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Mr. ABC started a business on January 1, 2022 and had various cash receipts and payments throughout the month. This included investing cash, purchasing supplies and equipment, receiving payment for services, paying expenses like rent and salaries, and withdrawing cash. At the end of January, adjusting entries were needed for insurance, supplies, depreciation, unearned revenue, accrued salaries, and unbilled services. The requirements are to record the transactions, prepare trial balances, record adjusting entries, prepare adjusted financial statements, record closing entries, and prepare a post-closing trial balance.

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Shehzore Baloch
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22 views

Project

Mr. ABC started a business on January 1, 2022 and had various cash receipts and payments throughout the month. This included investing cash, purchasing supplies and equipment, receiving payment for services, paying expenses like rent and salaries, and withdrawing cash. At the end of January, adjusting entries were needed for insurance, supplies, depreciation, unearned revenue, accrued salaries, and unbilled services. The requirements are to record the transactions, prepare trial balances, record adjusting entries, prepare adjusted financial statements, record closing entries, and prepare a post-closing trial balance.

Uploaded by

Shehzore Baloch
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Assignment

Subject: Financial Accounting-I

Question No: 1- On January 1, 2022, Mr. ABC formed a business. The following
transactions incurred for the month of January.
 On January 1, invested $90,000 cash in the new business.
 On Jan 3, business used $7000 of its cash to buy supplies.
 On Jan 5, spent $35,000 to acquire equipment.
 On Jan 8, purchased additional supplies of $5,000 on account.
 On Jan 9, provided consulting services and immediately collects $8000 cash.
 On Jan 10, paid $4,000 to rent its facilities for the month of December.
 On Jan 12, paid the biweekly $1000 salary to the employee.
 On Jan 13, provided consulting services of $5000 to on credit.
 On January 22, received cash $3500 for services provided on January, 13.
 On January 23, paid $3000 cash as partial payment for its earlier purchase of supplies.
 On Jan 25, the owner withdrew $1000 cash for personal use.
 On January 26, received $4,000 cash in advance of providing consulting services to a
client. Client paid 60 days fees in advance.
 On January 26, paid $800 cash in employee salary for work performed in the latter part
of January.
 On January 27, paid $4800 cash (insurance premium) for a 24-month insurance policy.
Coverage begins on January 1.
 On January 30, paid $500 cash for utilities expense.

Data for Adjustment on January 31st (Adjusting Entries): (Note: After


preparing Trial Balance, go through this data for adjusting entries).
 Insurance policy was expired for one month.
 When computed (physically counted) its remaining unused supplies at January 31, it
finds $5000 of supplies remaining.
 Depreciation on the equipment is $300 per month.
 By January 31, provided five days’ service and earned $333 of the $4,000 unearned
revenue.
 On January 31st, salaries of $360 are accrued.

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 In January, performed services of worth $4000, which were not billed to client on or
before January, 31st.

Requirements:
1) Journalize (record) the transactions.
2) Post each journal entry to the appropriate ledger accounts.
3) Prepare a trial balance.
4) Journalize and post adjusting entries.
5) Prepare an adjusted trial balance.
6) Prepare financial statements (Income Statement, Statement of Owner’s Equity and
Balance Sheet)
7) Journalize and post-closing entries.
8) Prepare a post-closing trial balance.

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