Question

Arsi University

College of business and economics

Department of Accounting and finance

Principles of accounting I Assignment I

Mimi started a new business called Omo Company and completed the following transactions during
November 2016:

Nov.1 Mimi transferred 56,000 out of a personal savings bank account to a checking
account in the name of the business.

1. Rented office space and paid cash for the month’s rent of 800

3. Purchased electrical equipment for 14,000 by paying 3,200 and agreeing to pay the remaining
balance in six months

5. Purchased office supplies by paying 900 cash.

6. Completed electrical work and received 1,000 cash for doing the work.

9. Purchased 3,800 of office equipment on credit

15. Completed electrical work on credit in the amount of 4,000

20. Paid for the office equipment purchased on Nov.9

24. Billed a customer for electrical work completed 600

28. Received 4,000 for the work completed on Nov.15

30. Paid salary of employees 1,200

30. Paid the monthly utilities bill 440

30. Withdrew 700 from the business for personal use

Required:

Journalize

Post using T accounts

Prepare trial balance
Prepare financial statements
Prepare closing entries
Prepare post closing trial balance
Answers

1.The journal entery of the above questions are as follow

Date Description Debit Credit

Nov 2016 Cash 56000

1 Mimi intaial capital 56000

For personal investment

1 Office rent expense 800

Cash 800

Payment of rent

3 Electrical equipment 14000

Cash 3200

Account payable 10800

Purchase of electrical equipment

5 Office supplies 900

Cash 900

Purchase of supply

6 Cash 1000

Service income 1000

Provision of service

9 Office equipment 3800

Account payable 3800

Purchase of office equipment

Date Description Debit Credit

15 Account receivable 4000

Service income 4000

Provision of service

20 Cash 3800

Account payable 3800

Cash 600

24 Service income 600

Provision of service

28 Cash 4000

Account receivable 4000

Cash collections

30 Salary expense 1200

Cash 1200

Salary payment

30 Utility expenses 440

Cash 440

Payment for utility

30 Withdraw 700

Cash 700

Owner Withdrawal
2.The ledger of the jounalized iteams are as follow

Account cash Balance

Date Iteam P.R Debit Credit Debit Credit

Nov2016

1 56000 56000

1 800 55200

3 3200 52000

5 900 51100

6 1000 52100

15 4000 48100

20 3800 51900

24 600 52500

28 4000 56500

30 1200 55300

30 440 54860

30 700 54160
 3.Trail balance
Trail balance Debit Credit

Cash 54160

Mimi capital 56000

Rent expense 800

Electrical equipment 14000

Account payable 18400

Office supplies 900

Service income 5600

Office equipment 3800

Salary expense 1200

Utility expense 440

Withdraw 700

Account receivable 4000

Total 80000 80000

 4. Balance sheet
omo campany
Balance sheet
For the month ended Nov,30,2016

Account Trail Adjustme Adjusted Income Balance

title nt trail statemen sheet
balance
balance t
Cash 5416 541 541 54
0 60 60 16
0
Mimi 5600 560 5600 5600
capital 0 00 0 0
Rent 800 800 800 800
expense

Electrical 1400 140 140 14

equipme 00
nt 0 00 00 0
Account 1840 184 1840 1840
payable 0 00 0 0
Office 900 900 900 90
supplies 0
Service 5600 560 5600 560
income 0 0
Office 3800 380 380 38
equipme 0 0 00
nt
Salary 1200 120 120 120
expense 0 0 0
Utility 440 440 440 440
expense
Withdra 700 700 700 700 70
wal 0
Account 4000 316 840 84
receivabl 0 0
e
Net 316 74 7440
income 0 40 0
 0

4.income statement
Omo company

Income statement

For the month Nov30 2016

- service income ...............5600

Operating expenses

- salary expense................1200

- rent expenses..................800

- utility expense................440

Total Operating expenses ...2440

Net income .....................3160

5.statement of owners equity

Omo company

Statement of owner equity

For the month ended Nov 30 2016

Mimi intial capital Nov 1,2016......56000

Net income for the month..............3160

Withdrawal......................................700

2460

Mimi capital Nov 30,2016............58460

6.Balance sheet
Omo company
Balance sheet
November 30,2016
Asset
Current asset

Cash.....54160

Account receivable ....4000

Supplies ......................900

Plant asset

Office equipment ....3800

Electrical equipment 14000

Total asset.........76860

Liabilities
Current liability

Account payable ..18400

Non current liability....0

Total liability.................18400
Owner`s equity
Mimi capital .............58460

Total liability and owner`s equity.... 76860

7.closing enteries
1.closing revenue account

Nov30,2016

Income summery...........5600

Service income..........................5600

2.closing expense account

Nov30,2016

Salary expense..............1200

Rent expense..................800

Utility expense................440

Income expense......................2440

3.closing income summery account

NOV30,2016

Income summery.............3160

Mimi capital...............................3160

4.closing withdrawal account

NOV30,2016

Mimi capital................700

Mimi withdrawal................700
8.post closing
Asset Liabilities +equity

Cash................................54160 Account payable............18400

Account receivable.........4000 Mimi capital....................58460

Supplies...........................900 _

Office equipment.............3800 _

Electrical equipment........14000 _

Total...................................76860 Total......................................76860
ARSI UNIVERSITY
COLLEGE BUSINESS AND ECONOMICS
DEPARTMENT OF ACCOUNTING AND FINANCE
Fundamental of accounting1 individual assignment

Name of student ID No
Tesfaye Dechasa EXUG/0746/15

Submitted to instructor. Tewodros

Submission date 18/12/2016