Group 2
Group 2
Group 2
Lahore
Group 2nd
Presentation,IBF& BBA, Semester 2nd
Instructor:
Prof. Rana Tanveer Hussain
Members:
•Bilal Sabir Roll # : 010
•Talha Yasin Roll # : 011
•Izhar Warsi Roll # : 011
•Muhammad Anees Roll # : 012
ACCOUNTING CYCLE
Topic
Jan20 Michel McBrayn and family invested $80000 in exchange for capital
stock
Jan21 Overnight auto service purchased the land from the city of 52000 cash.
Jan 22 The purchase price was 36000 overnight made a 6000 cash down
payment and issued a 90 days interest bearing note payable for the remaining
30000.
Jan 24 Overnight auto service sold the access tools for 1800 to Ace towing.
2015 2015
$ $ $ $
21-Jan 52,000.00 52,000.00 22-Jan 30,000.00 30,000.00
Account Payable
Capital stock
Date Debit Credit Balance
2015 Date Debit Credit Balance
23- $ $
Jan 13,800.00 13,800.00 2015
$ $
27 6,800.00 7,000.00 $ $
20-Jan 80,000.00 80,000.00
Exercise: Posting in Ledgers
Jan,31 Recorded revenue of $2200 all of which was received in cash.
Feb,1 Paid daily tribune $360 cash for newspaper advertising to be run during
February.
Feb,2 Purchased radio advertising from KRAM to be aired in February. The cost
was $470 payable within 30 days.
Feb,4 Purchased various shop supplies from CAPA auto parts the cost was $1400
due in 30 days.
Feb,15 Collected $49810 cash for repairs made to vehicles of airport shuttle
Service.
Feb,28 Billed Harbor Cab co $5400 for maintenance and repair service overnight
provided in February. The agreement with Harbor Cab calls for payment to be
received by March 10.
OVERNIGHT AUTO SEVICE
GENERAL JOURNAL JAN&Feb 2015
Date Account Title Debit Credit
2015
jan,31 Cash $2,200
Repair Service Revenue $2,200
31 Wages Expense $1,200
Cash $1,200
31 Utilities Expense $200
Cash $200
Feb,1 Advertising Expense $360
Cash $360
2 Advertising Expense $470
Accounts Payable $470
4 Shop Supplies $1,400
Accounts payable $1,400
15 Cash $4,980
Repair Service Revenue $4,980
28 Accounts Receivable $5,400
Repair Service Revenue $5,400
28 Wages Expense $4,900
Cash $4,900
28 Utilities Expense $1,600
Accounts Payable $1,600
28 Dividends $3,200
Cash $3,200
OVERNIGHT
AUTO SERVICE
THE LEDGER
Assets Accounts:
Building Land
Tools and Equipment
31-Jan 52000
31-Jan 12000 31-Jan 36000
Balance $52000
Balance $12000
Balance $36,000
Liabilities and owner’s Equity accounts:
Repair Service
Dividends Revenue Advertising Expense
31-Jan 0 31-Jan 2200 1-Feb 360
28-Feb 3200 15-Feb 4980
28-Feb 5400 2-Feb 470
Balance $3200 Balance $12580 Balance $830
Wages Expense Utilities Expense
$ $
Cash $ 13,120.00
Accounts receivable 6,600
Shop supplies 1,400
Tools and equipment 12,000
Building 36,000
Land 52,000
Notes payable 30,000
Accounts payable 10,470
Capital stock 80,000
Retained earnings 0
Dividends 3,200
Repair service revenue 12,580
Advertising expense 830
Wages expense 6100
Utilities expense 1800
133,050 133,050
Demonstration Problem
Epler Consulting Services, Inc., opened for business on January 25, 2018. The
company maintains the following ledger accounts:
CASH
Office Supplies
20-Jan 50000 20-Jan 400
21-Jan 200
22-Jan 15000
Balance 34600
Balance 200
26-Jan 2000
22-Jan 15000
Balance 2000
Balance 15000
Liability and Owners’ Equity Accounts
Accounts Payable Capital Stock
21-Jan 200
20-Jan 5000
31-Jan 100
31-Jan 100
20-Jan 400
Balance 100
Balance 400
EPLER CONSULTING SERVICES, INC.
TRIAL BALANCE JANUARY 31,2018
$ $
Cash 34,600
Accounts receivable
2,000
Office supplies
200
Office equipment
15,000
Accounts payable
300
Capital stock
50000
Retained earnings
0
Consulting revenue
2,000
Rent expense
400
Utilities expense
100
52,300 52,300
Epler’s Retained Earnings account balance is zero because the company has
been in business for only one week and has not yet updated the Retained Earnings
account for any revenue or expense activities.
Problems
Problem 3.12
Journalizing, Posting, and Preparing a Trial Balance
Elaine Consulting incorporated on February 1, current year. The company engaged in the
following transactions during its first month of operations:
Required:
1. Prepare journal entries, including explanations, for these transactions.
2. Post each entry to the appropriate ledger accounts
3. Prepare a trial balance dated February 28, current year. Assume accounts with zero
balances are not included in the trial balance.
Problem 3.1A
Glenn Grimes is the founder and president of Heartland Construction, a real estate
development venture. The business transactions during February while the company was being
organized are listed as follows:
Feb. 1 Grimes and several others invested $600,000 cash in the business in exchange for
30,000 shares of capital stock.
Feb. 10 The company purchased office facilities for $360,000, of which $120,000 was
applicable to the land and $240,000 to the building. A cash payment of $72,000 was made and
a note payable was issued for the balance of the purchase price.
Feb. 16 Computer equipment was purchased from PCWorld for $14,400 cash.
Feb. 18 Office furnishings were purchased from Hi-Way Furnishings at a cost of $10,800. A
$1,200 cash payment was made at the time of purchase, and an agreement was made to
pay the remaining balance in two equal installments due March 1 and April 1. HiWay
Furnishings did not require that Heartland sign a promissory note.
Feb. 22 Office supplies were purchased from Office World for $360 cash.
Feb. 23 Heartland discovered that it paid too much for a computer printer purchased on
February 16. The unit should have cost only $359, but Heartland was charged $395. PCWorld
promised to refund the difference within seven days.
Feb. 27Mailed Hi-Way Furnishings the first installment due on the account payable for office
furnishings purchased on February 18.
Feb. 28Received $36 from PCWorld in full settlement of the account receivable created on
February 23.
Instructions:
Prepare journal entries to record these transactions. Select the appropriate account titles
from the following chart of accounts:
Cash Land
Accounts Receivable Office Building
Office Supplies Notes Payable
Office Furnishings Accounts Payable
Computer Systems Capital Stock