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-------------------------------------------------------------------------------------------------------------------Accounting ACCT 102 Section 1
Assignment 2
10 Marks
Deadline for Submission November 30th
Note: Assignment should be uploaded on the portal
No marks will be given to assignments sent by e-mail
Salem Company started its operations on January 1, 2016. The following transactions took
place during the first month of operations:
Jan 1: Salem invests $480,000 cash to start the business.
Jan 5: Purchased furniture for $72,000, paying $18,000 in cash and sign a note for the remaining
balance.
Jan 8: Purchased supplies for $3,600 on credit.
Jan 12: Paid $6,300 cash for January rent.
Jan 18: Paid $1,800 cash for office supplies purchased on January 8.
Jan 24: Services billed to customers amount to $36,000.
Jan 25: Received utility bills for $5,400 for the month of January.
Jan 27: Paid $19,800 cash for salaries.
Jan 29: Received $27,000 cash from customers in payment for services billed on January 24.
Jan 31: Salem withdrew $10,100 from the business for personal use.
Required:
1- Prepare Journal entries to record the above transactions.
2- Post to the appropriate ledger accounts.
3- Prepare the trial balance on January 31, 2016.
4. Prepare financial statements for the month.
General Journal
Date
Jan 1
Cash
Ref.
Debit
480,000
Salem , Capital
Jan 5
Furniture
480,000
72,000
Cash
18,000
54,000
Notes Payable
Jan 8
Supplies
3,600
Accounts Payable
Jan 12
Rent Expense
3,600
6,300
Cash
Jan 18
Supplies
6,300
1,800
Cash
Jan 24
Accounts Receivable
1,800
36,000
Service Revenue
Jan 25
Utilities Expense
36,000
5,400
Utilities Payable
Jan 27
Salaries Expense
5,400
19,800
Cash
Jan 29
Cash
19,800
27,500
Service Revenue
Jan 31
Salem , Drawing
Cash
Credit
27,500
10,100
10,100
General Ledger
Cash
DATE
ITEM
POST.
REF.
Jan 1
Jan 5
Jan 12
Jan 18
Jan 27
Jan 29
Jan 31
DEBIT
CREDIT
480,000
18,000
6,300
1,800
19,800
27,500
10,100
BALANCE
DEBIT
CREDIT
480,000
462,000
455,700
453,900
434,100
461,600
451,500
Furniture
DATE
ITEM
POST.
REF.
Jan 5
DEBIT
CREDIT
BALANCE
DEBIT
CREDIT
72,000
CREDIT
BALANCE
DEBIT
CREDIT
480,000
72,000
Salem, Capital
DATE
ITEM
POST.
REF.
DEBIT
Jan 1
480,000
Salem, Drawing
DATE
Jan 31
ITEM
POST.
REF.
DEBIT
10,100
CREDIT
BALANCE
DEBIT
CREDIT
10,100
Supplies
DATE
ITEM
POST.
REF.
Jan 8
Jan 18
DEBIT
CREDIT
3,600
1,800
BALANCE
DEBIT
CREDIT
3,600
1,800
Service Revenue
DATE
ITEM
POST.
REF.
DEBIT
CREDIT
Jan 24
Jan 29
36,000
27,500
BALANCE
DEBIT
CREDIT
36,000
63,500
Rent Expense
DATE
ITEM
POST.
REF.
Jan 12
DEBIT
CREDIT
6,300
BALANCE
DEBIT
CREDIT
6,300
Utilities Expense
DATE
Jan 25
ITEM
POST.
REF.
DEBIT
5,400
CREDIT
BALANCE
DEBIT
CREDIT
5,400
Salaries Expense
DATE
ITEM
POST.
REF.
Jan 27
DEBIT
CREDIT
BALANCE
DEBIT
CREDIT
19,800
CREDIT
BALANCE
DEBIT
CREDIT
54,000
19,800
Notes Payable
DATE
ITEM
POST.
REF.
DEBIT
Jan 5
54,000
Utilities Payable
DATE
ITEM
POST.
REF.
DEBIT
CREDIT
Jan 25
5,400
BALANCE
DEBIT
CREDIT
5,400
Accounts Payable
DATE
ITEM
POST.
REF.
Jan 8
Jan 18
DEBIT
CREDIT
3,600
1,800
BALANCE
DEBIT
CREDIT
3,600
1,800
Accounts Receivable
DATE
Jan 24
ITEM
POST.
REF.
DEBIT
36,000
CREDIT
BALANCE
DEBIT
CREDIT
36,000
Trial balance
Salem Company
Trial balance
For the Year Ended January 31, 2016
ACCOUNT NAME
DEBITS
Cash
451,500
Furniture
72,000
Supplies
3,600
Accounts Payable
Notes Payable
Utilities Payable
Service Revenue
Khalifa, Capital
Khalifa, Drawing
10,100
Rent Expense
6,300
Accounts Receivable
36,000
Utilities Expense
5,400
Salaries Expense
19,800
Total
604,700
CREDITS
1,800
54,000
5,400
63,500
480,000
604,700
Salem Company
Income Statement
For The Month Ended January 31, 2016
Revenue
Services Revenue
36,000
Total Revenue
36,000
Expense
Rent Expense
6,300
Supplies Expense
1,800
Utility Expense
5,400
Salary Expense
19,800
Total Expense
Net Income
33,300
2,700
Salem Company
Owners Equity Statement
For The Month Ended January 31, 2016
$0
Add: Investment
480,000
Net Income
2,700
482,700
10,000
472,700
Salem Company
Balance Sheet Statement
For The Month Ended January 31, 2016
Assets
Cash
452,900
Accounts Receivable
9,000
Furniture
72,000
Supplier
1,800
Total Assets
535,700
63,000
Owners Equity
Salem, capital
Total Liabilities and Owners Equity
472,700
472,700
Salem Company
Statement of Cash Flows
For the Year Ended January 31, 2016
Cash flow from operating activities:
Cash receipt from revenues
Cash payments for expenses
Net cash provided by operating activities
Cash flow from investing activities:
Purchase of furniture
Cash flow from financing activities:
Investment by the owner
Drawing by the owner
Net increase in cash
Cash at the beginning of the period
Cash at the end of the period
$ 36,000
(33,300)
2,700
(72,000)
$ 480,000
(10,000)
470,000
452,900
0
$452,900