P3.7 Mian Hassan Ali opened bicycles rent shop.

t shop. During the month of June, Hassan completed the following transactions
for his bicycle rental business:
June 2 Began business by placing Rs. 72,000 in a business bank account.
Date Description Debit Credit
June 2 Bank 72000
Mir Hassan Ali’s Capital 72000
Initial investment by owner

3 Purchased supplies on account, Rs. 11,500.

Date Description Debit Credit
June 3 Supplies 11500
Creditos 11500

4 Purchased 10 bicycles for Rs. 25,000, paying Rs. 12,000 by cheque and agreeing to pay the balance in 30
days.
Date Description Debit Credit
June 4 10 bicycles asset 25000
Bank 12000
Creditors 13000

5 Purchased a small shed to hold the bicycles and to use for other operations for Rs. 29,000. Paid by cheque.
Date Description Debit Credit
June 5 Shed asset 29000
Bank 29000

6 Made an addition to the shed for Rs. 4,000. Paid by cheque

Date Description Debit Credit
June 6 Addition in Shed 4000
Bank 4000

8 Received cash of Rs. 14,700 for rentals during the first week of operation.
Date Description Debit Credit
June 8 Rental revenue 14700
Bank 14700

13 Hired two part-time assistants to help at Rs. 100 per day.

Date Description Debit Credit
June 13 Assistants hiring 100
Bank 100

14 Paid a maintenance person Rs .375 in cash.

Date Description Debit Credit
June 14 Maintenance Person Pay 300
Bank 300
15 Received cash, Rs. 15,000 for rentals during the second week of operation. Deposited the receipts in bank.
Date Description Debit Credit
June 14 Rental revenue 15000
Bank 15000

16 Paid the assistants for week’s work, Rs. 1200.

Date Description Debit Credit
June 16 Assistant Work Pay 1200
Bank 1200

20 Paid by cheque for the supplies purchased on June 3, Rs. 11,500.

Date Description Debit Credit
June 20 Supplies remaining amount 11500
Bank 11500

21 Paid repair bill on bicycles, Rs. 550 in cash.

Date Description Debit Credit
June 21 Repair Bill 550
Bank 550

22 Received cash for rentals during the third week of operation, Rs. 15,500. Deposited in bank.
Date Description Debit Credit
June 22 Rental revenue 15500
Bank 15500

23 Paid the assistant for the week’s work, Rs. 1200.

Date Description Debit Credit
June 23 Assistant Work Pay 1200
Bank 1200

26 Billed a customer for bicycle rentals Rs. 1,100.

Date Description Debit Credit
June 26 Debtors 1100
Rental Revenue 1100

28 Received cash for rentals during the week, Rs. 4,100. Deposited in bank.
Date Description Debit Credit
June 14 Rental revenue 4100
Bank 4100

29 Paid the assistant for a week’s work, Rs. 1,200.

Date Description Debit Credit
June 14 Assistant Work Pay 1200
 Bank 1200

30 Withdrew Rs. 15,000 for personal use.

Date Description Debit Credit
June 14 Drawings 15000
Bank 15000

Bicycle Rent Shop

Trial Balance
as at June 30, 1997
Dr. Cr.
Bank 72000
Supplies

Bicycle Rent Shop

Trial Balance
as at June 30, 1997
Dr. Cr.
Bank 72000
Supplies
Creditors 22,000
Debtors 24,000
Capital 500,000
Advance rent 120,000
Office supplies 50,000
Service revenue 87,000
Tools 80,000
Workshop supplies 9,000
Salaries expense 15,000
Gas and electricity 5,000
Drawings 15,000
Telephone charges 12000
609,000 609,000

Required
i Prepare journal entries to record the above transactions in the general journal.
ii Set up appropriate T accounts and post all the journal entries.
 iii Prepare a trial balance as of June 30, 1997.

P3.8 Mohammad Naseem Lashari opened Lashari Studios, a photography and portrait studio, on March 1 and completed the
following transactions during the month:
Mar 1 Began business by depositing Rs. 50,000 in the business bank account.
Date Description Debit Credit
Mar 1 Bank 50000
Lashari Capital 50000

2 Paid two months’ rent in advance for a studio, Rs. 9,000 by cheque.
Date Description Debit Credit
Mar 2 Two Months Rent Advance 9000
Bank 9000

3 Transferred personal photo equipment valued at Rs. 24,300 to the business.

Date Description Debit Credit
Mar 3 No amount as personal eqpt transferred

4 Ordered additional photography equipment, Rs. 12,500.

Date Description Debit Credit
Mar 4 Additional Eqpt 12500
Creditors 12500

5 Purchased office equipment for Rs. 17,800 paid by cheque.

Date Description Debit Credit
Mar 5 Office Eqpt 17800
Bank 17800

8 Received photo equipment ordered on March 4. Payment made by cheque.

Date Description Debit Credit
Mar 8 Photo Eqpt 12500
Bank 12500

10 Purchased photography supplies on credit, Rs. 700.

Date Description Debit Credit
Mar 10 photography supplies 700
Creditors 700
15 Received cash for portraits, Rs. 3,800.
Date Description Debit Credit
Mar 15 Bank 3800
Revenue from portraits 3800

16 Billed a customer for portrait, Rs. 750.

Date Description Debit Credit
Mar 16 Portrait Revenue 750
Debtors 750

21 Paid for one-half the supplies purchased on March 10, Rs. 350 by cash.
Date Description Debit Credit
Mar 21 Liability 350
Bank 350

24 Paid utility bill for March, Rs. 1,200 by cash.

Date Description Debit Credit
Mar 24 Utility Bill 1200
Bank 1200

25 Paid telephone bill for March, Rs. 700 by cheque.

Date Description Debit Credit
Mar 25 Telephone Bill 700
Bank 700

29 Received payment from customers billed on March 16, Rs. 750 by cheque.
Date Description Debit Credit
Mar 29 Portrait Revenue 750
Bank 750

30 Paid wages to an assistant, Rs. 400 in cash.

Date Description Debit Credit
Mar 30 Assistant wages 400
Bank 400

31 Withdrew cash for personal expenses, Rs. 1,200.

Date Description Debit Credit
Mar 31 Personal Drawings 1200
Bank 1200
Required
i Prepare journal entries to record the above transactions in the general journal.
ii Set up the following ledger accounts and post the journal entries: cash; bank; debtors; photography supplies;
prepaid rent; photography equipment; office equipment; creditors; Lashari’s capital; Lashari’s withdrawals;
portrait revenue; wages expense; utility expense; and telephone expense.
iii Prepare a trial balance for Lashari Studios as of March 31, 1997.