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Group Assignment One

This document provides information for two group assignments for an MBA accounting course. The first question provides transactions for a corporation and asks students to record journal entries and post transactions to T-accounts. The second question provides a trial balance for an insurance agency and asks students to prepare adjusting entries, adjusted trial balance, financial statements, journal entries to close accounts, and ratio analyses. Students have two weeks to complete the assignment in groups of up to three people.

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ehitemariam berhanu
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267 views

Group Assignment One

This document provides information for two group assignments for an MBA accounting course. The first question provides transactions for a corporation and asks students to record journal entries and post transactions to T-accounts. The second question provides a trial balance for an insurance agency and asks students to prepare adjusting entries, adjusted trial balance, financial statements, journal entries to close accounts, and ratio analyses. Students have two weeks to complete the assignment in groups of up to three people.

Uploaded by

ehitemariam berhanu
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Rift Valley University MBA program

Accounting for Managers (MBA-641)


Group Assignments one for MBA students
(Maximum 5 students in each group)
Question one
Fantastic Corporation is a corporation that owns and operates a public accounting
practice. The business transactions during September, 2020 while the new venture was
being organized are listed below:
Sept. 1 The Corporation issued 20,000 shares of capital stock to Elizabeth Carver in
exchange for her investment of Birr 50,000 cash which she had saved over a
period of years.
Sept. 10 purchased a small office building located on a large lot for a total price of Birr
182,000, of which Birr 106,000 was applicable to the land and Birr76, 000 to
the building. A cash payment of Birr 36,500 was made and a note payable was
issued for the balance of the purchase price.
Sept. 15 purchased a microcomputer system from Computer Stores Inc., for Birr 1,680
cash.
Sept. 19 Purchased office furniture, filing cabinets and a typewriter from Davidson Office
Supply Company at a cost of Birr 3,960. A cash down payment of Birr 720
was made, the balance to be paid in three equal installments due September 28,
October 28, and November 28. The purchase was on open account and did not
require signing of a promissory note.
Sept. 26 A Birr 140 monitor in the microcomputer system purchased on September 15
stopped working. The monitor was returned to Computer Stores Inc., which
promised to refund the Birr140 within five days.
Sept. 28 Paid Davidson Office Supply Company Birr 1,080 cash as the first installment
due on the accounts payable for office equipment
Sept. 30 Received Birr 140 cash form computer Stores Inc., in full settlement of the
account receivable created on September 26.
REQUIRED:
A. Prepare journal entries to record the above transactions in the firm’s General
Journal.
B. Select the appropriate account, post the above transactions to accounts in the
ledger and show there balance by using T-account.

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Question Two
Key Insurance Agency was organized on October 1, 2020. Assume that the accounts are closed and
financial statements prepared each month. The company occupies rented office space but owns office
equipment estimated to have a useful life of 10 years from date of acquisition, October 1. The trial
balance for Key Insurance Agency at December 31 is shown below:

Cash Br 20,065
Accounts Receivables 5,050
Supplies 2,000
Prepaid rent 2,500
Inventories 3,000
Office Equipment 6,440
Accounts Payable 2,260
Unearned rent 2,000
Income Taxes Payable 2,965
Capital Stock 20,000
Retained Earnings 7,450
Dividends 2,500
Commissions Earned 31,080
Advertising Expense 2,400
Salaries Expense 18,000
Rent Expense 3,800
Totals Br 65,755 Br 65,755
Additional information for adjustment:
1. Supplies on at the end of December is only br500
2. 40% of unearned revenue earned at the end of December
3. 1/3 of prepaid rent is expired at the end of December
4. Assume at the end of December there is deferred revenue of birr 1,000 from commission service
5. Assume at the end of the month there is accrued salary expense of birr 900
Instructions:
A. Prepare the adjusting entry based on the above unadjusted train balance and additional
information’s for the month ended December 2020.
B. Prepare an adjusted trial balance at December 31, 2020.
C. Prepare an income statement and a statement of retained earnings for the month ended
December 31, 2017, and a balance sheet in report form at December 31, 2020.
D. Prepare journal entries to close the temporary accounts. Use four entries (1) to close the
revenue account, (2) to close the expense accounts, (3) to close the income summary account,
and (4) to close the dividend account.
E. Calculate all possible ration analysis (at list two from each ration type) and give appropriate
interpret you result

N.B 1. Maximum students should be 3


2. Submission date will be after two weeks

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