Hu, CBE, Department of Accounting and Finance

Assignment on Course: Fundamentals of Accounting I

1st Assignment Questions to be Done Individually:
Question #1.
Presented below are selected information related to Now Company at December 31, 2014. Now reports
financial information monthly.
Equipment £10,000 Utilities Expense £ 4,000
Cash 8,000 Accounts Receivable 9,000
Service Revenue 36,000 Salaries and Wages Expense 7,000
Rent Expense 11,000 Notes Payable 16,500
Accounts Payable 2,000 Dividends 5,000
Required:
(A) Determine the total assets of Now at December 31, 2014.
(B) Determine the net income that Now reported for December 2014.
(C) Determine the equity of Now at December 31, 2014.

Question #2.
Nahu Services Company was incorporated on July 1, 2014. During the first month of operations, the following
transactions occurred.
1. Mr. Dawit invested $10,000,000 in cash in exchange for ordinary shares of Legal
Services Company.
2. Paid $800,000 for July rent on office space.
3. Purchased office equipment on account $3,000,000.
4. Provided legal services to clients for cash $1,500,000.
5. Borrowed $700,000 cash from a bank on a note payable.
6. Performed legal services for client on account $2,000,000.
7 . Paid monthly expenses: salaries $500,000, utilities $300,000, and advertising $100,000.
8. Mr. Dawit withdraws cash of $100,000 from the business for his personal use.
Required
(A) Show the above effect of events (transactions) on the elements of financial statement (on account).
(B) Prepare the income statement, retained earnings statement, and statement of financial position at July 31
for Legal Services Company.

Question #3.
Lemma’s Repair Ltd. was started on May 1. A summary of May transactions is presented below.
1. Shareholders invested £10,000 cash in the business in exchange for ordinary shares.
2. Purchased equipment for £5,000 cash.

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3. Paid £400 cash for May office rent.
4. Paid £500 cash for supplies.
5. Incurred £250 of advertising costs in the Beacon News on account.
6. Received £4,700 in cash from customers for repair service.
7. Declared and paid a £1,000 cash dividend.
8. Paid part-time employee salaries £1,000.
9. Paid utility bills £140.
10. Provided repair service on account to customers £980.
11. Collected cash of £120 for services billed in transaction (10).
Required:
(A) Prepare a tabular analysis of the transactions, in terms of their effect on the elements of
financial statement. Include margin explanations for any changes in Retained Earnings.
(B) Prepare financial statements for the business for the accounting period.

Question# 4.
On November 1, 2014, the account (ledger) balances of Samone Equipment Repair, Inc. were as follows.
Account No. Account Debit Account No. Account Credit
101 Cash $ 2,400 158 Accumulated Depreciation—Equipment $ 2,000
112 Accounts Receivable 4,450 201 Accounts Payable 2,600
126 Supplies 1,800 209 Unearned Service Revenue 1,360
157 Equipment 16,000 212 Salaries and Wages Payable 700
311 Share Capital—Ordinary 10,000
Total $ 24,650 320 Retained Earnings 7,990
Total $24,650
During November, the following summary transactions were completed.

Nov. 8. Paid $1,500 for salaries due employees, of which $700 is for October salaries.
10. Received $3,420 cash from customers on account.
12. Received $3,100 cash for services performed in November.
15. Purchased equipment on account $2,000.
17. Purchased supplies on account $700.
20. Paid creditors on account $2,700.
22. Paid November rent $500.
25. Paid salaries $1,500.
27. Performed services on account and billed customers for services provided $1,900.
29. Received $350 from customers for future service.
Adjustment data consist of:

1. Supplies on hand $1,400.

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 2. Accrued salaries payable $350.
3. Depreciation for the month is $200.
4. Unearned service revenue of $1,380 is recognized for services performed.
Instructions
A. Enter the November 1 balances in the ledger accounts.
B. Journalize the November transactions.
C. Post to the ledger accounts. Use J1 for the posting reference. Use the following additional accounts:
No. 400 Service Revenue, No. 631 Supplies Expense, No. 711 Depreciation Expense, No. 726 Salaries
and Wages Expense, and No. 729 Rent Expense.
D. Prepare a trial balance at November 30.
E. Journalize and post adjusting entries.
F. Prepare an adjusted trial balance.
G. Prepare an income statement and a retained earnings statement for November and a statement of
financial position at November 30.

Question#5.
1. Given below is a list of selected transactions performed by John Décor during the month of September
2016, the first month of operation.
Sept. 10 Mr. John transferred cash from his personal account to be used in the business, Birr 10,000.

“ 10 Paid rent for the month, Birr 500

“ 11 Purchased a truck for Birr 12,000 by paying Birr 3,000 Cash and giving a notes payable for the difference.

“ 12 Purchased equipment on account Birr 1,460.

“ 13 Purchased supplies on account Birr 240.

“ 14 Paid insurance premiums of Birr 170 (Dr. prepaid insurance)

“ 15 Received cash for services completed Birr 360.

“ 16 Purchased Supplies on account Birr 240.

“ 18 Paid salaries of Birr 900.

“ 21 Paid its liabilities for the purchase of equipment

“ 24 Recorded sales on account Birr 2,080

“ 26 Received an invoice for truck expense Birr 115

“ 27 Paid utilities expense Birr 205.

“ 27 Paid miscellaneous expenses Birr 73.

“ 28 Received cash from customers on account birr 1,420

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 “ 30 Paid salaries to employees Birr 950

“ 30. The owner withdrew Birr 1, 750 for personal use.

Required:

1. Record the transactions in General Journal

2. Post each entry to the perspective account. Use the four – column account.
3. Prepare a trial balance
4. Prepare a worksheet. Assume the following adjustment for the accounts and journalize them.
5. Prepare a Balance sheet, Income statement and statement of owner’s equity
6. Close the temporary accounts.

Question#6.
The Badger Motel, Inc. opened for business on May 1, 2014. Its trial balance before adjustment on May 31 is
as follows.
Badger Motel, Inc.
Trial Balance
May 31, 2014

Account Number Account Debit Credit

101 Cash $ 2,500
126 Supplies 1,520
130 Prepaid Insurance 2,400
140 Land 14,000
141 Buildings 58,000
157 Equipment 15,000
201 Accounts Payable $ 4,800
208 Unearned Rent Revenue 3,300
275 Mortgage Payable 38,000
311 Share Capital—Ordinary 40,000
429 Rent Revenue 12,300
610 Advertising Expense 780
726 Salaries and Wages Expense 3,300
732 Utilities Expense 900
Total $98,400 $98,400
In addition to those accounts listed on the trial balance, the chart of accounts for Badger Motel, Inc. also
contains the following accounts and account numbers: No. 142 Accumulated Depreciation—Buildings, No.
158 Accumulated Depreciation—Equipment, No. 212 Salaries and Wages Payable, No. 230 Interest Payable,
No. 631 Supplies Expense, No. 711 Depreciation Expense, No. 718 Interest Expense, and No. 722 Insurance
Expense.
Other data:
1. Prepaid insurance is a 1-year policy starting May 1, 2014.
2. A count of supplies shows $350 of unused supplies on May 31.
3. Annual depreciation is $2,640 on the buildings and $1,500 on equipment.

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 4. The mortgage interest rate is 12%. (The mortgage was taken out on May 1.)
5. Two-thirds of the unearned rent revenue has been recognized for services performed.
6. Salaries of $750 are accrued and unpaid at May 31.
Instructions
A. Journalize the adjusting entries on May 31.
B. Prepare a ledger using the three-column form of account. Enter the trial balance amounts
and post the adjusting entries. (Use J1 as the posting reference.)
C. Prepare an adjusted trial balance on May 31.
D. Prepare an income statement and a retained earnings statement for the month of May and a
statement of financial position at May 31.

Question#7.
Mark owns and manages a computer repair service, which had the following trial balance on December 31, 2013 (the
end of its fiscal year).

Byte Repair Service, Inc.

Trial Balance
December 31, 2013
Cash $ 8,000
Accounts Receivable 15,000
Supplies 13,000
Prepaid Rent 3,000
Equipment 21,000
Accounts Payable $19,000
Share Capital—Ordinary 30,000
Retained Earnings 11,000
Total $60,000 $60,000
Summarized transactions for January 2014 were as follows.

1. Advertising costs, paid in cash, $1,000.

2. Additional supplies acquired on account $4,000.
3. Miscellaneous expenses, paid in cash, $1,700.
4. Cash collected from customers in payment of accounts receivable $13,000.
5. Cash paid to creditors for accounts payable due $15,000.
6. Repair services performed during January: for cash $5,000; on account $9,000.
7. Wages for January, paid in cash, $3,000.
8. Dividends during January were $2,000.

Instructions

A. Open T-accounts for each of the accounts listed in the trial balance, and enter the opening balances for 2014.
B. Prepare journal entries to record each of the January transactions. (Omit explanations.)
C. Post the journal entries to the accounts in the ledger. (Add accounts as needed.)
D. Prepare a trial balance as of January 31, 2014.

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2nd Assignment
1. Individual Assignment :
 Do the exercises given at the end of chapter 3, 4, and 5.

2. Review the contents in chapters 4 and 5 according to the topics listed on the course out line listed
below.

4. Accounting Systems
4.1. Manual and computerized Accounting systems and Enterprise Resource Planning
4.2. Subsidiary ledgers and controlling accounts
4.3. Special journals and vouchers
5. Cash and Receivables
5.1. Internal control over cash
5.2. Bank reconciliation
5.3. Petty cash and change funds
5.4. Classifications of receivables
5.5. Internal control of receivables
5.6. Accounting for uncollectible accounts
5.7. Accounting for notes receivable
5.8. Presentation of cash and receivables on the statement of financial position
Note:

 Get the review of literatures on the topics from different authorized sources.
 All sources are required to be cited in the text and listed in the reference page.
 The report should have cover page, table of content, introduction (i.e objectives and
significance), methods (any procedure used to finalize this assignment), conclusion and
references.
 Any similar (Copied) work will result Penalty.
 It will be Submitted a week before the last class (end of the class).

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