Accounting Assignment (100)
Question 1: Question: Abdur Rahman Company’s bank statement for the month of September showed
the balance per bank of $9,000. The company’s Cash account in the general ledger had a balance of $5,459
at September 30. Other information is as follows:
(1) Cash receipts for September 30 recorded on the company’s books were $5,700 but this amount does
not appear on the bank statement.
(2) The bank statement shows a debit memorandum for $40 check printing charges.
(3) Check No.119 payable to Doom Company was recorded in the cash payments journal and cleared by
the bank for $248. A review of the accounts payable subsidiary ledger shows a $36 credit balance in
the Doom Company and that the payment to them should have been for $284.
(4) Depreciation $1,000 for the month of September was not recorded.
(5) The total amount of checks still outstanding at September 30 amounted $5,000.
(6) Check No. 138 was correctly written and paid by the bank for $409. The cash payments journal
reflects an entry for check No.138 as a debit to Accounts payable and a Credit to Cash at bank for
$490.
(7) The company sold two old furniture for $2,000, the customer made payment online and this
transaction appears in the bank statement but was not recorded by the company accountant.
(8) The company made a gain on sale for the furniture $300 and loss on sale $200 for another furniture
but both of them remained unrecorded by the company accountant.
(9) The bank returned an NSF check from a customer for $360.
(10 )The bank included a credit memorandum for $2,560 which represents collection from a customer’s
note by the bank for the company; principle amount of the note was $2,500 and interest was $60.
Interest has not been accrued.
(11 ) Salaries and wages expense $5,000 remained due and unrecorded by the book for the month of
September
Required:
a. Prepare a bank reconciliation as of September 30, 2050 for Abdur Rahman’s company.
b. Prepare journal entries in the book of Abdur Rahman’s Company.
c.
Question 2:Huzaifa Noor’s Company furnishes the following data regarding Machine -777. The financial year of the
company ends on December 31 each year.
Machine - 777
Cost $76,000
Purchase date 1/7/2010
Useful life 8 years
Salvage value $4,000
Depreciation method Straight – line
Date sold 1/7/2014
Sales Price $35,000
Instructions:
a. Journalize the entry to record the purchase of the machine on 1 July, 2010.
b. Calculate depreciation expense using appropriate method on December 31 for the year 2010, 2011, 2012 and
2013.
c. Determine the Loss on sale or Gain on sale of the machine on 1 July 2014 at the date of disposal and record
the journal entry.
Question 3: Mohammad’s Company purchased an equipment on January 1, 2013 for $90,000. It is estimated that the
equipment will have a $5,000 salvage value at the end of its 5 – year useful life. It is also estimated that the equipment will
produce total 100,000 units over its 5 – year life.
Required: Answer the following independent scenario:
I. Compute the amount of accumulated depreciation for the year ended December 31, 2013, using the straight-line
method.
II. If 16,000 units of product are produced in 2013 and 24,000 units are produced in the year of 2014, calculate the
depreciation expense for the year of 2013 and 2014, use units-of-activity method.
III. If the company uses the double – declining method of depreciation, what is the balance of accumulated
depreciation on December 31, 2015?
Question 4: Baker Corporation provided the following Statements for 2014-15 –
Balance Sheet 2015 2014
Assets $ $
Cash 40,000 70,000
Accounts Receivable 320,000 350,000
Inventory 460,000 320,000
Total Current Asset 820,000 740,000
Gross Fixed Assets 560,000 520,000
Accumulated Depreciation 180,000 150,000
Net Fixed Asset 380,000 370,000
Total Asset 1,200,000 1,110,000
Liabilities & Stockholders’ Equity
Current Liabilities
Accounts Payable 390,000 320,000
Notes Payable 110,000 90,000
Accrued Expense 20,000 20,000
Total Current Liabilities 520,000 430,000
Long Term Debt 320,000 350,000
Total Liabilities 840,000 780,000
Stockholders’ Equity
Common Stock at par 100,000 100,000
Share Premium Reserve 150,000 150,000
Retained Earnings 110,000 80,000
Total Liabilities & Stockholders’ Equity 1,200,000 1,110,000
Income Statement 2015
$
Sales 2,200,000
Cogs 1,420,000
Gross Profit 780,000
Operating Expenses 600,000
Operating Income (EBIT) 180,000
Interest 29,000
Earnings before Tax (EBT) 151,000
Tax (30%) 45,000
Earnings after Tax (Net Income) 106,000
Additional Information:
1. Purchased equipments paying $40,000 cash.
2. Annual depreciation expense was $30,000.
3. Paid cash dividend of $76,000.
4. No sale of fixed asset.
Required: Prepare a Cash Flow Statement for the year 2015.
