Reference no: EM133209715

Part 1:

Question 1. Guji company had the following amounts of assets and liabilities at the beginning and end of last year:
Assets Liabilities
Beginning of the year..................Br.75, 000 Br. 30,000
End of the year............................120,000 46,000
Determine the net income or net loss of Guji for the year under each of the following unrelated assumptions:
a) Owner made no additional investment and withdrew no amount during the year
b) Owner made no additional investment but withdrew Br.17,500 to pay for her personal expenses
c) Owner withdrew no amount during the year but made additional investment of Br. 32,500 cash.
d) Owner withdrew Br.17, 500 and invested Br.25, 000 cash during the year.

2. 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
Mimi started a new business called Omo Company and completed the following transactions during November:
Nov.1 Mimi transferred 56,000 out of a personal savings bank account to a checking accounts her in the name of the business.
1. Rented office space and paid cash for the month's rent of 800
3. Purchased electrical equipment for 14,000 by paying 3,200 and agreeing to pay the remaining balance in six months
5. Purchased office supplies by paying 900 cash.
6. Completed electrical work and received 1,000 cash for doing the work.
13. Purchased 3,800 of office equipment on credit
15. Completed electrical work on credit in the amount of 4,000
20. Paid for the office equipment purchased on Nov.9
24. Billed a customer for electrical work completed 600
28. Received 4,000 for the work completed on Nov.15
30. Paid salary of employees 1,200
30. Paid the monthly utilities bill 440
30. Withdrew 700 from the business for personal use

Required:
1. Arrange the following asset, liability and owner's equity titles in a table just like illustrated in this unit: Cash, Accounts Receivable, Office Supplies, Office Equipment, Electrical Equipment, Accounts Payable and Mimi Capital.
2. Use additions and subtractions to show the effect of each transaction on the items in the equation. Show new totals after each transaction. Next to each change in owners' equity state whether the change was caused by an investment, revenue, expense or withdrawal.
3. Prepare an income statement, a statement of owner's equity, and a balance sheet

Part 2:

Question 1. Given below is a list of selected transactions performed by John Décor during the month of September 2002, the first month of operation.
a) Record the transactions in General Journal
b) Post each entry to the perspective account. Use the four - column account.
c) Prepare a trial balance
d) Prepare a worksheet. Assume the following adjustment for the accounts and journalize them.
e) Prepare a Balance sheet, Income statement and statement of owner's equity
f) Close the temporary accounts.
Sept. 10 Mr. John transferred cash form his personal account to be used in the business, Birr 10,000.
" 10 Paid rent for the month, Birr 500
" 11 Purchased a truck for Birr 12,000 by paying Birr 3,000 Cash and giving a notes payable for the
difference.
Sept. 12 Purchased equipment on account Birr 1,460.
" 13 Purchased supplies on account Birr 240.
" 14 Paid insurance premiums of Birr 170 (Dr. prepaid insurance)
" 15 Received cash for services completed Birr 360.
" 16 Purchased Supplies on account Birr 240.
" 18 Paid salaries of Birr 900.
" 21 Paid its liabilities for the purchase of equipment
" 24 Recorded sales on account Birr 2,080
" 26 Received an invoice for truck expense Birr 115
" 27 Paid utilities expense Birr 205.
" 27 Paid miscellaneous expenses Birr 73.
" 28 Received cash from customers on account birr 1,420
" 30 Paid salaries to employees Birr 950
" 30. the owner withdrew Birr 1, 750 for personal use.

Part 3:
Question 1. You are provided with the following data from the records of three merchandising companies :(a), (b) and (c). Determine each of the missing numbers for each company.
a b c
Invoice cost of merchandise purchase Br.90, 000 Br.40, 000 Br.30, 500
Purchase discounts 4000 ? 650
Purchase returns and allowances 3,000 1,500 1,100
Transportation-In ? 3,500 4,000
Merchandise inventory (beginning of period) 7,000 ? 9,000
Total cost of merchandise purchases 89,400 39,500 ?
Merchandise inventory (end of period) 4,400 7,500 ?
Cost of goods sold ? 41,600 34,130

Question 2. The following unadjusted trial balance was prepared at the end of the fiscal year for Tenkir Company:

TENKIR COMPANY
Unadjusted Trail Balance
July 31, 2000
Cash........................................................ $ 4,200
Merchandise Inventory................................. 11,500
Store supplies............................................ 4,800
Prepaid Insurance....................................... 2,300
Store equipment......................................... 41,900
Accumulated depreciation-Store Equipment... $ 15,000
Accounts payable........................................ 9,000
Gidey Tinker, capital................................... 35,200
Gidey Tenkir, withdrawals ............................ 3,200
Sales........................................................ 104,000
Sales discounts.......................................... 1,000
Sales returns and allowances........................ 2,000
Cost of goods sold....................................... 37,400
Depreciation expense - Store equipment........ -
Salaries expense....................................... 31,000
Insurance expense..................................... -
Rent expense............................................ 14,000
Store supplies expense............................... -
Advertising expense................................... 9,900

Totals......................................................$163,200 $163,200
Rent and salaries expense are equally divided between the selling and the general and administrative functions. Tenkir Company uses the periodic inventory system.

Required:
1. Prepare adjusting journal entries for the following:
a. Store supplies on hand at year-end amount to $1,650.
b. Expired insurance, an administrative expense, for the year is $1,500.
c. Depreciation expense, a selling expense, for the year is $1,400.
d. A physical count of the ending merchandise inventory shows $11,100 of goods on hand.
2. Prepare a multiple-step income statement.
3. Prepare a single-step income statement.
4. Prepare all the necessary closing entries.