Accounting Assigment Report
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ACCOUNTING ASSIGMENT MBA 18/19 Group 1B
Ahmed Ezzat Ali 18124753
Table of Contents Accounting Assignment .......................................................................................................................... 2 Solution ................................................................................................................................................... 3 Journal Entries..................................................................................................................................... 3 T- Account ........................................................................................................................................... 4 Trial Balance ........................................................................................................................................ 5 Adjustment Entries ............................................................................................................................. 5 Post- Adjustment Trial Balance ........................................................................................................... 6 Income Statement .............................................................................................................................. 6 Closing Entries ..................................................................................................................................... 7 Post-Closing Trial Balance ................................................................................................................... 7 Balance Sheet...................................................................................................................................... 8
Page 1|8
Accounting Assignment The following Journal entries occurred in 2017 1) XYZ invested 500,000 in cash in the business. 2) Purchased 7,000 of office supplies in cash. 3) Purchased equipment for 60,000, paying only half of the amount in cash. 4) A customer purchased goods on account for 15,000 5) The owner withdrew 20,000 for personal use. 6) Paid 8,000 in cash for the current month's rent. 7) Paid 10,000 cash as an advance for insurance on the factory for 2 years. 8) Received a bill for 6,000 for advertising for the current year. 9) Paid 50,000 cash for office salaries and wages. 10) XYZ withdrew 5,000 from the business for living expenses. 11) Received 6,000 from a client in payment on account for sales billed in transaction 4. 12) Took a loan from FIB Bank worth 20,000. 13) Purchased a truch for 60,000 cash. 14) Sold goods for 17,000 cash. 15) Received 30,000 in advance from a client for work to be done. (A) Prepare the necessary journal entries for the above transactions. The following adjustments were found necessary at the end of the year 1) The Truck has a salvage value of 10,000 and a useful life of 5 years (Prepare the adjusting entry associated with the truck’s depreciation). 2) Office supplies worth 4,000 were used throughout the year. 3) Interest on the loan is 18% annually and the loan was received in the beginning of the last quarter of the year. 4) Prepaid insurance was paid on July 1st. 5) XYZ performed the work that should be done in transaction 15. 6) Utilities expenses that the accountant forgot to record totaled 5,000. 7) Sales revenues that aren't recorded totaled 10,500. (B) Prepare the necessary adjusting entries for the year end. (C) Prepare the Income Statement for 2017 and Balance Sheet for December 31, 2017.
Page 2|8
Solution Journal Entries # 1 2
Accounts/ Explanations
Dr.
Cash
$ 500,000.00 XYZ's Capital
Office Supplies
$
Equipment
4 5 6 7 8 9 10 11 12 13 14 15
$ 500,000.00 7,000.00
Cash
3
Cr.
$
7,000.00
$ 60,000.00 Cash
$ 30,000.00
A/P
$ 30,000.00
A/R
$ 15,000.00 Revenue
Withdrawal
$ 15,000.00 $ 20,000.00
Cash Rent Expense
$ 20,000.00 $
8,000.00
Cash Prepaid Insurance 2 Years
$
8,000.00
$ 10,000.00 Cash
Adv. Expense
$ 10,000.00 $
6,000.00
Adv./P Salaries and Wages Expenses
$
6,000.00
$ 50,000.00 Cash
Withdrawal
$ 50,000.00 $
5,000.00
Cash Cash
$
5,000.00
$
6,000.00
6,000.00
A/R Cash
$
$ 20,000.00 Loan
Truck
$ 20,000.00 $ 60,000.00
Cash Cash
$ 60,000.00 $ 17,000.00
Revenue Cash
$ 17,000.00 $ 30,000.00
Unearned Revenue
$ 30,000.00
Page 3|8
T- Account Cash Dr.
Cr.
$ 500,000.00
$
7,000.00
$
6,000.00
$ 30,000.00
$ 20,000.00
$ 20,000.00
$ 17,000.00
$
$ 30,000.00
$ 10,000.00
0
$ 50,000.00
0
$
0
$ 60,000.00
$ 573,000.00
$ 190,000.00
8,000.00
5,000.00
$ 383,000.00
A/R Dr. $ 15,000.00 $ 9,000.00
Cr. $ 6,000.00
Revenue Dr.
Cr. $ 15,000.00 $ 17,000.00 $ 32,000.00 Withdrawal
Dr. $ 20,000.00 $ 5,000.00 $ 25,000.00
Cr.
Page 4|8
Trial Balance Dr.
Cr.
Cash
$ 383,000
A/P
$ 30,000
A/R
$ 9,000
Adv./P
$ 6,000
Office Supplies
$ 7,000
Loan
$ 20,000
Equipment
$ 60,000
Unearned Revenue
$ 30,000
Truck
$ 60,000
Revenue
$ 32,000
Pre-Paid Insurance
$ 10,000
XYZ’s Capital
$ 500,000
Rent Expense
$ 8,000
Advertising Expense
$ 6,000
Office Salaries & Wages
$ 50,000
Withdrawal
$ 25,000 $ 618,000
$ 618,000
Adjustment Entries # 1 2 3 4 5 6 7 -
Accounts/ Explanations
Dr.
Truck Depreciation Expense
Cr.
$ 10,000.00 Accu. Depreciation
Office Supplies Expense
$ 10,000.00 $
4,000.00
Office Supplies Interest Loan Expense
$
4,000.00
$ 900.00 I/P
Insurance Expense
$ 900.00 $ 2,500.00
Prepaid Expense Unearned Revenue
$ 2,500.00 $
30,000.00
Revenue Utilities Expense
$
30,000.00
$ 5,000.00 U/P
A/R
$ 5,000.00 $ 10,500.00
Revenue
$ 10,500.00
Interest = 20,000 X 0.18 = 3600/4= 900 Truck Dep. = (60,000 – 10,000)/5 = 50,000/5 = 5000
Page 5|8
Post- Adjustment Trial Balance Dr.
Cr.
Cash
$ 383,000
A/P
$ 30,000
A/R
$ 19,500
Adv./P
$ 6,000
Office Supplies
$ 3,000
I/P
$ 900
Equipment
$ 60,000
U/P
$ 5,000
Truck
$ 60,000
Accu. Deprication
$ 10,000
Pre-Paid Insurance
$ 7,500
Loan
$ 20,000
Rent Expense
$ 8,000
Revenue
$ 72,500
Advertising Expense
$ 6,000
XYZ’s Capital
$ 500,000
Office Salaries & Wages
$ 50,000
Withdrawal
$ 25,000
Depreciation Expense
$ 10,000
Office Supplies Expense
$ 4,000
Interest Expense
$ 900
Insurance Expense
$ 2,500
Utilities Expense
$ 5,000 $ 644,400
$ 644,400
Income Statement Net Income = Revenue – Expenses = 72,500 – (5000+ 2500+900+4000+10000+50000+6000+8000) = - 13,900 Loss by ($ 13,900)
Page 6|8
Closing Entries # 1 2 3 4
Accounts/ Explanations
Dr.
Revenue
Cr.
$ 72,500.00 Income Summery
Income Summery
$ 72,500.00 $
86,400.00
Total Expenses XYZ’s Capital
$
86,400.00
$ 25,000.00 Withdrawal
XYZ’s Capital
$ 25,000.00 $ 13,900.00
Income Summery
$ 13,900.00
Post-Closing Trial Balance Dr.
Cr.
Cash
$ 383,000
A/P
$ 30,000
A/R
$ 19,500
Adv./P
$ 6,000
Office Supplies
$ 3,000
I/P
$ 900
Equipment
$ 60,000
U/P
$ 5,000
Truck
$ 60,000
Accu. Deprecation
$ 10,000
Pre-Paid Insurance
$ 7,500
Loan
$ 20,000
XYZ’s Capital
$ 461,100
$ 533,000
$ 533,000
Page 7|8
Balance Sheet Assets
Liabilities and Equities.
Current Assets
Current Liabilities
Cash
$ 383,000
A/P
$ 30,000
A/R
$ 19,500
Adv./P
$ 6,000
Office Supplies
$ 3,000
I/P
$ 900
Pre-Paid Insurance
$ 7,500
U/P
$ 5,000
Total Current Assets
$ 413,000
Total Current Liabilities
$ 41,900
Long Term Assets
Long – Term Liabilities $ 20,000
Equipment
$ 60,000
Loan
Truck
$ 60,000
Total Long- Term Liabilities $ 20, 000
($ 10,000)
Equities
Total Truck
$ 50,000
XYZ’s Capital
Total Long-Term Assets
$ 110,000
Less: Accu. Depreciation
Total Assets
$ 523,000
Total Liabilities & Equities
$ 461,100
$ 523,000
Page 8|8
Ahmed Ezzat Ali 18124753
Table of Contents Accounting Assignment .......................................................................................................................... 2 Solution ................................................................................................................................................... 3 Journal Entries..................................................................................................................................... 3 T- Account ........................................................................................................................................... 4 Trial Balance ........................................................................................................................................ 5 Adjustment Entries ............................................................................................................................. 5 Post- Adjustment Trial Balance ........................................................................................................... 6 Income Statement .............................................................................................................................. 6 Closing Entries ..................................................................................................................................... 7 Post-Closing Trial Balance ................................................................................................................... 7 Balance Sheet...................................................................................................................................... 8
Page 1|8
Accounting Assignment The following Journal entries occurred in 2017 1) XYZ invested 500,000 in cash in the business. 2) Purchased 7,000 of office supplies in cash. 3) Purchased equipment for 60,000, paying only half of the amount in cash. 4) A customer purchased goods on account for 15,000 5) The owner withdrew 20,000 for personal use. 6) Paid 8,000 in cash for the current month's rent. 7) Paid 10,000 cash as an advance for insurance on the factory for 2 years. 8) Received a bill for 6,000 for advertising for the current year. 9) Paid 50,000 cash for office salaries and wages. 10) XYZ withdrew 5,000 from the business for living expenses. 11) Received 6,000 from a client in payment on account for sales billed in transaction 4. 12) Took a loan from FIB Bank worth 20,000. 13) Purchased a truch for 60,000 cash. 14) Sold goods for 17,000 cash. 15) Received 30,000 in advance from a client for work to be done. (A) Prepare the necessary journal entries for the above transactions. The following adjustments were found necessary at the end of the year 1) The Truck has a salvage value of 10,000 and a useful life of 5 years (Prepare the adjusting entry associated with the truck’s depreciation). 2) Office supplies worth 4,000 were used throughout the year. 3) Interest on the loan is 18% annually and the loan was received in the beginning of the last quarter of the year. 4) Prepaid insurance was paid on July 1st. 5) XYZ performed the work that should be done in transaction 15. 6) Utilities expenses that the accountant forgot to record totaled 5,000. 7) Sales revenues that aren't recorded totaled 10,500. (B) Prepare the necessary adjusting entries for the year end. (C) Prepare the Income Statement for 2017 and Balance Sheet for December 31, 2017.
Page 2|8
Solution Journal Entries # 1 2
Accounts/ Explanations
Dr.
Cash
$ 500,000.00 XYZ's Capital
Office Supplies
$
Equipment
4 5 6 7 8 9 10 11 12 13 14 15
$ 500,000.00 7,000.00
Cash
3
Cr.
$
7,000.00
$ 60,000.00 Cash
$ 30,000.00
A/P
$ 30,000.00
A/R
$ 15,000.00 Revenue
Withdrawal
$ 15,000.00 $ 20,000.00
Cash Rent Expense
$ 20,000.00 $
8,000.00
Cash Prepaid Insurance 2 Years
$
8,000.00
$ 10,000.00 Cash
Adv. Expense
$ 10,000.00 $
6,000.00
Adv./P Salaries and Wages Expenses
$
6,000.00
$ 50,000.00 Cash
Withdrawal
$ 50,000.00 $
5,000.00
Cash Cash
$
5,000.00
$
6,000.00
6,000.00
A/R Cash
$
$ 20,000.00 Loan
Truck
$ 20,000.00 $ 60,000.00
Cash Cash
$ 60,000.00 $ 17,000.00
Revenue Cash
$ 17,000.00 $ 30,000.00
Unearned Revenue
$ 30,000.00
Page 3|8
T- Account Cash Dr.
Cr.
$ 500,000.00
$
7,000.00
$
6,000.00
$ 30,000.00
$ 20,000.00
$ 20,000.00
$ 17,000.00
$
$ 30,000.00
$ 10,000.00
0
$ 50,000.00
0
$
0
$ 60,000.00
$ 573,000.00
$ 190,000.00
8,000.00
5,000.00
$ 383,000.00
A/R Dr. $ 15,000.00 $ 9,000.00
Cr. $ 6,000.00
Revenue Dr.
Cr. $ 15,000.00 $ 17,000.00 $ 32,000.00 Withdrawal
Dr. $ 20,000.00 $ 5,000.00 $ 25,000.00
Cr.
Page 4|8
Trial Balance Dr.
Cr.
Cash
$ 383,000
A/P
$ 30,000
A/R
$ 9,000
Adv./P
$ 6,000
Office Supplies
$ 7,000
Loan
$ 20,000
Equipment
$ 60,000
Unearned Revenue
$ 30,000
Truck
$ 60,000
Revenue
$ 32,000
Pre-Paid Insurance
$ 10,000
XYZ’s Capital
$ 500,000
Rent Expense
$ 8,000
Advertising Expense
$ 6,000
Office Salaries & Wages
$ 50,000
Withdrawal
$ 25,000 $ 618,000
$ 618,000
Adjustment Entries # 1 2 3 4 5 6 7 -
Accounts/ Explanations
Dr.
Truck Depreciation Expense
Cr.
$ 10,000.00 Accu. Depreciation
Office Supplies Expense
$ 10,000.00 $
4,000.00
Office Supplies Interest Loan Expense
$
4,000.00
$ 900.00 I/P
Insurance Expense
$ 900.00 $ 2,500.00
Prepaid Expense Unearned Revenue
$ 2,500.00 $
30,000.00
Revenue Utilities Expense
$
30,000.00
$ 5,000.00 U/P
A/R
$ 5,000.00 $ 10,500.00
Revenue
$ 10,500.00
Interest = 20,000 X 0.18 = 3600/4= 900 Truck Dep. = (60,000 – 10,000)/5 = 50,000/5 = 5000
Page 5|8
Post- Adjustment Trial Balance Dr.
Cr.
Cash
$ 383,000
A/P
$ 30,000
A/R
$ 19,500
Adv./P
$ 6,000
Office Supplies
$ 3,000
I/P
$ 900
Equipment
$ 60,000
U/P
$ 5,000
Truck
$ 60,000
Accu. Deprication
$ 10,000
Pre-Paid Insurance
$ 7,500
Loan
$ 20,000
Rent Expense
$ 8,000
Revenue
$ 72,500
Advertising Expense
$ 6,000
XYZ’s Capital
$ 500,000
Office Salaries & Wages
$ 50,000
Withdrawal
$ 25,000
Depreciation Expense
$ 10,000
Office Supplies Expense
$ 4,000
Interest Expense
$ 900
Insurance Expense
$ 2,500
Utilities Expense
$ 5,000 $ 644,400
$ 644,400
Income Statement Net Income = Revenue – Expenses = 72,500 – (5000+ 2500+900+4000+10000+50000+6000+8000) = - 13,900 Loss by ($ 13,900)
Page 6|8
Closing Entries # 1 2 3 4
Accounts/ Explanations
Dr.
Revenue
Cr.
$ 72,500.00 Income Summery
Income Summery
$ 72,500.00 $
86,400.00
Total Expenses XYZ’s Capital
$
86,400.00
$ 25,000.00 Withdrawal
XYZ’s Capital
$ 25,000.00 $ 13,900.00
Income Summery
$ 13,900.00
Post-Closing Trial Balance Dr.
Cr.
Cash
$ 383,000
A/P
$ 30,000
A/R
$ 19,500
Adv./P
$ 6,000
Office Supplies
$ 3,000
I/P
$ 900
Equipment
$ 60,000
U/P
$ 5,000
Truck
$ 60,000
Accu. Deprecation
$ 10,000
Pre-Paid Insurance
$ 7,500
Loan
$ 20,000
XYZ’s Capital
$ 461,100
$ 533,000
$ 533,000
Page 7|8
Balance Sheet Assets
Liabilities and Equities.
Current Assets
Current Liabilities
Cash
$ 383,000
A/P
$ 30,000
A/R
$ 19,500
Adv./P
$ 6,000
Office Supplies
$ 3,000
I/P
$ 900
Pre-Paid Insurance
$ 7,500
U/P
$ 5,000
Total Current Assets
$ 413,000
Total Current Liabilities
$ 41,900
Long Term Assets
Long – Term Liabilities $ 20,000
Equipment
$ 60,000
Loan
Truck
$ 60,000
Total Long- Term Liabilities $ 20, 000
($ 10,000)
Equities
Total Truck
$ 50,000
XYZ’s Capital
Total Long-Term Assets
$ 110,000
Less: Accu. Depreciation
Total Assets
$ 523,000
Total Liabilities & Equities
$ 461,100
$ 523,000
Page 8|8
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