Tuesday, May 5, 2020

Journal Accounting

Question: 1. Provide all Journal Entries including the Adjusting Entries and the Closing Entries in format: Example: Date Account Name Debit Credit 1. May XX, 2011 Cash (A) $X,XXX Share Capital (SE) $ X,XXX 2. Provide the Adjusted Trial Balance 3. Provide the Statement of Earnings for the 8 months period ending Dec 31, 2011 4. Provide the Statement of Financial Position as Dec 31, 2011 Answer: The following are the journal entries that would be passed: Date Account and Description Ref. Debit Credit Amounts in $ 2011 April 30 Cash 5,000 Capital 5,000 May 1 Prepaid license 150 Cash 150 May 2 Cash 10,000 Bank loan 10,000 May 2 Equipment 9,600 Cash 9,600 September 1 Prepaid liability insurance 750 Cash 750 December 31 Rent expense 8,100 Cash 8,100 December 31 Wages expense 2,800 Cash 2,450 Outstanding wages 350 December 31 Food supplies 22,500 Accounts payable 22,500 December 31 Accounts payable 18,500 Cash 18,500 December 31 Accounts receivables 500 Cash 42,300 Sales revenue 42,800 The following is the income statement: (Amounts in $) Income statement Particulars Amounts in $ Sales revenue 42,800.00 Less: expenses: Food supplies expense 18,000.00 License expense 100.00 Interest on loan expense 666.67 Depreciation expense 400.00 Wages expense 2,800.00 Liability insurance expense 250.00 Rent expense 8,100.00 30,316.67 Net profit 12,483.33 3. The following is the statement of earnings: (Amounts in $) Income statement Particulars Amounts in $ Capital as on May, 2011 5,000.00 Less: drawings -8,000.00 Add: net profit 12,483.33 Capital as on Dec, 2011 9,483.33 4. The following is the Balance Sheet: (Amounts in $) Balance Sheet Liabilities Amounts in $ Assets Amounts in $ Capital 9,483.33 Prepaid license 50.00 Bank loan 10,000.00 Accounts receivables 500.00 Interest on loan payable 666.67 Cash 9,750.00 Accounts payable 4,000.00 Equipment 9,600.00 9,200.00 Outstanding wages 350.00 Accumulated depreciation 400.00 Prepaid insurance 500.00 Food supplies 4,500.00 Total liabilities 24,500.00 Total Assets 24,500.00 5. The following are the adjustment entries that would be passed: Date Account and Description Ref. Debit Credit Amounts in $ 2011 License expense 100 Prepaid license 100 Depreciation expense 400 Accumulated depreciation 400 Interest expense 667 Interest on loan 667 Liability insurance expense 250 Liability insurance 250 Food supplies expense 18,000 Food supplies 18,000 6. The following are the adjustment entries that would be passed: Date Account and Description Ref. Debit Credit Amounts in $ 2011 Sales revenue 42,800 Income summary 42,800 Income summary 30,316 Food supplies expense 18,000 License expense 100 Interest on loan expense 667 Depreciation expense 400 Wages expense 2,800 Liability insurance expense 250 Rent expense 8,100 Drawings 8,200 Capital 8,200 Net profit 12,483 Capital 12,483 7. The profit has been earned as it is evident from the amount of the net profit that has been earned.

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