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ACT 501 Assignment

Q.1 HBL organized ASUS Graphics Company on January 1, 2018. At the end of the first 6 months of operations, the trial balance contained the accounts shown below: Analysis reveals the following additional data: 1. The $3,700 balance in Supplies Expense represents supplies purchased in January. At June 30, $1,500 of supplies are on hand. 2. The note payable was issued on February 1. It is a 9%, 6-month note. 3. The balance in Insurance Expense is the premium on a one-year policy, dated March 1, 20

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135 views6 pages

ACT 501 Assignment

Q.1 HBL organized ASUS Graphics Company on January 1, 2018. At the end of the first 6 months of operations, the trial balance contained the accounts shown below: Analysis reveals the following additional data: 1. The $3,700 balance in Supplies Expense represents supplies purchased in January. At June 30, $1,500 of supplies are on hand. 2. The note payable was issued on February 1. It is a 9%, 6-month note. 3. The balance in Insurance Expense is the premium on a one-year policy, dated March 1, 20

Uploaded by

Easin Mohammad Roman
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Assignment

On

Adjustment and Transactions


Submitted to

Mr. Mohammad Ahsan Chowdhury


Lecturer, School of Business
Course Title-Principles of Accounting
Course code-ACT- 501
Submitted by

Name ID Signature
Easin Mohammad Roman 193-004-067

Nadim Hasan 193-005-067

Umme Salma 193-003-067

Department: MBA
Summer – 2020
(a) Journalize the adjusting entries at June 30. (Assume adjustments are recorded every 6
months.)

Answer:

HBL organized ASUS Graphics Company

Adjusting Journal

Date Explanation Ref Debit Credit


June-30 Supplies expense Dr 2200
Supplies Cr 2200
To record supplies used (3700-1500=2200)
June-30 Interest expense Dr 750
Interest payable Cr 750
To record Interest expense
{20000*9%*(5/12)=750}
June-30 Insurance expense Dr 900
Prepaid Insurance Cr 900
To record Insurance expense
{2700*(4/12)=900}
June-30 Service revenue Dr 1300
Unearned service revenue Cr 1300
To record Unearned service revenue
June-30 Account receivable Dr 2000
Service Revenue Cr 2000
To record service perform but unrecorded
June-30 Depreciation Expense Dr 1125
Accumulated depreciation Cr 1125
To record Depreciation Expense (2250/2=1125)
(b) Prepare an adjusted trial balance.

Answer:

HBL organized ASUS Graphics Company

Adjusting trial balance

Explanation Debit Credit


Cash 8600
Account receivable (14000+2000=16000) 16000
Supplies 1500
Prepaid Insurance (2700-900=1800) 1800
Equipment 45000
Accumulated depreciation equipment 1125
Notes payable 20000
Interest payable 750
Accounts payable 9000
Unearned service revenue 1300
Owner’s capital 22000
Sales revenue 52100
Service revenue (6000-1300+2000=6700) 6700
Insurance Expense 900
Interest Expense 750
Depreciation Expense 1125
Salaries & wages Expense 30000
Supplies expense 2200
Advertising expense 1900
Rent expense 1500
Utility expense 1700
Total $112975 $112975
(c) Prepare an income statement

HBL organized ASUS Graphics Company

Income Statement
for the 6-Months Ended June 30, 2018

Explanation Amount Amount


Revenues:
Sales Revenue $52,100
Service Revenue 6700
Total Revenue $58,800

Expenses:

Insurance Expense 900


Interest Expense 750
Depreciation Expense 1125
Salaries & wages Expense 30000
Supplies expense 2200
Advertising expense 1900
Rent expense 1500
Utility expense 1700
Total Expenses ($40,075)
Net Income $18,725
Prepare an owner’s equity statement for the 6 months ended June 30

HBL organized ASUS Graphics Company

Owner's Equity Statement


for the 6-Months Ended June 30, 2018

Explanation Amount
Owner's Capital $22000
Add: Net Income $18725
Owner's Capital ,June 30 $40,725

Prepare a balance sheet at June 30.

HBL organized ASUS Graphics Company

Balance Sheet
June 30, 2018

Explanation Amount Amount


Assets :
Cash $8,600
Account Receivable $16,000
Supplies $1,500
Prepaid Insurance $1,800
Equipment:
Accumulated Depreciation-Equipment $45,000
Less: Accumulated depreciation equipment ($1,125) $43,875
Total Assets $71,775
Liabilities and Owner's Equity:
Liabilities:
Note payable $20,000
Interest payable $750
Accounts payable $9000
Unearned Service Revenue $1300
Total Liabilities $31,050
Owner's Equity:
Owner's Capital (June 30) $40,725
Total Liabilities & Owner's Equity $71,775

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