Accounting - Research Paper Example

e-School of Business Assignment No Fall – Semester Financial Accounting 101FAC109 George Majdalany Due Date: Sunday, October 21, 2012Maximum Marks: 100 MarksWeight: 10% of the course’s final gradeInstructions to Students:a. This is an individual, not a group assignmentb. Your assignment should have your name and student number typewritten in the allocated spaces in the cover page of this assignmentc. All answers must be submitted in hard-copy type-written formsd. Late submission of assignments is not acceptable.

Assignments not submitted on the 21st of October 2012 will have a grade of zero.e. Plagiarism will be penalized by a grade of zero on the full assignmentf. HBMeU Academic Dishonesty Policy will be strictly implemented.Problem 1. Bill Phinnes decides to open a cleaning and laundry service near the local college campus that will operate as a corporation. Analyze the following transactions for the month of June in terms of their effect on the basic accounting equation. Record each transaction by increasing (+) or decreasing (–) the dollar amount of each item affected.

Indicate the new balance of each item after a transaction is recorded. It is not necessary to identify the cause of changes in equity (20 Marks: 2 marks for each transaction).Transactions(1) Issued ordinary shares in exchange for $20,000 cash on June 1.(2) Purchased laundry equipment for $5,000 paying $3,000 in cash and the remainder due in 30 days. (3) Purchased laundry supplies for $1,200 cash.(4) Received a bill from College News for $300 for advertising in the campus newspaper. (5) Cash receipts from customers for cleaning and laundry amounted to $1,500. (6) Paid salaries of $200 to student workers. (7) Billed the Lion Soccer Team $200 for cleaning and laundry services.(8) Paid $300 to College News for advertising that was previously billed in Transaction 4. (9) Paid dividends of $900. (10) Incurred utility expenses for month on account, $200.

Use the following form to record the transactions:TransactionCash+Accounts Receivable+Laundry Supplies+Laundry Equipment=Accounts Payable+Share Capital+Revenues-Expenses-Dividends1 20,0000       =  +20,000       Balance 20,000         20,000       2 -3,000    +5,000  = +2000         Balance17,000     +5,000  = 2000+, 20,000        3 -2,000   +2000            Balance15,000   +2,000 + 5,000  =  2,000+20,000       4        =      300  Balance 15,000   +2,000+ 5,000 =2,000+ 20,000    -300 5 1500       =-1500         Balance 16,500   +2,000+5,000=500 +20,000  300  6        =     -200  Balance 16,500   + 2,000  + 5,000  =500  + 20,000   500  7        = 200        Balance 16500   +2,000+5,000=200 +20,000    -500 8 -300                Balance 16200   +2,000 + 5,000 =200 +20,000    -500  9 -900               -900Balance 15,300   +2,000+5,000=200+20,000   -500 -90010 -200            200   Totals 15,100   + 2,000 +5,000=200+20,000   -700 -900Problem 2.

Transactions for Tom Petty Company for the month of October are presented below. Journalize each transaction and identify each transaction by number. You may omit journal explanations.. (Total of 25 marks / 2.5 marks for each transaction)1. Issued ordinary shares in exchange for $40,000 cash.2. Purchased land costing $28,000 for cash.3. Purchased equipment costing $15,000 for $3,000 cash and the remainder on credit.4. Purchased supplies on account for $800.5. Paid $1,000 for a one-year insurance policy.6. Received $3,000 cash for services performed.7. Received $4,000 for services previously performed on account.8. Paid wages to employees for $2,500.9. Paid dividends of $1,000.10. Paid for Supplies purchased previously on account in transaction no.

4Use the following accounts names in the journal entries:Accounts PayableAccounts ReceivableWages ExpenseCashLandSuppliesPrepaid InsuranceService RevenueDividendsEquipmentShare Capital – OrdinaryUse the following format to journalize the transactions:Date Account Titles and Explanation Ref. Debit Credit1 Cash    40,000    Share Capital—Ordinary      40,000 2 Land   28,000    Cash 28000 3 Equipment 5,000 Cash 3,000 Accounts payable 2,0004 supplies 800 Accounts payable 8005 expenses 1,000 Cash 1,0006 cash 3,000 Accounts receivable 3,0007 cash 4,000 Accounts receivable 4,0008 expenses 2,500 Cash 2,5009 dividends 1,000 Cash 1,00010 accounts payable 800 Cash 800Problem 3.

Post the following transactions to T-accounts and determine each accounts ending balance. (Total of 15 marks / 3 marks for each T-account)1. Supplies 5,000 Accounts Payable 5,0002. Accounts Receivable 8,000 Service Revenue 8,0003. Cash 7,000 Accounts Receivable 7,0004. Accounts Payable 2,000 Cash 2,000Supplies accountAccounts payable 5,000 BAL c/d 5,000Accounts receivableService revenue 8,000 cash 7,000 Bal c/d 1,000 Accounts payableCash 2,000 Supplies 5,000Bal c/d 3,000Cash accountAccounts receivable 7,000 accounts payable 2,000Bal c/d 5,000Service revenueBal c/d 8,000 accounts receivable 8,000Problem 4.

The transactions of Medina Information Service are recorded in the general journal below. You are to post the journal entries to the accounts in the general ledger (forms provided below). After all entries have been posted, you are to prepare a trial balance on the form provided. (Total of 40 marks / 2.50 marks for each ledger account, 10 marks for the trial balance)General JournalJ1DateAccount Titles and ExplanationRef.DebitCredit2011Sept. 1Cash10150,000 Share Capital-Ordinary31150,000 (Issued ordinary shares for cash)4Delivery Trucks15560,000 Cash10120,000 Notes Payable20540,000 (Paid cash and issued 2-year, 9%, note for delivery trucks)8Rent Expense7192,000 Cash1012,000 (Paid September rent)15Prepaid Insurance130800 Cash101800 (Paid one-year liability insurance)18Cash1015,000 Delivery Revenue4005,000 (Received cash for delivery services)20Salaries Expense7261,000 Cash1011,000 (Paid salaries for current period)25Utility Expense735200 Accounts Payable201200 (Received a bill for September utilities)30Dividends3323,600 Cash1013,600 (Paid dividends)30Accounts Receivable1124,000 Delivery Revenue4004,000 (Billed customer for delivery service)General Ledger FormsCashAccount No.

101DateExplanationRef.DebitCreditBalance1st septIssued shares10150,00050,000 4th septDelivery truck10120,00030,000 8th septRent1012,00028,000 15th sept Prepaid insurance10180027,20018th septDelivery revenue1015,00032,20020th septsalaries1011,00031,200 30th sept dividends101360027,600Accounts ReceivableAccount No. 112DateExplanationRef.DebitCreditBalance30th septdelivery1124,0004,000Prepaid InsuranceAccount No. 130DateExplanationRef.DebitCreditBalance15th septCash payment130800800Delivery TrucksAccount No.

155DateExplanationRef.DebitCreditBalance4th septpurchases15560,00060,000Accounts PayableAccount No. 201DateExplanationRef.DebitCreditBalance25th septUtility expense201200200Notes PayableAccount No. 205DateExplanationRef.DebitCreditBalance4th sept Purchase of truck20540,00040,000Share Capital - OrdinaryAccount No. 311DateExplanationRef.DebitCreditBalance1st septShares issues31150,00050,000DividendsAccount No. 332DateExplanationRef.DebitCreditBalance30th septpayment33236003600Delivery RevenueAccount No.

400DateExplanationRef.DebitCreditBalance18th septCash income4005,0005,00030th septAccounts receivable4004,0009,000Rent ExpenseAccount No. 719DateExplanationRef.DebitCreditBalance8th septCash7192,0002,000Salaries ExpenesAccount No. 726DateExplanationRef.DebitCreditBalance20th septCash payment7261,0001,000Utility ExpenseAccount No. 735DateExplanationRef.DebitCreditBalance25th sept accounts payable 735 200 200Trial Balance FormMEDINA INFORMATION SERVICETrial Balance30-Sep-11 Accounts  Debit CreditCashAccounts receivable27,6004,000Prepaid insurance800Delivery trucks 60,000Accounts payable200Notes payable 40,000Share capital-ordinary 50,000dividends3,600Delivery revenue9,000Utility rent2002,000salaries 1,000 91,600106,800       ReferencesJoan, M. (2001).accounting basics. New York. Free press.