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Alem Photographic Studio recorded business transactions during March 2012, including investing cash and equipment into the business, paying rent and suppliers, receiving payments from customers, and paying expenses. At the end of the month, adjustments were made for inventory counts, prepaid rent, depreciation, and accrued salaries. Students are asked to: (1) record the transaction details in an accounting equation and table, (2) prepare an income statement and balance sheet, and (3) calculate financial ratios from the statements.

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234 views

Assignment

Alem Photographic Studio recorded business transactions during March 2012, including investing cash and equipment into the business, paying rent and suppliers, receiving payments from customers, and paying expenses. At the end of the month, adjustments were made for inventory counts, prepaid rent, depreciation, and accrued salaries. Students are asked to: (1) record the transaction details in an accounting equation and table, (2) prepare an income statement and balance sheet, and (3) calculate financial ratios from the statements.

Uploaded by

Tesema bizuneh
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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DEBRE MARKOS UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS


MASTERS OD BUSINESS ADMINISTRATION
Individual Assignment
a month’s transaction for Alem Photographic Studio are use based on their occurrence during
March, 2012.
March, 1. Alem invested the following from her par-time business to transfer a full-time
business; cash Br 5,500, account receivable Br 950, supplies Br 1,200 and
photographic equipment Br 15,000.
March, 1. Hill paid Br 3,400 on a lease rental contracts the payment representing three
months rent of quarters for the studio.
March, 4. Purchased additional photographic equipment on account from Kelem
photographic equipment Inc. for Br 2,500.
March, 5. Received Br 850 from customers in payment of their accounts.
March, 6. Paid Br 250 for a news paper advertisement.
March, 10. Paid Br 600 to Kelem photographic equipment Inc. as a payment of her debt.
March, 13. Paid receptionists Br 575 for two weeks salary.
March, 16. Received Br 2,500 from sales for the first half of march.
March, 20. Paid Br 650 for supplies.
March, 27. Paid receptionist Br 575 for two weeks salary.
March, 31. Paid Br 150 for telephone bill for the month.
March, 31. Paid Br 175 for electric bill for the month.
March, 31. Received Br 1,870 from sales for the second half of march.
March, 31 Sales on account totaled shows balance of Br 1,675 for the month.
March, 31 Alem withdrew Br 2,500 for her personal use.
Adjusting entries occurred at the end of March
a. The inventory of supplies on March 31 is determined that $890 is on hand.
b. The debit balance of Br 2,400 in the prepaid rent represents the prepayment for three
months.
c. The estimated amount of depreciation of the photographic equipment for the month is
assumed to be $175.
d. The salaries expense on Monday and Tuesday, March 30 and 31 total $ 115 were not
paid (accrued expense/salary payable).
Instructions
1. State the assets, liabilities, and owner’s equity in equation form and in tabular form
indicate the increases and decreases resulting from each transaction and the new
balances after each transaction. (10 marks)
2. Prepare an income statement and a balance sheet as of march 31, 2012. (10 marks)
3. Compute all possible financial ratios based on your data on the financial statements
you prepared. (5 marks)

Submission Date will be at the end of class room discussion.

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