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Assignment No. 01 FAP

The document provides details of several transactions undertaken by different businesses over multiple periods of time. It includes purchases, sales, payments, receipts, investments and other financial transactions. Journal entries are to be prepared for each transaction along with T-accounts showing debits and credits.

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Umar Farid
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112 views4 pages

Assignment No. 01 FAP

The document provides details of several transactions undertaken by different businesses over multiple periods of time. It includes purchases, sales, payments, receipts, investments and other financial transactions. Journal entries are to be prepared for each transaction along with T-accounts showing debits and credits.

Uploaded by

Umar Farid
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Assignment No.

01 - FAP
Question No.01: The McMillan Corporation was incorporated on September 2, 2011. The
company engaged in the following transactions during its first month of operations:

Sept. 2 Issued capital stock in exchange for $900,000 cash.

Sept. 4 Purchased land and a building for $350,000. The value of the land was $50,000, and
the value of the building was $300,000. The company paid $200,000 cash and issued a note
payable for the balance.

Sept. 12 Purchased office supplies for $600 on account. The supplies will last for several
months.

Sept. 19 Billed clients $75,000 on account.

Sept. 29 Recorded and paid salary expense of $24,000.

Sept. 30 Received $30,000 from clients billed on September 19.

A partial list of the account titles used by the company includes:

Cash Notes Payable Accounts Receivable Accounts Payable

Office Supplies Capital Stock Land Client Revenue

Building Salary Expense

 Prepare journal entries, including explanations, for the above transactions.


 Prepare the T-account of all transactions.

Question No.02: Goldstar Communications was organized on December 1 of the current


year and had the following account balances at December 31, listed in tabular form:

Early in January, the following transactions were carried out by Goldstar Communications:

1. Sold capital stock to owners for $35,000.

2. Purchased land and a small office building for a total price of $90,000, of which $35,000
was the value of the land and $55,000 was the value of the building. Paid $22,500 in cash
and signed a note payable for the remaining $67,500.
3. Bought several computer systems on credit for $9,500 (30-day open account).

4. Obtained a loan from Capital Bank in the amount of $20,000. Signed a note payable.

5. Paid the $28,250 account payable due as of December 31.

Instructions:
 List the December 31 balances of assets, liabilities, and owners’ equity in tabular
form as shown.
 Record each transaction in the general Journal.

Question No.03:

1. Purchase supplies for cash Rs. 400


2. Purchase machine for cash Rs.7,000
3. Services rendered to a client for cash Rs. 5,000
4. Cash deposited in bank a/c Rs. 10,000
5. Mr. Khalid invested in business Rs. 65,000
6. Services rendered to a client Baber on credit Rs. 6,000
7. Cash withdrawn from the bank for office Rs. 500
8. Purchase computer on credit from Amir Rs. 20,000
9. Paid salaries expense by cheque Rs. 15,000

Required:
 Prepare journal entries, including explanations, for the above transactions.
 Prepare a T-account of all transactions.

Question No.04:

1. Purchase equipment for Rs.30,000 from Amir and paid cash Rs.20,000, balance is
payable
2. Sold merchandise for Rs.10,000 to Baber and received cash Rs.6000, balance is
receivable
3. Paid to Amir by cheque Rs. 4,000
4. Received from Baber Rs.1,000
5. Paid salaries expense by cheque Rs. 3,000
6. Earned commission of Rs. 7,000

Required:
 Prepare journal entries, including explanations, for the above transactions.
 Prepare a T-account of all transactions.

Question No.05:

1. Mr. A started a business with Rs. 50,000.


2. Paid rent for three months at Rs. 7,500.
3. Bought office equipment from B&Co. for Rs. 10,000, paid to them Rs. 3,000 and
promised to pay the balance after two months.
4. Rendered services to clients and received cash Rs. 5,000
5. Purchase supplies for cash Rs. 400
6. Paid salaries to staff Rs. 5,400
7. Bought furniture for Rs. 3,200, paid to K&Co. Rs. 1,200 and promised to pay the balance
after one month
8. Withdrew cash for personal use Rs. 3,000
9. Billed to Nasir for services rendered on credit Rs. 12,500
10. Received from Nasir Rs. 5,000

Required:
 Prepare journal entries, including explanations, for the above transactions.
 Prepare a T-account of all transactions.

Question No.06:
Mr. Cheri Marted's business in Mark 1. 10 with a cash Band of Rs. 15,000 Other transactions
for the month of March are as follows:

March 2 purchased merchandise for cash Rs. 12,000


4 Paid rent for Match Rs. 450
7 Purchased equipment from Dawood & Co., Rs. 9,000 Paid Rs. 1,500 cash and promised to
pay the balance on April 10.
8 Borrowed Rs. 30,000 from bank
10 Cash sales Rs. 1.200.
13. Received merchandise purchased on account from Qassim & Co., Rs. 6,000
16 Sold merchandise on account to Ali Bros., Rs. 6,600.
20 Purchased supplies for Rs. 90 cash
22 Paid for advertisement in a newspaper, Rs. 60 cash
25 Cash sales, Rs. 1,800
27 Received around due from Ali Bros., for sale of March 16.
30 Paid balance due Qassim & Co., for merchandise purchased on March 13
31 Paid employee's salary Rs. 750
31 Mr. Ghori withdrew merchandise costing Rs. 300

Required:

 Journalize the transactions in a general journal and form a T-account.

Question No.07:
The following transactions relate to the first month's operations of Wahid & Co.

April 1 A. Wahid started a business with an investment of cash Rs. 15,000, land valued at Rs.
3,000, and a building valued at Rs. 20,000
4 Received merchandise purchased on account from Lal & Co. Rs. 5,000.
6 Purchased a delivery truck from Ali Autos, Rs. 10,500. Issued a promissory note for the full
amount.
7 Sold merchandise on account to Qureshi & Co. Rs. 1,500
11 Purchased two adjoining plots for cash Rs. 12,000
15 Cash sales Rs. 1,800
16 A. Wahid withdrew merchandise costing Rs. 450
19 Paid balance due Lal & Co., for merchandise purchased on April 4.
21 Paid Rs. 300 for a television advertisement.
23 A. Wahid made an additional investment in the business of Rs. 10,000 cash.
28 Sold one of the adjoining plots purchased on April 11 to Bundigi Real Estate. Received a
promissory note for Rs. 6,000.
29 Collected one-half of the amount due from Qureshi & Co., for the sale of April 7.
30 Paid salesmen's salaries Rs. 1,800.

Required:

 Journalize the transactions in General Journal and form T-account

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