Financial Accounting II ACC112

Financial Accounting I

ACC112

TEST ONE REVISION

Prepared By:
S.Mujtaba Hashim , Redha Abdullah , Mahdi
Manssi

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EX1: Office Mart has assets equal $123,000 and liabilities $53,000 at year-
end what is the total equity for office Mart at year-end:

Ex2: At the beginning of the year. Logan Company’s assets are $200,000
and its equity is 150,000 During the year .assets increase $70,000 and
liabilities increase $30,000 what is the equity at the end of the yearn?

Ex3: Owner's equity and total assets were $32,000 and $97,000 at the
beginning of the period. Assets increased 50% and liabilities decreased
60% during the period. what is owner's Equity at the end of the period?

Ex4: Zion Company has assets of $600,000, liabilities of $250,000, and

equity of $350,000. During the year they buy office equipment on credit for $75,000.
Calculate the liabilities at the end pf year?

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Ex5: On September 30, 2016, Abdulla Dental Clinic records show the
following items and amounts.

Abdulla, Capital, September 1 $42,000

Accounts payable 7,000

Equipment 25,000
Furniture 5,000
Service revenue 25,000
Abdulla, withdrawals 6,000
Dental Supplies expense 3,500
Cash 6,000
Utilities expense 450
Insurance expense 100
Wages expense 150
Dental supplies 2,800
Salaries expense 9,000
Accounts receivable 14,000
Rent expense 2,000

Required:
Use the above information to prepare

a. an income statement for the month ended September 30, 2016.

b. a balance sheet as at September 30, 2016.

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a. Income statement
Abdulla Dental Clinic
Income statement
For the month ended September 30, 2016

b. Statement of Owners Equity

Abdulla Dental Clinic
Statement of owners Equity
For the month ended September 30, 2016

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b. Balance sheet

Abdulla Dental Clinic

Balance Sheet
September 30, 2016

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Ex6: The following are the balances for flowers company’s accounts at the
end of 2017:

Account Balance Account Balance

Capital $310,000 Cash $230,000
Salaries Expenses $130,000 Utilities Expenses $15,000
Accounts Receivable $75,000 Office supplies $90,000
Accounts Payable $40,000 Consulting fees $200,000
Withdrawals $20,000 Rent payable $10,000

Required: Prepare: 1- Income statement, 2- Statement of owner’s equity,

3- Balance sheet.

1- Income statement
flowers company’s
Income statement
For the year ended December 31, 2017

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2- Statement of Owners Equity

flowers company’s
Statement of Owner’s Equity
For the year ended December 31, 2017

3- Balance sheet
flowers company’s
Balance Sheet
For the year ended December 31, 2017

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Ex7: The following are balances for Redha & Mahdi corporation accounts
at the year end of 2018:

ACCOUNTS BALANCE

Capital 100,000
Cash 160,000
Account payable 30,000
Equipment 20,000
Land 10,000
Withdrawls 5,000
Wages Expense 15,000
Wages Payable 55,000
Service Revenue 10,000
Consulting Fees 25,000
Utilities Expense 10,000

Required: Prepare the three Financial statements.

1- Income statement
Redha & Mahdi corporation’s
Income statement
For the year ended December 31, 2018

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2- Statement of Owners Equity

Redha & Mahdi corporation’s
Statement of Owner’s Equity
For the year ended December 31, 2018

3- Balance sheet
Redha & Mahdi corporation’s
Balance Sheet
For the year ended December 31, 2018

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Chapter 2:

Ex8: Selected transactions for Noor Company for the month of October (the first
month of operations) are presented below. Journalize each transaction and
identify each transaction by number.

1- Invested $40,000 cash and $10,000 Equipment in the busines.

2- Purchased equipment costing $12,000 for $3,000 cash and the
remainder on credit.
3- Purchased office supplies for $500 cash.
4- Paid $1,000 for a one-year insurance policy.
5- Received $3,000 cash for services performed.
6- Received $4,000 for services previously performed on account.
7- Paid wages to employees for $2,500.
8- Noor withdrew $1,000 cash from the business.

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Date Debit Credit

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EX9: Maria Sanchez began business as Sanchez Law Firm on November 1.

Record the following November transactions by
prepare: A) General Journal entries to recorded transactions.
B) Open the ledger (T-Account) for the following entries.
C) Trial Balance.

a) Sanchez invested $15,000 cash and an office supplies valued at

$6,000.
b) Purchased $7,500 of office equipment from Johnson Bros. on credit.
c) Completed legal work for a client and received $1,500 cash in full
payment.
d) Paid Johnson Bros. $3,500 cash in partial settlement of the amount
owed.
e) Completed $4,000 of legal work for a client on credit.
f) Sanchez withdrew $2,000 cash for personal use.
g) Received $2,500 cash as partial payment for the legal work completed
for the client in (e).
h) Paid $2,500 cash for the legal secretary's salary.

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A)

Date Debit Credit

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B)

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C)
Trial Balance

A/C titles Debit Credit

Totals

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Ex10: Prepare the general journal to record the following transactions

during July 2018:

- 1 July The owner establishes the business by investing in 250,000 Cash

and 400,000 for the equipment.
- 7July The Company purchased supplies for $ 70, 000; half cash and
half on account.
- 15JulyThe Company provided service for a customer and earned
$12000to be collected after one month.
- 21 July The Company paid rent S8, 000 cash.
- 28 July The owner withdrew $ 3, 000 from supplies for his personal
use.

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Date Debit Credit

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Ex11: On March12, 2013 Noora had started her company consultation

office by investing $ 40,000 cash and $ 10,000 furniture During the month
of March, her office had the following events:

On March 14, it purchased equipment for $ 12,000 on account.

On March 16, it provided services for a client for $ 5000 cash.
On March 18, it provided services for another client for $ 6000 on credit.
On March 20, it paid $ 1,500 cash for rent expense.
On March 25, it collected $ 4,000 cash from the client for the services
provided on March 18.
On March 28, Noora withdrew $ 500 cash for personal use.
Required:
1-Use the Journal below to record the above transactions of Noora’s
office. (No need to explain journal entries)
2-Post the entries related to the cash account and find its balance at the
end of March.

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1)

Date Debit Credit

2) Ledger (only for cash)

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Chapter 3:

Ex12: Prepare journal entries on December 31 to record the following

unrelated year-end adjustments.

a. Depreciation on office equipment for the year, $4,000.

b. The Prepaid Insurance account has a $3,680 debit balance before
adjustment. An examination of insurance policies shows $950 of
insurance expired.
c. The Prepaid Insurance account has a $2,400 debit balance before
adjustment. An examination of insurance policies shows $600 of
unexpired insurance.
d. The company has Wage expenses of $4,000 have been incurred but not
paid as of December 31.
e. On November 1, the company received 6 months' rent in advance from
a customer whose rent is $700 per month. The $4,200 was credited to the
Unearned Rent account.

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Date Debit Credit

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EX13: The following transactions were taken from Gulf Company's books at
December 31,2017 :
(A) Accrued salaries on December 31 amount $5000.
(B) During the current year , clients paid fees in advance for services amounting to
$5000. Of these fees, $3500 remain unearned om December 31.
(C) The supplies account had and $840 debit balance at the beginning of the year. A
physical count of supplies showed $300 of unused supplies available as December
31.
(D) Estimated depreciation of office equipment for the year $4000.
Required: Prepare the adjusting entries for Gulf Company on December 31, 2017.

Date Debit Credit

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Ex14: The following transactions were taken from Red Rose Company 's
books at December 31; the end of the accounting period.

A. Total amount of wages for December (4 weeks) is S60, 000; one -

week wages still not paid yet to the workers.
B. Prepaid Insurance has a debit balance of $ 7, 200; the insurance
policy purchased on July 1 this year to cover 3 years.
C. The Office Supplies account has a debit balance of $ 500 at the
beginning of the year, The Company purchased supplies for $ 9000
during the year. The remaining Supplies at the year - end are $ 2,000.
D. The annual depreciation for Buildings is $ 30, 000.

Required: Prepare the adjusting entries for Red Rose Company on

December 31.

Date Debit Credit

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Ex15: Prepare adjusting entries for the year ended December 31, for
each of these separate situations. Assume that prepaid expenses are
initially recorded in asset accounts and that fees collected in advance
are initially recorded as liabilities.
a. The Prepaid Rent account has a debit balance of $ 12,000 before
adjustment, representing a prepayment for four months’ rent made on
December 1 of the current year.
b. One-third of work related to $ 18,000 of cash received in advance was
performed during this period.
c. Unpaid accrued salaries at December 31 amounts to $ 15,000
d. Work were completed for a client on December 31 in the amount of $
21,000 , but were not previously billed or recorded.
e. Estimated depreciation on office equipment is $ 27,000

Date Debit Credit

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