Q UE E N S ’ CO L L EG E D I S T A N CE E DU CAT I O N DI VI S I O N

T E L . 0 1 1 - 8 - 12 - 19 - 82

ASSIGNMENT

ON

Principle of Accounting I

Date: -

Total Weight: - 30 %

Name: - _________________________________________ ID NO: - ______________________

Department: _____________ Study center: _________________ Entry year: - ____________

Program: DEGREE

 This is the only assignment of this course.

🖝This assignment is to be completed and submitted to the office of your center. Do not
attempt the assignment until you are certain that you have understood the units it covers
and have revised your self-test exercises and learning activities, and other necessary
references.

 If you have any question about the units and activities, state the item/s clearly on a
separate sheet of paper and attach to your assignment paper.
Part II Work Out
Q1. On December 1, 2015, Ato Abebe starts small business enterprise. Abebe completed the
following transactions during the month of December.
a. Opened a business bank account with a deposit of Birr 15,000 from personal funds.
b. Paid rent on office and equipment for the month, Birr 2,400.
c. Paid automobile expenses (including rental charge) for month, Birr 750, and miscellaneous
expenses, Birr 380.
d. Purchased supplies (pens, file folders, and copy paper) on account, Birr 950.
e. Earned sales commissions, receiving cash, Birr 17,350.
f. Paid creditor on account, Birr 580.
g. Paid office salaries, Birr 3,600.
h. Withdrew cash for personal use, Birr 1,500.
i. Determined that the cost of supplies on hand was Birr 275; therefore, the cost of supplies used
was Birr 675.
Instructions
A. Record the journal entry for each transaction and post to the general leger.
Answer
a. cash---------- 15000
Owners’ equity ----------- 15000
b. Rent expense --------- 2400
Cash ------------------------ 2400
c. car rent expense ------------ 750
Miscellaneous expense ----380
Cash ---------------- 1130
d. supply ---------------950
Account payable ------ 950
e. cash --------------17350
Account receivable ---- 17350
 f. account payable -------- 580
Cash -------------------------- 580
g. salary expense= ------ 3600
Cash --------------- 3600
h. drawing ------------ 1500
Cash ------------ 1500
i. supply expense ------------- 675
Supply -----------------------275
Supply ------------- 675
Supply expense --- 275

B. Prepare an income statement, statement of owner’s equity and balance sheet for
December31 2015.

Ato Abebe starts small business enterprise

Income statement
For the year ended dec 31 215
Revenue
Sales revenue 15,000
Other revenue 17,350
Total revenue 32,350
Expense
Rent expense---------------------------2400
car rent expense-----------------------750
miscellaneous expense—-------------380
salary expense=------------------------3600
supply expense-------------------------675
Total expense 7,805
Net income 24,545
Q2. On August 31, 2015, the following data were accumulated to assist the accountant in preparing
the adjusting entries for X business group:
a. Fees accrued but unbilled at August 31 are Birr 7,100.
ANS Account receivable ----- 7100
Fees revenue ------------- 7100
b. The supplies account balance on August 31 is Birr 3,010. The supplies on hand at August 31
are Birr1150.
ANS Supply ----------- 1150
Supply expense -- 1860
Supply ----------- 3010

c. Wages accrued but not paid at August 31 are Birr1380.

ANS
Salary expense --------- 1380
Salary payable ----- 1380

d. The unearned rent account balance at August 31 is Birr 4,950, representing the receipt of an
advance payment on August 1 of three months’ rent from tenants.
ANS Prepaid rent ------------------ 4950
Rent expense -------------------- 4950
e. Depreciation of office equipment is Birr $1,120.
Depreciation expense ------------------- 1120
Acc/depreciation equipment --------------1120

Q3. The following transactions were completed by XYZ during the month May of the current year.
XYZ Company uses a perpetual inventory system.

May 3. Purchased merchandise on account from Z Co. Birr 4,000, terms FOB shipping point, 2/10,
n/30, with prepaid transportation costs of Birr 120 added to the invoice.
ANS
Purchase 4000
Account payable -------------- 4000
Transportation in-------------- 120
Cash 120
May 5. Purchased merchandise on account from X Co. Birr 8,500, terms FOB destination, 1/10,
n/30. Purchase --------------------- 8500
ANS Account payable--------- 8500
May 6. Sold merchandise on account to F Co. list price Birr 4,000, trade discount 30%, terms 2/10,
n/30. The cost of the merchandise sold was Birr 1,125.
Account receivable ------------- 4000
Sales 4000
Cost of goods sold ------------------1125
Inventory 1123
May 8. Purchased office supplies for cash, Birr 150.
Supply 150
Cash 150
May 10. Returned merchandise purchased on May 5 from X Co. Birr 1,300.
Account payable --------------- 1300
Purchase return and allowance -----1300
May 14. Purchased merchandise for cash, Birr 10,500.
Purchase --------------- 10500
Cash 1000

May 15. Paid to X Co. on account for purchase of May 5, less return of May 10and discount.
Account payable ---------7200
Purchase discount ----------------- 144
Cash 7056
May 16. Received cash on account from sale of May 6 to F Co. less discount.

Cash 3920

Sales discount ---------------- 80

Account receivable ------------------ 4000