Assignment-1 (20%)

JimmaUniversity
Department Of Accounting and Finance

MA in Project Management and Finance
Financial and Managerial Accounting-Assignment-1
(20%)
Question1:To complete accounting cycle, consider the following list of selected transactions. The
transactions were completed by Bati Service Center in the year of 2016.
a) January 2,AtoYimer took Birr 1000,000 from his personal savings and deposited it in the
name of Bati service center.
b) February 1,Bati service center borrowed 50,000birr 3 years commercial loan at 12%
annually, interests payable annually.
c) February 28, Purchased office equipment priced at 6,000birr, giving a 10% promissory
note, maturity date July 1, 2016, in exchange.
d) March 2, Received 4,000birr cash for services rendered.
e) April 11, Purchased office supplies 1,000birr on account.
f) May 10, Paid 1,000birr in cash for the office supplies purchased on April 11.
g) June 15, Purchased truck for 550,000birr in cash for to be used for business travel.
h) July 1, Paid off a short-term liability of 6,200birr.
i) July 1, Rent office space at annual rental fee of 12,000birr, the full amount of annual rental
fee was paid in advance.
j) August 15, performed service and send invoice of 30,000birr to client for service rendered.
k) September 15, Collected cash of 30,000birr from client (see August 15).
l) November 15, Signed a 100,000birr service agreement with one client, the service period
will be started on February 1, 2017.
m) November 30, Received 30,000birr cash as down payment for service agreement signed on
November 15.
n) December 31, determined that employee' salary expense for the year 2016 is 20,000birr
and will be paid on Jan. 10, 2017.
o) Placed order for 2,000birr additional office supplies to be delivered on January 10, 2017.
(Assuming the purchase order is based on F.O.B. Destination).
The data needed to determine year-end adjustments are as follows:
1. Adjustment for accrued interest for 3years 12% commercial loan borrowed on February 1,
2016 at December 31, 2016
2. Estimated depreciation of equipment for the year, 1000 birr.
3. The book value for the office supplies on hand at December 31, 2016 is 250 birr.
4. Estimated depreciation of truck for the year, 10,000 birr.
5. Accrued rent expense is 6000 birr
Instruction:
 Record the journal entries
 Prepare ledger (post to ledger account)
 Prepare trial balance
 Prepare adjusting entries and adjusted trial balance
Question 2: The accounts in the ledger of ABC as of June 30 of the current year are listed in
alphabetical order as follows. All accounts have normal balances. The balance of the cash account
has been intentionally omitted.
A/P--------------------------------------------------------------- 21,910
A/R--------------------------------------------------------------- 28,500
Cash---------------------------------------------------------------
ABC capital------------------------------------------------------ 150,000
1
6/2/2024
ABC Drawing---------------------------------------------------- 28,000
Fees earned------------------------------------------------------350,000
Insurance expense----------------------------------------------- 5,000
Land-------------------------------------------------------------- 125,000
Miscellaneous expense----------------------------------------- 9,900
Note payable----------------------------------------------------- 25,000
Prepaid insurance------------------------------------------------ 3,150
Rent Expense----------------------------------------------------- 48,000
Salary Expense--------------------------------------------------215,000
Supplies------------------------------------------------------------ 3,900
Supplies Expense------------------------------------------------- 6,100
Utilities Expense--------------------------------------------------41,500
Instruction:Prepare a trial balance, listing the accounts in their proper order and inserting the
missing figure forcash.
Question 3: Two years ago Abebe organized start Laundromat as a sole proprietorship. At
December 31, 2016, the end of current fiscal year, the trial balance of start Laundromat is as
follows:
Start Laundromat
Trial Balance
December 31, 2016
Cash……………………………………………………….2,425
Laundry supplies……………………………………1,870
Prepaid insurance……………………………………..620
Laundry equipment……………………………...37,650
Accumulated depreciation…………………………………….........9,700
Account payable………………………………………………...................925
Abebe, capital…………………………………………………..............22,180
Abebe, drawing……………………………………..10,200
Laundry revenue…………………………………………………......39,125
Wage expense……………………………………….12,415
Rent expense……………………………………..........3,600
Utilities expense………………………………….......2,715
Miscellaneous expense……………………………….435
71,930 71,930
The data needed to determine yearend adjustments are as follows:
a) Inventory of laundry supplies at December 31, 2016…………… $ 480.
b) Insurance premiums expired (used) during the year………………315.
c) Depreciation on the equipment during the year……………………1,950.
d) Wage accrued but not paid at December 31, 2016…………………140.
Instructions:
1) Record the adjusting entries
2) Prepare adjusted trial balance
3) Prepare an income statement, a statement of owner’s equity and balance sheet.
4) Record closing entries
5) Prepare post-closing trial balance
2
6/2/2024

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Department Of Accounting and Finance

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