheet for March.
Requirement 7:
Refer to data in requirement 6; Journalize and post closing entries and complete the closing
process.
Requirement 8:
Refer to data in requirement 7; prepare a post-closing trial balance for March.

IMPORTANT NOTE:
1. Assignment must be hand-written both sided on A-4 size paper.
2. Last date of Submission :
3. Submitted to : Shah Mahmud Sumon
Assistant Professor
Department of Accounting and Information Systems
Patuakhali Science and Technology University