CLASS EXERCISES-SESSION-1,2 (For course instructor Guidance)

Learning Objective: What is accounting? The Accounting Equation. Users of Accounting. How to do transactiona ana !sis? How to "re"are journa entr!. How to "ost entries in edger accounts. How to "re"are tria ba ance.

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$ #o.& Use following title of accounts to complete journal entries of given transactions. CASH A/C RECEIVAB E A/C !A"AB E RE#$ E%!E#SE &RA'I#( CA!I$A SA ARIES E%!E#SE E)UI!*E#$ +UR#I$URE SERVICE I#C,*E SU!! IES -. 5. 7. ;. 2. <. =. ?. @. -3. AA BA CA *r.A /eposite/ into 0an1 Rs.234333 to start a 0usiness !ai/ rent for t6ree mont6s at Rs.5233 per mont6 Boug6t office e8uipment from B9Co. for Rs. -33334 pai/ to t6em Rs.7333 an/ promise/ to pa: t6e 0alance after two mont6s. Ren/ere/ services to clients an/ receive/ cas6 Rs. 2333 !urc6ase supplies for cas6 Rs. ;33 !ai/ salaries to staff Rs. 2;33 Boug6t furniture for Rs. 75334pai/ to >9Co. Rs.-533 an/ promise/ to pa: 0alance after one mont6 'it6/rew cas6 for personal use Rs. 7333 Bille/ to #asir for services ren/ere/ Rs. -5233 Receive/ from #asir Rs.2333 .#/T0U1T.O# !repare journal entries !ost to le/ger accounts !repare a trial 0alance at Bul: 7-45332

$ #o.' 'rite four steps of anal:sis for eac6 transaction -. *r. A6me/ investe/ cas6 Rs. -524333 5. Boug6t merc6an/ise for cas6 Rs.53333 7. !ai/ rent for t6e mont6 Rs.2333 ;. !urc6ase office supplies for Rs.-233 2. Sol/ goo/s for cas6 Rs.2333 <. !urc6ase goo/s on cre/it from #asir Ali Rs.-3333 =. !ai/ salaries to office staff Rs. -5233 ?. !ai/ to #asir Ali Rs.7233 @. Sol/ goo/s on cre/it to A0i/ Rs.-2333 -3. *erc6an/ise return to #asir Ali Rs.523 --. (oo/s were returne/ 0: A0i/ Rs.=23 -5. 'it6/rew cas6 for personal use Rs.-333 -7. Sol/ ol/ mac6ine at Rs.233

$ #o.* In Bul: 53324 #asir Bamal starte/ 0usiness an/ complete/ following transactions. Bul: Bul: 5 Bul: = Bul: -5 Bul: -= Bul: 53 Bul: 57 Bul: 5= He /eposite/ C -<24333 cas6 in a 0usiness 0an1 account.Duse cas6 as title. !urc6ase/ e8uipment for C 224333 from ABC Co. pai/ C534333 an/ 0alance will 0e pai/ after t6ree mont6. !ai/ rent for t6ree mont6s C -233 !urc6ase goo/s on cre/it from >6an 9 Co. C -533 !ai/ salaries to staff C 5233 !ai/ to >6an 9 Co.C =33 !ai/ insurance C ;33 #asir wit6/rew C -233 cas6 from t6e 0usiness for personal use

.#/T0U1T.O# AA !repare journal entries BA !ost to le/ger accounts CA !repare trial 0alance at Bul: 7-45335 $(2 Compute t6e missing amount in t6e accounting e8uation for eac6 entit:A Assets 1o4"an! A 1o4"an! , C E <24@33 Liabi ities C<-4?33 E Owner3s Equit! C7;4;33 7;4;33

1o4"an! 1

?-4=33

=@4?33

$(- Orac e 1or"oration starte/ -@%@ wit6 total assets of C24?-@ million an/ total lia0ilities of C54?<- million. At t6e en/ of -@%@4 ,racleFs total assets stoo/ at C=45<3 million4 an/ total lia0ilities were C742<2 million. Required -. &i/ t6e ownersF e8uit: of ,racle Corporation increase or /ecrease /uring -@%@E B: 6ow muc6E 5. I/entif: two possi0le reasons for t6e c6ange in ownersF e8uit: of ,racle /uring t6e :ear.

$(+ $elemar1eting AssociatesF 0alance s6eet /ata at *a: 7-4 53%54 an/ Bune 734 53%54 followA 5a! *&6 '78' $otal assets $otal ia0ilities Required +ollowing are t6ree assumptions a0out investments an/ wit6/rawals 0: t6e owner of t6e 0usiness /uring Bune. +or eac6 assumption4 compute t6e amount of net income or net loss of t6e 0usiness /uring Bune 53%5. -. $6e owner investe/ C24333 in t6e 0usiness an/ ma/e no wit6/rawals. 5. $6e owner ma/e no a//itional investments in t6e 0usiness 0ut wit6/rew C--4333 for personal use. C-234333 -3@4333 9une *76 '78' C-@24333 -7-4333

7. $6e owner investe/ C;-4333 in t6e 0usiness an/ wit6/rew C<4333 for personal use. $. #O. : -. >6ali/ investe/ in 0usiness cas6 Rs.;33334 office e8uipment Rs.<34333 5. !urc6ase merc6an/ise for cas6 Rs. <333 7. !urc6ase goo/s on cre/it from Ga6i/ Rs.-3333 ;. Sol/ merc6an/ise on cre/it to Amir Rs.-3333 2. !ai/ rent eHpense Rs.<33 <. Sol/ merc6an/ise for cas6 Rs. 7233 =. Earne/ commission Rs. -3333 ?. !urc6ase supplies on cre/it from Aleem Rs. ?33 @. !ai/ traveling eHpense Rs. <23 -3. Sol/ merc6an/ise to *r. >areem Rs. ;333 on cre/it. --. >6ali/ wit6/rew cas6 for personal use Rs. 7333 -5. Ren/ere/ services to client an/ receive/ commission Rs. 5333 -7. !ai/ insurance for t6e mont6 Rs. 233 .#/T0U1T.O# AA !repare journal entries BA !ost to le/ger accounts CA !repare a trial 0alance at Bul: 7-45335

$. #O. ; -. >6ali/ investe/ in 0usiness Rs.;33334 +urniture Rs.5;43334 e8uipment Rs.-2333 5. !urc6ase merc6an/ise for cas6 Rs. <333 7. !urc6ase office stationar: for Rs.5333 ;. !urc6ase goo/s on cre/it from Ga6i/ Rs.-3333 2. Sol/ merc6an/ise on cre/it to Amir Rs.-3333 <. !ai/ rent eHpense Rs.<33 =. Sol/ merc6an/ise for cas6 Rs. 7233 ?. Bille/ to *r. Bilal for service ren/ere/ Rs. -3333 @. !urc6ase supplies on cre/it from Aleem Rs. ?33 -3. !ai/ traveling eHpense Rs. <23 --. Sol/ merc6an/ise to *r. >areem Rs. ;333 on cre/it. -5. Receive/ cas6 from *r. >areem Rs.-233 -7. >6ali/ wit6/rew cas6 for personal use Rs. 7333 -;. !ai/ insurance for t6e mont6 Rs. 233 -2. Receive/ cas6 from *r. Bilal Rs.?333 .#/T0U1T.O# AA !repare journal entries

BA CA

!ost to le/ger accounts !repare a trial 0alance at Bul: 7-45335

$() Helen Ingersoll owns an/ operates an interior /esign stu/io calle/ Ingersoll Interiors. $6e following amounts summariIe t6e financial position of 6er 0usiness on August 7-4 53%5A Owner3s Assets Liabi ities Equit! He en Accounts Accounts .ngerso 6 1ash < 0eceivab e < /u"" ies < Land = %a!ab e < 1a"ita 54523 -4233 -54333 ?4333 =4=23 J K

Bal.

&uring Septem0er 53%54 t6e following events occurre/. a. Ingersoll in6erite/ C534333 an/ /eposite/ t6e cas6 in t6e 0usiness 0an1 account. 0. !erforme/ services for a client an/ receive/ cas6 of C=33. c. !ai/ off t6e 0eginning 0alance of accounts pa:a0le. /. !urc6ase/ supplies on account4 C-4333. e. Collecte/ cas6 from a customer on account4 C-4333. f. Investe/ personal cas6 of C-4333 in t6e 0usiness. g. Consulte/ on t6e interior /esign of a major office 0uil/ing an/ 0ille/ t6e client for services ren/ere/4 C54;33. 6. Recor/e/ t6e following 0usiness eHpenses for t6e mont6A -. !ai/ office rent4 C@33. 5. !ai/ a/vertising4 C-33. i. Sol/ supplies to anot6er 0usiness for C-23 cas64 w6ic6 was t6e cost of t6e supplies. j. 'it6/rew cas6 of C-4-33 for personal use. Required

-. Anal:Ie t6e effects of t6e prece/ing transactions 5. !repare (eneral Bournal entries of a0ove transactions. 7. !repare (eneral e/ger. ;. !repare $rial Balance for t6e mont6 en/e/ Septem0er 7345335 2. !repare t6e income statement of Ingersoll Interiors for t6e mont6 en/e/ Septem0er 734 53%5. <. !repare t6e 0alance s6eet of Ingersoll Interiors at Septem0er 734 53%5. $ (&7 +ollowing transactions were complete/ 0: *r.16ali/ /uring t6e mont6 of Bul:435. Bul: -A >6ali/ investe/ in 0usiness cas6 Rs.22333 4 office supplies Rs.-2334 office e8uipment Rs.;2333 Bul:7A ,0taine/ loan from 0an1 Rs.-334333 Bul: 2A !urc6ase office e8uipment from >arim 9Co. for Rs.52333 an/ pai/ Rs.-5333 Bul: -3A !ai/ rent for office premises in a/vance for t6ree mot6s Rs.7333 per mont6. Bul: -5A !urc6ase goo/s on cre/it from ABC 9 Co. Rs 52333 Bul: -2A Sol/ merc6an/ise to >as6if Rs.2333 Bul: -< !ai/ salaries Rs.;233 Bul: 53A !ai/ to >arim Rs.5333 Bul: 57A Receive/ form >as6if Rs.-233 Bul: 52A !ai/ to ABC 9 Co. Rs.7333 Bul: 5=A !ai/ installment of 0an1 loan Rs 2333 Bul: 73A !ai/ a/vertising eHpense Rs 7333 .#/T0U1T.O# !repare journal entries4 $ Laccount an/ $rial Balance. $(&& Recor/ing transactions /irectl: in t6e le/ger4 preparing a trial 0alance >en *aIanec o0taine/ a corporate c6arter form t6e state of !enns:lvania an/ starte/ a ca0le television service. &uring t6e first mont6 of operations *aIanec complete/ t6e following selecte/ transactionsA a. *aIanec 0egan t6e 0usiness wit6 an investment of C734333 cas6 an/ a 0uil/ing value/ at C234333. $6e corporation issue/ common stoc1 to *aIanec. 0. Borrowe/ C524333 from t6e 0an14 signe/ a note pa:a0le. c. !ai/ C754333 for transmitting e8uipment. /. !urc6ase/ office supplies on account4 C;33. e. !ai/ emplo:ee salar:4 C-4733. f. Receive/ C233 for ca0le $V service performe/ for customers. g. Sol/ ca0le service to customers on account4 C54733. 6. !ai/ C-33 of t6e account pa:a0le create/ in /.

i. Receive/ a C<33 0ill for utilit: eHpense t6at will 0e pai/ in t6e near future. j. Receive/ cas6 on account4 C-4-33. 1. !ai/ t6e following cas6 eHpenseA D-. Rent on lan/4 C-4333 D5. A/vertising4 C?33. l. &eclare/ an/ pai/ /ivi/en/s of C54<33. 0equired: -. ,pen t6e following $LaccountsA cas6M Accounts Receive/M ,ffice SuppliesM $ransmitting E8uipmentM Buil/ingM Accounts !a:a0leM #ote !a:a0leM Common Stoc1M &ivi/en/sM Service RevenueM Salar: EHpenseM Rent EHpenseM A/vertising EHpenseM Utilities EHpense. 5. Recor/ t6e a0ove transactions in t6e $Laccounts using a journal. Use t6e letters to i/entif: t6e transactions. 7. $rial Balance