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Assignment on Transaction

In: Business and Management

Submitted By ashrafpharmm
Words 3112
Pages 13
Transaction analysis
Problem # 1
Mr. Abul operates premium service, which has the following assets: Cash tk. 40,000, supplies tk. 2,000, delivery van tk. 30,000 and truck tk. 60,000. The business owes tk. 12,000 for supplies previously purchased. The following transactions occur in the month of March 2004: March 01: Paid office rent for 3 month’s advance tk. 6,000. 02: Purchased delivery van for cash tk. 20,000. 04: Purchased supplies on account tk. 2,500. 06: Purchased supplies for cash tk. 1,000. 10: Service rendered to a customer and immediately collected tk. 6,000 12: Service rendered to a customer on account tk. 13,000. 18: Paid utility expense of the month tk. 1,000 cash. 22: Paid for the supplies purchased on March 04. 31: The owner withdrew tk. 1,800 from the business.
Instructions: (a) Compute the Opening capital/equity. (b) Prepare a tabular analysis of the transactions using the following account titles: Cash, Accounts receivable, Prepaid rent, Supplies, Delivery van, Truck, Accounts payable, Y’s capital.

Problem # 2
On June 01 2004 Mr. Tanim started an accounting consultancy agency. The following transactions took place in the month of June: 01: Invested tk. 20,000 as capital in the business. 04: Hired a personal secretary at a monthly salary of tk. 4,000. 06: Purchased supplies for tk. 200 cash. 09: Paid advertising expense tk. 6,000 cash. 12: Purchased office equipment for tk. 30,000 on account. 15: Earned tk. 40,000 for service rendered, 40% of which is received in cash from the customer and the balance is billed to customer on account. 20: Paid the salary of the personal secretary. 27: Received tk. 4,000 from a customer in advance for accounting service to be performed in near future. 28: Borrowed from bank tk. 20,000 cash by signing a note payable.
Show the effects of transactions on the accounting equation.

Problem # 3
Show the impact of the following transactions on financial position: * Purchased goods tk. 4,000 cash from supplier. * Purchased goods tk. 6,000 on account from supplier. * Sold goods tk. 6,000 cash to customer. * Sold goods tk. 7,000 on account to customer. * Purchased supplies tk. 600 cash. * Purchased equipment tk. 10,000 cash. * Charge depreciation tk. 1,000 per year. * Paid rental expense tk. 5,000 cash. * Paid salary expense tk. 7,000 cash. * Placed an order for purchase tk. 3,000 from outside suppliers. * Earned service revenue tk. 4,000 cash.

Problem # 4
Listed below are the transactions of Mr. Y for the month of January 2002: Jan 01: Invested cash in the business tk. 50,000. Jan 05: Purchased supplies tk. 500 for cash. Jan 10: Completed service revenue for tk. 5,000, out of which tk. 2,000 received in cash. Jan 15: Paid salaries tk. 3,000 cash to the employee. Jan 20: Purchased office furniture tk. 10,000 on account. Jan 28: Borrowed from the bank by signing a notes payable tk. 12,000. Jan 31: Paid the accounts payable in full of transaction 20.
Requirement: Prepare a tabular analysis of the transactions using the following account titles: Cash, Accounts receivable, Supplies, Office furniture, Accounts payable, Notes payable, Y’s capital.

Problem # 5
Listed below are the transactions of Mr. Q for the month of January 2002: Jan 01: Invested cash in the business tk. 40,000. Jan 05: Purchased Office supplies tk. 600 for cash. Jan 10: Completed service revenue for tk. 6,000, out of which 50% received in cash. Jan 15: Paid rent tk. 3,000 cash for the next two months. Jan 20: Purchased equipment tk. 20,000 on account. Jan 28: Borrowed from the bank by signing a notes payable tk. 12,000. Jan 31: Withdrew tk. 3,000 from business.
Requirement: Prepare a tabular analysis of the transactions using the following account titles: Cash, Accounts receivable, prepaid rent, Supplies, equipment, Accounts payable, Notes payable, Q’s capital.

Problem # 6
Show the effects of the following transactions on the accounting equation: Jan 01: Mr. Romeo has a balance of tk. 10,000 cash, 12,000 tk. Accounts receivable, Delivery van of tk. 18,000, an accounts payable of tk. 5,000. Jan 05: Earned revenue of tk. 5,000 cash for service provided. Jan 10: Services provided but unbilled tk. 3,500. Jan 15: Incurred expense of tk. 3,000 on account. Jan 20: Withdrew tk. 2,000 cash from the business. Jan 31: Acquired a delivery van of tk. 6,000 on cash.

Problem # 7
On July 31, Mr. X has the following account balances: Cash tk. 4,000, Accounts receivable tk. 7,000, Supplies tk. 2,000, Office equipment tk. 20,000, Accounts payable tk. 4,000, Notes payable tk. 3,500 and X’s capital tk. 25,500. The following transactions occur in the month of August: 1. Paid office rent tk. 2,000 for August. 2. Purchased supplies of tk. 3,000 on account. 3. Earned revenue of tk. 15,000. 4. Borrowed tk. 5,000 from a bank by signing notes payable. 5. Performed legal services for client on account tk. 4,500. 6. Paid monthly salary expense tk. 5,000. 7. Withdrew an amount of tk. 2,000 from the business. 8. Purchased an office equipment of tk. 5,000 on account. Requirement: Prepare a tabular analysis of the transactions using the following account titles: Cash, Accounts receivable, Supplies, Office equipment, Accounts payable, notes payable and X’s capital.

Problem # 8
Mr. Y operates premium food service, which has the following assets: Cash tk. 30,000, Food supplies tk. 2,000, Tools tk. 20,000 and truck tk. 80,000. The business owes tk. 15,000 for supplies previously purchased. The following transactions occur in the month of January 2003: Jan. 1: Paid the rent on the shop space for two months in advance tk. 2,000. Jan. 2: Purchased tools for cash tk. 2,000. Jan. 4: Purchased food supplies on account tk. 2,500. Jan. 6: Purchased food supplies for cash tk. 1,000. Jan. 10: Food supplied to a customer and immediately collected tk. 5,000. Jan. 12: Food supplied to a customer on account tk. 4,000. Jan. 18: Paid utility expense of the month tk. 1,500. Jan. 22: Paid for the supplies purchased on Jan. 4. Jan. 31: The owner withdrew tk. 1,200 from the business.
Instructions: (a) Compute the Opening capital/equity. (b) Prepare a tabular analysis of the transactions using the following account titles: Cash, Accounts receivable, prepaid rent, Supplies, Tools, Truck, Accounts payable, Y’s capital.

Problem # 9
On June 1, Miss Chitra has the following account balances: Cash tk. 5,000, Accounts receivable tk. 6,000, Supplies tk. 1,000, Office equipment tk. 30,000, Accounts payable tk. 5,000, Notes payable tk. 2,500 and Chitra’s capital tk. 34,500. The following transactions occur in the month of June: 9. Paid rent tk. 3,000 for the next month in advance. 10. Purchased supplies of tk. 300 cash. 11. Earned revenue of tk. 18,000 cash. 15. Borrowed tk. 7,000 from a bank by signing notes payable. 21. Performed tax consulting services for client on account tk. 6,500. 21. Paid monthly salary expense tk. 5,000 cash. 22. Withdrew an amount of tk. 2,000 from the business. 23. Purchased an office equipment of tk. 5,000 on account. 26. Charge depreciation 10% p.a. on office equipment. (1 year = 12 months) 30. Bad debt is estimated tk. 500 on accounts receivable.
Instructions: Prepare a tabular analysis of the transactions using the following account titles: Cash, Accounts receivable, Supplies, prepaid rent, Office equipment, Accounts payable, notes payable, accumulated depreciation and X’s capital.

Problem # 10
Trent Company, engaged in a service business, completed the following selected transactions during July 1994: * Purchased office equipment on account. * Paid an account payable. * Earned service revenue on account. * The company borrowed cash from a relative of the owner; a note was signed bearing no interest. * Paid July salaries to employees. * Received cash on account from a charge customer. * Received gas and oil bill for July. * Purchased truck for cash.
Use a tabular form to indicate the effect of each transaction on the accounting equation using (+) for increase and (-) for decrease. You will need columns for Cash, Accounts Receivable, Trucks, Office Equipment, Accounts Payable, Notes Payable and Trent, Capital. No dollar amounts are needed and you need not fill in the Explanation column.

Problem # 11
Indicate the immediate amount of change (if any) in the owner’s equity balance based on each of the following transactions: * The owner invested $55,000 cash in the business. * Land costing $12,000 was purchased by paying cash. * The company performed services for a customer who agreed to pay $26,000 in one month. * Paid salaries for the month $14,000. * Paid $6,000 on an account payable.

Problem # 12
Give examples of transactions that would have the following effects on the items in a firm’s financial statements: * Increase cash; decrease some other asset. * Decrease cash; increase some other asset. * Increase an asset; increase a liability. * Increase an expense; decrease an asset. * Increase an asset other than cash; increase revenue. * Decrease an asset; decrease a liability.

Problem # 13
For each of the following transactions, identify the type(s) of accounts affected: * Purchased a truck for cash, $15,000 * Purchased land for $65,000; payment to be made next month. * Paid $1,600 cash for the current month’s utilities. * Paid for the land purchased in (b).

Problem # 14
Which of the following transactions result in an increase in an expense? * Cash of $84,000 was paid to employees for services received during the month. * Cash of $7,000 was paid for some advertising services during the month. * Paid $14,500 on a loan payable. * Paid $740 cash in payment of an account payable. * The owner withdrew $1,280 cash.

Problem # 15
Vince Garcia Company began operations on March 1, 1994. During March, the company engaged in the following transactions: * Vince Garcia invested $900,000 in the business. * Vince’s father loaned $450,000 to the company; a note was signed bearing no interest. * The following assets were purchased for cash: trucks, $108,000; equipment, $180,000; and office furniture, $225,000. * Equipment was purchased on account, $135,000.
Instructions: (a) Prepare a summary of the above transactions. Include money columns for Cash, Trucks, Equipment, Office Furniture, Accounts Payable, Notes Payable, and Vince Garcia, Capital. Determine new balances after each transaction. (b)Prepare a balance sheet as of March 31, 1994.

Problem # 16
Jim Martin Company, which provides financial advisory services, completed the following transactions during October 1994: * Received $360,000 cash investment from the owner. * The company borrowed $48,000 from a friend of the owner; a note was signed bearing no interest. * The company bought $300,000 of computer equipment for cash. * Cash was received from a customer for services performed $22,800. * Services were performed for a customer who agreed to pay within a month, $18,000. * Employee salaries were paid, $19,800. * The customer in transaction (5) made a partial payment of $4,800 on the amount owed the company. Instructions: (a) Prepare a summary of the above transactions. Include money columns for Cash, Accounts Receivable, Equipment, Notes Payable, and Jim Martin, Capital. Determine balances after each transaction. (b) Prepare an income statement for October 1994. (c) Prepare a balance sheet as of October 31, 1994.

Problem # 17
The transactions appearing below are those of Heather Hayes Company for April 1994. This was the first month of operation of the business. * Owner invested cash, $150,000. * Purchased equipment on account, $45,000. * Earned service revenue on account, $36,000. * Collected cash on account $12,000. * Paid salaries, $9,000. * Paid rent, $6,000. * Received bill for advertising for April, $1,800. * Paid an account payable, $45,000.
Instructions: (a) Prepare a summary of the above transactions. Include money columns for Cash, Accounts Receivable, Equipment, Accounts Payable, and Heather Hayes, Capital. Determine new balances after each transaction. (b) Prepare an income statement for April 1994. (c) Prepare a statement of owner’s equity for April 1994. (d) Prepare a balance sheet as of April 30, 1994.

Problem # 18
BETTY MILLS COMPANY
Balance Sheet
April 30, 1994 Cash ……………………………………………… Tk. 28,000 Accounts receivable…………………………………. 80,000
Land ………………………………………………... 300,000
Total assets ………………………………………… $408,000
Liabilities and Owner’s Equity Liabilities:
Accounts payable………………………………... Tk. 72,000 Owner’s equity:
Betty Mills, capital……………………………….. 336,000
Total liabilities and owner’s equity………………. Tk.408,000
The summarized transactions for May 1994 were as follows: * The owner invested additional Tk.100,000 cash in the business. * Collected Tk.60,000 on accounts receivable. * Paid Tk.52,000 on accounts payable. * Sold land costing Tk.100,000 for Tk.100,000 cash. * Decorating services were rendered to a major department store on account, Tk.190,000. * Paid payroll for the month, Tk.110,000. * The owner withdrew Tk.12,000 cash.
Instructions: (a) Prepare a summary of the above transactions using column headings for items given in the above balance sheet. Enter the balances shown in the April 30, 1994, balance sheet as beginning balances in the summary of transactions. Determine balances after each transaction. (b) Prepare an income statement for May 1994. (c) Prepare a statement of owner’s equity for May 1994. (d) Prepare a balance sheet as of May 31, 1994.

Problem # 19
Sanchez Company engaged in the following transactions in January 1994, its first month of operations: * The owner, Jose Sanchez, invested $100,000 cash in the business. * The company borrowed $40,000 from Jose’s brother-in-law; a note was signed bearing no interest. * The following assets were purchased for cash: truck, $16,000; equipment, $8,000; and office furniture, $10,000. * Office equipment was purchased on account, $12,000. * The account payable in (4) was paid, $12,000.

Instructions: (a) Prepare a summary of the above transactions. Include money columns for Cash, Trucks, Equipment, Office Furniture, Accounts Payable, Notes Payable, and Jose Sanchez, Capital. Determine new balances after each transaction. (b) Prepare a balance sheet as of January 31, 1994.

Problem # 20
Drew Carlson Company completed the following transactions in July 1994: * The company was organized and received $80,000 cash investment from the owner. * The company bought equipment for cash at a cost of $50,000. * The company performed services for a customer who agreed to pay $8,000 in one week. * The company received $8,000 from transaction (3). * Equipment that cost $4,000 was acquired on account. * A partial payment of $2,500 was made on the liability incurred in transaction (5). * Employee salaries for the month were paid, $4,500.
Instructions:
* Prepare a summary of the above transactions. Include money columns for Cash, Accounts Receivable, Equipment, Accounts Payable, and Drew Carlson, Capital. Determine balances after each transaction. * Prepare an income statement for July 1994. * Prepare a balance sheet as of July 31, 1994.

Problem # 21
The transactions shown below are for Ann Hobbs Company for June 1994. This was the first month of operation of the business. * Owner invested cash, $168,000. * Company borrowed $28,000 from a relative of the owner; a note was signed bearing no interest. * Purchased equipment for cash, $33,600. * Performed services for a customer and received cash, $22,400. * Paid salaries, $11,200. * Paid rent, $2,800. * Received bill for gas and oil used, $1,960. * Made a $14,000 payment on notes payable.
Instructions: (a) Prepare a summary of the above transactions. Include money columns for Cash, Equipment, Accounts Payable, Notes Payable, and Ann Hobbs, Capital. Determine new balances after each transaction. (b) Prepare an income statement for June 1994. (c) Prepare a statement of owner’s equity for June 1994. (d) Prepare a balance sheet as of June 30, 1994.

Problem # 22
The following selected transactions are data for the Sara Wilkins Company, a parking ramp business, for May 1994. The business was formed in April 1994.
May 1 Paid May rent on the parking structure, $21,000. 8 Cash was received for parking services, $51,450. (Actually, cash would be received daily throughout the month, but we assume it was all received on May 8 to simplify the problem.) 17 Received cash from additional investment by owner, $10,500. 19 Paid advertising expenses for May, $1,680. 30 Purchased motorized sweeper to clean parking structure, $12,600. Payment will be made next month. 31 Paid salaries for May, $11,340.
Instructions: (a) Prepare a summary of the above transactions. Include money columns for Cash, Equipment, Accounts Payable, and Sara Wilkins, Capital, $42,000. (b) Prepare an income statement for May 1994. (c) Prepare a statement of owner’s equity for May 1994. (d) Prepare a balance sheet as of May 31, 1994.

Problem # 23
The balance sheet of Andy Goodhew Company as of September 30, 1994, was as follows:
ANDY GOODHEW COMPANY
Balance Sheet
September 30, 1994
Assets
Cash ……………………………………… $136,000
Accounts receivable…………………….... 12,000
Total assets……………………………….. $148,000
Liabilities and Owner’s Equity Liabilities:
Accounts payable………………………… $ 36,000 Owner’s equity:
Andy Goodhew, capital…………………… 112,000
Total liabilities and owner’s equity……… $148,000
The company engaged in the following transactions in October 1994:
Oct. 1 The account payable owed as of September 30 ($36,000) was paid. 2 The company paid rent for October, $12,800. 7 The company received cash from a customer for services performed, $2,800. 10 The company collected $10,000 on accounts receivable. 14 Cash received from a customer for services, $4,400. 15 Revenue earned but not yet collected from a customer was $2,000. 16 The company paid salaries of $2,000 for October 1-15. 19 The company paid advertising expenses of $800 for October. 21 Cash received from a customer for services performed, $6,000. 24 The company incurred miscellaneous expenses for $560 for various items and services provided by a supplier. The bill will be paid November 10. 31 Cash received from a customer for services performed, $5,600. 31 The company paid salaries of $2,000 for October 16-31. 31 A customer was sent a bill for $14,400 for services provided in October. Instructions: (a) Prepare a summary of the above transactions using column headings for items given in the above balance sheet. Enter the balances shown in the September 30, 1994, balance sheet as beginning balances in the summary of transactions. Determine balances after each transaction. (b) Prepare an income statement for October 1994. (c) Prepare a statement of owner’s equity for October 1994. (d) Prepare a balance sheet as of October 31, 1994.…...

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Re Transaction

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