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Foundamental of accounting I group assignment

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4 views

Foundamental of accounting I group assignment

Uploaded by

abekabe070
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Jigjig university

College of business and economic

Department Accounting and Finance

Group Assignment One

General Instruction
1. This Assignment is to be done group 1-5 member .
2. Form of submission: Hardcopy to be submitted to your instructor.
4. Submission date: January during final exam day
5. Cheating is strictly forbidden.

Complied by A.A Page 1


Q1. Brief Discussion Questions
a) Why is accounting considered a language of business? How is it related to
management process?
b) Discuss about the four basic financial statement (income statement, statement of owners’
equity, balance sheet, and statement of cash flows); comparing and contrasting their
differences in merchandising firms Vs. service providing entities
c) Discuss about the four finance functions (financial management decisions)

Q2. Short workout questions


a) Assume the following data extracted from accounting records of XYZ Company, a
merchandising firm

Gross Purchase Br.


400,
000
Sales returns and allowance 5,000
Sales discount 1,000
Purchase returns and allowance 2,000
Purchase discount 500
Gross sales 800,000
Ending inventory 40,000
Beginning inventory 50,000
Transportation in 1500
Operating expenses 150,000
Non-operating Expenses 10,000
Income Tax 30%

Required: Compute Net income (net loss) for the period

b) Assume that assets and liabilities increased by Br.240,000, and Br. 120,000 respectively
during a given year. Assume the following additional particulars further
 Revenues generated during the year…. Br.80,000
 Additional investment made by the owner during the year..............Br. 70,000
 Amount withdrawn by the owner during the year.......$10,000
Required: Determine the amount of expense incurred during the year

c) For each of the following, give an example of a transaction that creates the described
effects:
a) Decreases a liability and decreases an asset
b) Increases an asset and decreases another asset
c) Decreases an asset and decreases owners’ equity
d) Increases a liability and decreases owners’ equity
e) Increases an asset and increases a liability
f) Decreases an asset and decreases a liability
Complied by A.A Page 2
d) Given below is a list of selected transactions performed by John Décor during the
month of December 2017.
Dec. 1 Mr. John transferred cash from his personal account to the business to be used in
the business, Birr 150,000.
“ 1 Paid five months’ rent in advance, Birr 30,000
“ 1 Paid annual Insurance premium of Birr 7,200
“ 11 Purchased a truck for Birr 110,000 by paying Birr 60,000 Cash and giving a
note payable for the difference.
“ 12 Purchased equipment on account, Birr 11,000 “
13 Purchased supplies on account Birr 2400.
“ 14 Paid insurance premiums of Birr 8100
“ 15Received cash for services completed Birr
36,000. “ 18 Paid salaries of Birr 9000.
“ 21 Paid its liabilities for the purchase of equipment made on December 12 “
24 Provided Service on account, Birr 52,000
“ 27 Paid utilities expense Birr 12,500.
“ 27 Paid miscellaneous expenses Birr 1,200.
“ 28 Received cash from customers on account birr 24,000 “
30 Paid salaries to employees Birr 5,000
“ 30. The owner withdrew Birr 2,000 for personal use.
Required:
a) Record the above transactions in General Journal (Journalize the above transactions)
b) Post each entry to the perspective account, using “T” account and determine account
balance for each account. Assume the following beginning balances on December 1
for selected accounts: Cash, Birr 22,000; Equipment, Birr 10,000; Supplies, Birr
1,000; Accounts Receivable, Birr 11,000
c) Prepare a trial balance
d) If accounting period for the company ends on December 31, journalize the relevant
adjustments and post the entries to the ledger
e) Prepare adjusted trial balance
f) Prepare the following financial statements: (a) Income statement, (b) Statement of
owners’ equity, and (c) balance sheet

Complied by A.A Page 3

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