Rift Valley University, Burayu Campus

Department of Business Management

Fundamental of accounting -I Group assignment (20%)
General Instruction
 Make a Group of 5 members
 Submitting Date: January16, 2024
Problem 1 On July 1, 2008, ASAN established an interior decorating business, Photogenic
Designs. During the month, ASAN completed the following transactions related to the business:
July 1. ASAN transferred cash from a personal bank account to an account to be used for the
business, Br 18,000.
2. Paid rent for period of July 4 to end of month, Br 1,750.
5. Purchased a truck for Br 15,000, paying Br 1,000 cash and giving a note payable for the
remainder
6. Purchased equipment on account, Br 7,000
8. Purchased supplies for cash, Br 1,200
12. Paid annual insurance, Br 2,700
16. Received cash for job completed, Br 7,500.
19. Paid creditor a portion of the amount owed for equipment purchased on July 6, Br 2,500.
19. Recorded jobs completed on account and sent invoices to customers, Br 8,600.
23. Received an invoice for truck expenses, to be paid in August, Br 800.
24. Paid utilities expense, Br 900.
25. Paid miscellaneous expenses, Br 315
26. Received cash from customers on account, Br 3,600
27. Paid wages of employees, Br 2,400
28. Withdrew cash for personal use, Br 2,000
Instructions
1) Journalize each transaction in a two-column journal.
2) Post the journal to a ledger of four-column accounts
3) Prepare an unadjusted trial balance for Photogenic Designs as of July 31, 2008.
Problem 2.2. Chilalo electronics repair business owned by Tigist prepared the unadjusted trial
balance shown below at the end of its first year of operations.
Chilalo Electronics Repair Business
Unadjusted Trial Balance
December 30, 2008
Debit Credit

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Br 6,900

Accounts Receivable . . . . . . . . . . . . . . . . . 45,000
Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,800
Equipment . . . . . . . . . . . . . . . . . . . . . . . . 227,400
Accounts Payable . . . . . . . . . . . . . . . . . . . ……………………….....10,500
Unearned Fees . . . . . . . . . . . . . . . . . . . . . . . ………………………..12,000
Tigist, Capital . . . . . . . . . . . . . . . . . . . . . . . . . . …………………...156,000
Tigist, Drawing . . . . . . . . . . . . . . . . . . . . …9,000
Fees Earned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ……………..271,500
Wages Expense . . . . . . . . . . . . . . . . . . . . . 63,000
Rent Expense . . . . . . . . . . . . . . . . . . . . . . 48,000
Utilities Expense . . . . . . . . . . . . . . . . . . . .34,500
Miscellaneous Expense . . . . . . . . . . . . . . .5,400 .5,400
Total Br 450,000 Br 450,000
Additional information
a) Fees earned but unbilled on December 30 were Br 1,300.
b) Supplies on hand on December 30 were Br 3,100.
c) The balance in unearned fees represented the December 1 receipt in advance for services
to be provided. Only Br 4,000 of the services was provided between December1 and
December 31.
d) Unpaid wages accrued on December30 were Br 900.
Instructions
1. Journalize and post to ledger the adjusting entries necessary on December 30, 2008.
2. Prepare adjusted trial balance
3. Prepare worksheet
4. Prepare Income statement, Statements of owner’s equity, and Balance sheet.
5. Close temporary accounts
6. Prepare post closing trial balance
Problem 3 The trial balance of Scarlatti Corporation does not balance.
SCARLATTI CORPORATION
TRIAL BALANCE
APRIL 30, 2010

Debit Credit
Cash Br 5,912
Accounts Receivable 5,240
Supplies on Hand 2,967
Furniture and Equipment 6,100
Accounts Payable Br 7,044
Common Stock 8,000
Retained Earnings 2,000
Service Revenue 5,200
Office Expense 4,320
Total Br 24,539 Br 22,244

An examination of the ledger shows these errors.

a) Cash received from a customer on account was recorded (both debit and credit) as Br
1,580 instead of Br 1,850.
b) The purchase on account of a computer costing Br 1,900 was recorded as a debit to
Office Expense and a credit to Accounts Payable.
c) Services were performed on account for a client, Br 2,250, for which Accounts
Receivable was debited Br 2,250 and Service Revenue was credited Br 225.
d) A payment of Br 95 for telephone charges was entered as a debit to Office Expenses and
a debit to Cash.
e) The Service Revenue account was totaled at Br 5,200 instead of Br 5,280.
Instructions:
1. From this information prepare a corrected trial balance.
2. Prepare the adjusting entries
Prepare financial statements
a) Income statement
b) Statements of retain earning
c) Statements of stock holders equity
d) Balance sheet
e) Prepare closing entries
f) Prepare post closing trail balance
Prepare post-closing trial balance
Problem 4. YAAYAA, an architect, opened an office on January, 2009. During the month, he
completed the following transactions connected with his professional practice:
January: 1. Transferred cash from a personal bank account to an account to be used for the
business, Br 30,000.
2. Purchased used automobile for Br 19,500, paying Br 4,500 cash and giving a note
payable for the remainder.
7. Paid rent for office and workroom, Br 3,000.
8. Paid cash for supplies, Br1,450
9. Purchased office and computer equipment on account, Br 6,000.
10. Paid cash for annual insurance policies on automobile and equipment, Br 2,400
15. Received cash from a client for plans delivered, Br 7,500.
16. Paid cash to creditors on account, Br 1,750
19. Paid cash for miscellaneous expenses, Br 500
20. Received invoice for blueprint service, due in February, Br 1,000.
23. Recorded fee earned on plans delivered, payment to be received in February, Br 5,200.
24. Paid salary of assistant, Br 1,600
27. Paid cash for miscellaneous expenses, Br 325
28. Paid installment due on note payable, Br 250
31. Paid gas, oil, and repairs on automobile for January, Br 400
Required:
a) Record journal entities
b) Post the journal in to four-column ledger
c) Prepare trial balance
d) Prepare adjustment based the following information
 Supplies on hand at January 31 Br 450
 Expired insurance policy for the month of January Br 200
 Unpaid rent of design equipment on January 30 was Br 1000.
e) Prepare financial statement from adjusted trial balance.
f) Close temporary accounts
9. Prepare post closing trial balance
PROBLEM 5. you are provided with the following data from the records of three merchandising
companies:(a),
companies:(a), (b)
(b) and (c). Determine each of the missing numbers for each company.

a b c
Invoice cost of merchandise purchase Br.90, 000 Br.40, 000 Br.30, 500
Purchase discounts 4000 ____? 650
Purchase returns and allowances 3,000 1,500 1,100
Transportation -In _____? 3,500 4,000
Merchandise inventory (beginning of period) 7,000 _____? 9,000
Total cost of merchandise purchases 89,400 39,500 ___ ?
Merchandise inventory (end of period) 4,400 7,500 ____?
Cost of goods sold ___? 41,600 34,130
PROBLEM 6. Prepare journal entries to record the following merchandising transactions of
Shiach Company. The company uses the periodic inventory system.
1. July 1 Purchased merchandise form Gizhy Company for $6,000 under credit
terms of 1/15, n/30, FOB shipping point.
2. Sold merchandise to Terra Co. for $800 under credit terms of 2/10, n/60, FOB
shipping point.
3. Paid $100 for freight (transportation) charges on the purchase of July 1.
4. Sold merchandise for $1,600 cash.
5. Purchased merchandise from Chilalo Co. for $2,300 under credit terms of 2/15,
n/60, FOB destination.
6. Received a $200 credit memorandum acknowledging the return of merchandise
purchased on July 9.
7. Received the balance due from Terra Co. for the credit sale dated July 2, net of
the discount.
8. Paid the balance due to Gizhy Company within the discount period.
9. Sold merchandise to Urban Co. for $1,250 under credit terms of 2/15, n/60, FOB
shipping point.
10. Issued a $150 credit memorandum to Urban Co. for an allowance on goods sold
on July 19.
11. Received a debit memorandum from Urban Co. for an error that overstated the
total sales invoice by $50.
12. Paid Chilalo Co. the balance due after deducting the discount.
13. Received the balance due from Urban Co. for the credit sale dated July 19, net of
the discount.
14. Sold merchandise to Terra Co. for $5,000 under credit terms of 2/10, n/60, FOB
shipping point.
 Problem 7 Guji company had the following amounts of assets and liabilities at the
beginning and end of last year:
Assets Liabilities
Beginning of the year………………Br.75,000 Br. 30,000
End of the year….……………………120,000 46,000
Determine the net income or net loss of Guji for the year under each of the following unrelated
assumptions:
a) Owner made no additional investment and withdrew no amount during the year
b) Owner made no additional investment but withdrew Br.17,500 to pay for her personal
expenses
c) Owner withdrew no amount during the year but made additional investment of Br.
32,500 cash.
d) Owner withdrew Br.17,500 and invested Br.25,000 cash during the year.
PROBLEM 7. For each of the following give an example of a transaction that creates the
described effects:
1. Decreases a liability and decreases an asset
2. Increases an asset and decreases another asset
3. Decreases an asset and decreases owners equity
4. Increases a liability and decreases owners equity
5. Increases an asset and increases a liability
6. Decreases an asset and decreases a liability
PROBLEM 8 On November 30, 1991, the Cash T-account (after all postings have been made)
for Company AA shows a balance of $4,200. The bank statement, however, shows a balance of
$5,000 After an examination of the bank statement, the books, and the returned checks, the
accountant noted the following:
1. Check no. 482 for $1,200 and check no. 491 for $800 are still outstanding.
2. A check for $200 that was received from Mr. Poor has "bounced." It has been returned with
the bank statement and marked "NSF," for "not sufficient funds." This check was in payment for
services performed by us on account for Mr. Poor.
3. A deposit we made on November 29 for $3,000 does not appear on the bank statement.
4. The bank charged us a $10 service fee to handle the NSF check.
5. The bank also charged us a $15 monthly checking account fee.
6. Check no. 474 for $85 was mistakenly charged by the bank for only $58.
7. The bank collected a $2,000 note for us and deposited the proceeds into our account.
8. The checking account earned $30 interest during the month.
9. The bank mistakenly charged us for a check of $32 as 62 by Company AB.
a) prepare bank reconciliation
b) prepare necessary journal entry