I.

Com(2) Accounting PPT Slides by Sir Irfan

Cell# 0347-3643211

I.COM(1) ACCOUNTING
ONLINE/PHYSICAL CLASSES WORKSHEET
(With solution or Answer key)

Topic: FINANCIAL STATEMENT

1- The main feature of these slides is the ANSWER KEY to every question given.
2- Solutions to some questions are also given.
3- Booklet questions are also given in the last slides.
4- Complete slides of all other topics are also available.
5- Other subjects NOTES, TARGET PAPERS (with answers) available.
6- ONLINE AND PHYSICAL classes are also available. 1
 HOME AND ONLINE TUITION
REGISTRATION ADMISSION FORM
ONLINE ADMISSION FORM: CONTACT SIR IRFAN VIA WHATSAPP: Economics and POC 2024 Target paper 2

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 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211

FINANCIAL STATEMENT
This chapter includes the following topics:
• Adjusting entries
• Closing entries
• Reversing entries
• Income Statement
• Balance Sheet
3
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211

ADJUSTING ENTRIES
(FORMAT)

4
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
RULES FOR MAKING ADJUSTING ENTRIES

TYPES OF ADJUSTING ENTRIES:

1- Fixed entries 2- Non- Fixed entries 3- Fixed entries related to Accrued

FIXED ENTRIES:
1- Entry for depreciation expense

Date Particulars P/R Dr Cr

Dec-31 Depreciation expense XXXX
Allowances for depreciation XXXX
[ To record adjusted depreciation expense]

2- Entry for bad debts expense

Date Particulars P/R Dr Cr

Dec-31 Bad debts expense XXXX
Allowances for bad debts XXXX
[ To record adjusted bad debts expense]
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
RULES FOR MAKING ADJUSTING ENTRIES

FIXED ENTRIES:

3- Entry for merchandise inventory ending

Date Particulars P/R Dr Cr

Dec-31 Merchandise inventory XXXX
Expense & revenue summary XXXX
[ To record adjusted closing inventory]

4- Entry for cost of goods sold

Date Particulars P/R Dr Cr

Dec-31 Cost of goods sold XXXX
Merchandise account XXXX
[ To record adjusted cost of goods sold]

6
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
RULES FOR MAKING ADJUSTING ENTRIES
NON-FIXED ENTRIES:
FOR NON-FIXED ENTRIES

We need to remember these words

1- ASSETS (–)
Unused – Unexpired – On hand – Prepaid

2- LIABILITIES (+)
Accrued – Outstanding – Unpaid – payable

3- EXPENSE (=)
Used – Expired – Consumed – Expense

For making adjusting entries we need to remember these rules

1- If the Trail balance account is in debit we will credit this account in adjusting the entry
2- If the Trail balance account is in credit we will debit this account in adjusting entry
3- If both accounts are the same so we will take the difference of amount in the entry.
4- If both accounts are not the same so we will take the amount in the entry.
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
RULES FOR MAKING ADJUSTING ENTRIES
NON-FIXED ENTRIES:

RELATIONSHIP BETWEEN ASSET AND EXPENSE

1- Assets Vs Expense

Date Particulars P/R Dr Cr

Dec-31 Prepaid rent XXXX
Rent expense XXXX
[ To record adjusted rent.]

2- Expense Vs Asset

Date Particulars P/R Dr Cr

Dec-31 Rent expense XXXX
Prepaid rent XXXX
[ To record adjusted rent.]

8
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
RULES FOR MAKING ADJUSTING ENTRIES
NON-FIXED ENTRIES:

RELATIONSHIP BETWEEN REVENUE AND LIABILITY

1- Revenue Vs Liablity

Date Particulars P/R Dr Cr

Dec-31 Commission Income XXXX
Unearned commission XXXX
[ To record adjusted unearned commission]

2- Liability Vs Revenue

Date Particulars P/R Dr Cr

Dec-31 Unearned Commission XXXX
Commission income XXXX
[ To record adjusted unearned commission]

9
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
RULES FOR MAKING ADJUSTING ENTRIES

FIXED ENTRIES (RELATED TO ACCRUED)

IF ACCRUED /OUTSTANDING/UNPAID/PAYABLE WITH EXPENSE
It is a relationship of Liability with expense:
(This means that your expense is increased and you are liable to pay that amount)

Date Particulars P/R Dr Cr

Dec-31 -------------- expense XXXX
---------------- payable XXXX
[ To record adjusted accrued salaries expense]

IF ACCRUED /RECEIVABLE WITH REVENUE

It is a relationship of Asset with Revenue
(This means that you earned that amount & now you will receive)

Date Particulars P/R Dr Cr

Dec-31 -------------- receivable XXXX
---------------- income XXXX 10

[ To record adjusted accrued commission income]

 I.Com(1) Accounting PPT Slides by Sir Irfan
RULES FOR MAKING ADJUSTING ENTRIES Cell# 0347-3643211

NON-FIXED ENTRIES: OTHER CASES:

Debit Amount Credit Amount
Cash 40000 Accounts Payable 18000
A/c Receivable 20000 Notes payable 12000
Merchandise Inventory 60000 Unearned Rent 12000
Prepaid Rent 6000 Sales 200000
Office Equipment 30000 Accumulated Depreciation (Office. Equipment) 2000
Purchases 170000 Maaz Capital 97000
Salaries Expense 10000
Sales Return 5000
Total 341000 Total 341000

Data for adjustments:

i. Rent expense for the year Rs.4000.
ii. Salaries expense for the year Rs. 20000.
iii. Accumulated depreciation on Office Equipment Rs. 5000

S.NO Particulars P/R Debit Credit

i. Rent expense 2000
Prepaid rent 2000
ii. Salaries expense 10000
Salaries payable 10000
11
iii. Depreciation expense 3000
Allowances for depreciation (Office Equipment) 3000
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211

ADJUSTING ALL ENTRIES IN ONE

QUESTION
DESIGN BY SIR IRFAN

12
 I.Com(1) Accounting PPT Slides by Sir Irfan
ALL ADJUSTING ENTRIES IN ONE QUESTION Self practice entries by Sir Irfan Cell# 0347-3643211
The following is the Trial Balance of Mr. Irfan, a sole trader, as on December 31. 2021
Debit PKR Credit PKR Data for adjustment on July 31 2021: -
Cash 98800 Commission income 12000 1) Merchandise inventory valued Rs.80000
A/c Receivable 50000 Notes payable 40000 2) Office supplies consumed Rs. 4200
Merchandise inventory (beg) 64000 Unearned rent 10000 3) Accrued wages Rs.1250
Office supplies 8000 Service income 20000
4) Unexpired advertising Rs.2000
Prepaid rent 15000 Allowances for Depreciation (Machinery) 2500
5) Bad debts for the year is 5% of net sales.
Unexpired insurance 14000 Sales Revenue 71200
6) Book value of Equipment is Rs.37500
Sales return & Allowances 1200 Allowances for Depreciation (Equipment) 12500
7) Depreciation on furniture for the year Rs.7700
Equipment 60000 Bank loan 70000
8) Accrued interest on notes receivable Rs.2500
Furniture 45000 Capital 396800
9) Commission earned but not yet received Rs.5600
Machinery 50000
10) Accrued interest on notes payable 15%
Drawing 12000
11) Rent expense for the year Rs.12000
Land 150000
Utility bills expense 18000 12) Salaries expense for the year Rs.18000
Interest expense 4500 13) Unrecorded utilities bills Rs.2300
Marketing expense 8750 14) Insurance was expired Rs.10000
Wages expense 9900 15) Withdrew merchandise from business wrongly recorded in cash account Rs.4500
Repair & Maintenance expense 4150
16) Unearned rent Rs.4500
Advertising expense 5700
17) Service income for the year Rs.25000
Salaries expense 16000 18) Outstanding Marketing expense Rs.3450
Total 635000 Total 635000
19) Cost of goods sold amounting Rs.3000
20) Accumulated depreciation on Machinery Rs.4000
13
Required:
Prepare Adjusting entries
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211

CLOSING ENTRIES
(FORMAT)

14
 I.Com(1) Accounting PPT Slides by Sir Irfan
ABC & CO Cell# 0347-3643211
Closing entries
Date Particulars P.R Debit Credit

Dec,31,2015 Sales XXXX

Purchase return and allowances XXXX

Purchase discount

Merchandise inventory (Ending) XXXX

Commission Income XXXX

Rent revenue XXXX

All other revenue XXXX

Expense and Revenue summary XXXXX

[To closed income into expense and revenue account]

Dec,31,2015 Expense and Revenue summary XXXXX

Purchases XXXX

Merchandise inventory (Beginning) XXXX

Sales return and allowances XXXX

Sales discount XXXX

Transportation in XXXX

Depreciation expense - Machinery XXXX

Office supplies expense XXXX

Insurance expense XXXX

Salaries expense XXXX

Rent expense XXXX

[To close all expenses into expense and revenue account]

Dec,31,2015 Expense and Revenue summary XXXXX

Capital Account XXXXX

15
[To closed Net Income into capital account]

Dec,31,2015 Capital Account XXXXX

Drawing Account XXXXX

 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211

INCOME STATEMENT
(FORMAT)

16
 I.Com(1) Accounting PPT Slides by Sir Irfan
ABC & CO Cell# 0347-3643211
Income statement
For the year ended Dec 31, 2021
Sales/ Sales revenue XXXX
Less: Sales return & allowances (XXX)
Less: Sales discount (XXX)
Net sales XXX

Less: COST OF GOODS SOLD

Merchandise inventory (Opening) XXXX
Add: Purchases XXXX
Less: Purchase return & allowances (XXX)
Less: Purchase discount (XXX)
Net purchase in operation XXXX
Add: Transportation / Carriage in/Cartage in / Freight XXX
Add: Packing charges XXX
Net purchases XXXX
Merchandise available for sale XXXX
Less: Merchandise inventory (ending) (XXXX)
Cost of goods sold (XXXX)
17
Gross Profit XXXX
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
Less: OPERATING EXPENSE
Depreciation expense XXX
Bad debts expense XXX
Advertising expense XXX
Insurance expense XXX
Salaries expense XXX
Utilities expense XXX
Office supplies expense XXX
Sales supplies expense XXX
Travelling expense XXX
All other expenses XXX
Total operating expenses (XXXX)
Unadjusted net income/ Loss XXX/(XXX)

Add: OTHER INCOME

Commission income XXX
Rent revenue XXX
Service income XXX
Total other income XXX 18
Adjusted Net Income/Net Loss XXX/(XXX)
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211

BALANCE SHEET
(FORMAT)

19
 I.Com(1) Accounting PPT Slides by Sir Irfan
ABC & CO Cell# 0347-3643211
Balance Sheet
As on ended Dec 31, 2021
ASSETS Amount Amount EQUITIES Amount Amount
Current Assets: Liabilities:
Cash on hand XXXX Account payable XXXX
Cash at bank XXXX Bills payable XXXX
Merchandise Inventory (ending) XXXX Bonds payable XXXX
Account receivable XXXX Accrued interest on notes payable XXXX
Less: Allowances for bad debts (XXX) XXXX Accrued Interest on Bank loan XXXX
Office supplies XXXX Taxes payable XXXX
Prepaid expense XXXX Accrued, Outstanding, Unpaid, Payable XXXX
expenses
Commission receivable XXXX Unearned commission/ Rent XXXX
Interest receivable XXXX Bank Overdraft XXXX
Marketable securities XXXX Bank Loan XXXX
Investment XXXX Total liabilities XXXX
Total current Assets XXXX

Non- Current Assets/Fixed Assets: Owner’s Equity:

Goodwill XXXX Capital at start XXXX
Land XXXX Less: Drawing XXXX
Office Equipment/Sales Equipment XXXX XXXX
Less: Allowances for depreciation (XXX) Add: Additional investment XXXX
Building XXXX Add: Net income/ XXXX
Less: Net loss (XXXX)
Less: Allowances for depreciation (XXX) Total Owner’s Equity XXXX
Furniture/Fixture XXXX
Less: Allowances for depreciation (XXX)
20
Machinery XXXX
Less: Allowances for depreciation (XXX)
TOTAL ASSETS XXXX TOTAL EQUITIES XXXX
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211

REVERSING ENTRIES
(RULES)
1- If an Asset Account is debit so, we will reverse the entry.

2- If a Liability Account is credit so, we will reverse the entry.

21
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211

FINANCIAL STATEMENT
PAST PAPER QUESTION
(KARACHI BOARD)

22
 I.Com(1) Accounting PPT Slides by Sir Irfan
2023RP Q#8(A) Cell# 0347-3643211

The ledger of Sohail Anwer Rental Agency on January 01, 2022 includes the following selected accounts before adjusting entries have been
prepared:

Account title Debit Credit

Prepared insurance 10800

Supplies 8400

Equipment 75000

Accumulated Depreciation 25200

Notes payable 60000

Unearned Rent 36000

Rent Revenue 180000

Interest expense Nil

Wages expense 42000

Additional Data:

i) The equipment depreciates at the rate of Rs.600 per month.

ii) One third of the unearned rent was earned during the year.
iii) Interest of Rs.5,000 is accrued on the notes payable.
iv) Supplies on hand total Rs.4,500.
v) insurance expired at the rate of Rs.400 per month.
23

Required:
Prepared adjusting entries on Dec 31, 2022.
 I.Com(1) Accounting PPT Slides by Sir Irfan
2023RP Q#8(B) Cell# 0347-3643211

Presented below are the components in Techno Company’s income statement. Determined the missing values . (Computation is not required.)

SNO Sales Cost of Goods Sold Gross Profit Operating expenses Net Income
1 Rs.75,000 ? Rs.28,600 ? Rs.10,800
2 Rs,108,000 Rs.70,000 ? ? Rs.29,500
3 ? Rs.71,900 Rs.99,600 Rs.39,500 ?

ANSWER KEY

SNO Title of Account Amount

1(A)- Cost of goods sold Rs.46,400
1(B)- Operating expenses Rs.17,800
2(A)- Gross profit Rs.38,000
2(B)- Operating expenses Rs.8,500
3(A)- Sales Rs.171,500
3(B)- Net Income Rs.60,100
24
 I.Com(1) Accounting PPT Slides by Sir Irfan
2023RP Q#9 & Q#10 Cell# 0347-3643211
The following is the pre-closing trail balance of Qazi Traders as on December 31,2022
Debit Amount Credit Amount
Cash 48000 Accounts payable 22700
Accounts Receivable 140000 Sales 340000
Merchandise Inventory(1-1-22) 70000 Purchase return and Allowances 10000
Office supplies 5000 Capital-Qazi 150000
Furniture 50000
Purchases 200000
Salaries expense 3500
Prepaid Insurance 2000
Rent Expense 4200
Total 522700 Total 522700
Data for Adjustments:
i) Insurance expired by Rs.1,500. Q#10: Take data from Q#9 prepare:
ii) Depreciation expense on furniture Rs.S,000.
iii) Salaries expense for the year Rs.4,200. Required:
iv) Rent expense for the year Rs.3,500. 1- Prepare adjusted trail balance
v) Office supplies on hand Rs.2,000. 2- Prepare balance sheet
vi) Merchandise Inventory on December 31, 2022 Rs.80,000.
Required: .
1- Prepare closing entries in General Journal. 25
2- Prepare post—closing trial balance.
ANSWER Q#9A-Net Income Q#9B-Post closing trail ANSWER Q#10A-Adjusted T.B Q#10B-Balance Sheet=316200
KEY =142800 balance=321200 KEY =528400
 I.Com(1) Accounting PPT Slides by Sir Irfan
2022RP Q#9 Cell# 0347-3643211
On June 30, 2021, the following selected balances have been taken from the books of Dr. Nasr Medical Center

Cash 270000 X-Ray Machine 640000

Prepaid rent 50000 Consultation fee income 250000
Office supplies 60000 Payable to suppliers 310000
Prepaid insurance 10000 Capital 500000
Salaries expense 20000
Utilities expense 10000

Supplementary data for adjustment on June 30, 2021:

1) Outstanding salaries Rs.5,000.
2) Rent expense for the year Rs.15,000.
3) Depreciation charged on fixed assets at 10% per annum.
4) Office supplies used Rs.25,000.
5) Accrued consultation fee Rs.30,000.
Required:
Attempt any TWO parts:
a) Pass adjusting and closing journal entries.
b) Prepare income statement for the year ended June 30, 2021.
c) Prepare balance sheet as on June 30, 2021. 26

ANSWER KEY Income Statement=Net Income=141000 Balance Sheet=956000

 I.Com(1) Accounting PPT Slides by Sir Irfan
Dr. Nasr Medical Center Cell# 0347-3643211

Adjusting entries
S.No Particulars P.R Debit Credit
1- Salaries expense 5000
Salaries payable 5000
[To adjust outstanding salaries]
2- Rent expense 35000
Prepaid rent 35000
[To adjust prepaid rent]
3- Depreciation expense 64000
Allowances for depreciation-Machine 64000
[To adjust depreciation expense]
4- Office supplies expense 25000
Office supplies 25000
[To adjust office supplies]
5- Consultation fee receivable 30000
Consultation fee income 30000
[To adjust accrued consultation fee income] 27
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
Dr. Nasr Medical Center
Closing entries
Date Particulars P.R Debit Credit
June,30,21 Consultation fee income 280000
Expense and Revenue summary 280000
[To closed income into expense and revenue account]
June,30,21 Expense and Revenue summary 139000
Salaries expense 25000
Rent expense 15000
Depreciation expense 64000
Office supplies expense 25000
Utilities expense 10000
[To close all expenses into expense and revenue account]
June,30,21 Expense and Revenue summary 141000
Capital Account 141000
[To record transfer of Net Income into capital account]

28
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211

Dr. Nasr Medical Center

Income Statement
For the period ended June 30th, 2021

Consultation fee income 250000

Add: Accrued consultation fee 30000
Total consultation fee income 280000

Less: Operating Expenses:

Salaries expense 25000
Rent expense 15000
Depreciation expense X-Ray Machine (640000 X 10% = 64000) 64000
Office supplies expense 25000
Utilities expense 10000
Total operating expenses (139000)
Adjusted Net Profit 141000

29
 I.Com(1) Accounting PPT Slides by Sir Irfan
Dr. Nasr Medical Center Cell# 0347-3643211

Balance Sheet
As on June 30th , 2021
ASSETS Amount Amount EQUITIES Amount Amount

Current Assets: Liability:

Cash 270000 Payable to suppliers 310000

Consultation fee receivable 30000 Salaries payable 5000

Prepaid rent 35000 315000

Office supplies 35000

Prepaid insurance 10000

Total Current Assets 380000

Non-current Assets: Owner’s equity:

X-Ray Machine 640000 Capital 500000

Less: Allowances for depreciation (64000) Add: Net Income 141000

Total Non-current Assets 576000 Total owner’s equity 641000

Total Assets 956000 Total Equities 956000

30
 I.Com(1) Accounting PPT Slides by Sir Irfan
2021RP Q#7 Cell# 0347-3643211
The following are unadjusted account balances taken from the books of M/S. Abdur Rehman Traders on December 31, 2020:
Account title Debit Credit
Cash 10000
Accounts receivable 15000
Merchandise inventory (January 1, 2020) 10000
Prepaid insurance 7000
Office equipment 44000
Allowance for depreciation (Office equipment) 8000
Accounts payable 7000
Capital —Abdur Rehman 60000
Drawings — Abdur Rehman 8000
Sales revenue 97000
Sales return & allowances 7000
Purchases 42000
Purchase discount 7000
Transportation in 4000
Advertising expense 10000
Office salaries expense 22000

Total 179000 179000

Supplementary data for adjustment on December 31, 2020: Required:
i) Prepaid insurance Rs.4,000. Attempt any TWO parts:
ii) Estimated depreciation on office equipment Rs.5,000. a) Pass necessary adjusting journal entries.
iii) Advertising prepaid was Rs.1,500. b) Prepare income statement for the year ended December 31st , 2022.
iv) Merchandise inventory on December 31, 2020 was valued at Rs.16,000. c) Prepare balance sheet as on December 31st , 2022
31
v) Allowance for bad debts estimated Rs.750.

ANSWER KEY Income Statement=Net Income=17750 Balance Sheet=76750

 M/S. Abdur Rehman Traders I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
Income Statement
For the period ended December 31st, 2020
Sales 97000
Less: Sales return and allowances (7000)
Net Sales 90000

Less: COST OF GOODS SOLD:

Merchandise inventory(Opening) 10000
Add: Purchases 42000
Less: Purchase discount (7000)
Net purchases in operation 35000
Add: Transportation in 4000
Net purchases 39000
Merchandise available for sale 49000
Merchandise inventory(Ending) (16000)
Cost of goods sold (33000)
Gross Profit 57000

Less: OPERATING EXPENSES

Insurance expense 3000
Depreciation expense – Office Equipment 5000
Advertising expense 8500
Bad debts expense 750
32
Office salaries expense 22000
Total operating expenses (39250)

Adjusted Net Income 17750

 I.Com(1) Accounting PPT Slides by Sir Irfan
M/S. Abdur Rehman Traders Cell# 0347-3643211
Balance Sheet
As on December 31st, 2020
ASSETS Amount Amount EQUITIES Amount Amount

Current Assets: Liability:

Cash 10000 Accounts payable 7000

Accounts receivable 15000

Less: Allowances for Bad dets (750) 14250

Merchandise inventory 16000

Prepaid insurance 4000

Prepaid advertising 1500

Total Current Assets 45750 Owner’s equity:

Capital 60000

Non-current Assets: Less: Drawing (8000)

Office Equipment 44000 52000

Less: Allowances for depreciation (13000) Add: Net Income 17750

Total Non-current Assets 31000 Total owner’s equity 69750

33

Total Assets 76750 Total Equities 76750

 I.Com(1) Accounting PPT Slides by Sir Irfan
2019RP Q#7 Cell# 0347-3643211
The following is the trial balance of Mr. Salman, a sole trader, as on December 31, 2018:
Account title Debit Credit
Cash 100000
Accounts receivable 40000
Purchases 111300
Inventory beginning 10000
Prepaid salaries 10000
Furniture 65000
Machinery 100000
Rent expense 8000
Sales return & allowances 2000
Sales discount 1500
Accounts payable 42000
Allowance for depreciation (Machinery) 10000
Allowance for bad debts 1200
Sales 200000
Purchase discount 2000
Capital — Salman 192600

Total 447800 447800

Data for Adjustment on December 31, 2018:
1) Merchandise inventory was valued at Rs.25,000. Required:
2) Salaries expired Rs.6,000. Prepare adjusting and closing entries in General Journal.
3) Unpaid rent Rs.2,000. OR
4) Depreciation expense (Furniture) Rs.2,000. Prepare Income Statement for the year ended December 31, 2018 and 34
5) Depreciation expense (Machinery) Rs.1,000. Balance Sheet as on December 31, 2018.
6) Bad debts expense Rs.800.
ANSWER KEY Income Statement=Net Income=82400 Balance Sheet=319000
 Mr. Salman I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
Income Statement
For the period ended December 31st, 2018
Sales 200000
Less: Sales return and allowances (2000)
Less: Sales discount (1500)
Net Sales 196500

Less: COST OF GOODS SOLD:

Merchandise inventory(Opening) 10000
Add: Purchases 111300
Less: Purchase discount (2000)
Net purchases 109300
Merchandise available for sale 119300
Merchandise inventory(Ending) (25000)
Cost of goods sold (94300)
Gross Profit 102200

Less: OPERATING EXPENSES

Salaries expense 6000
Rent expense 10000
Depreciation expense - Furniture 2000
Depreciation expense - Machinery 1000
Bad debts expense 800
35
Total operating expenses (19800)

Adjusted Net Income 82400

 I.Com(1) Accounting PPT Slides by Sir Irfan
Mr. Salman Cell# 0347-3643211
Balance Sheet
As on December 31st, 2018
ASSETS Amount Amount EQUITIES Amount Amount

Current Assets: Liabilities:

Cash 100000 Accounts payable 42000

Accounts receivable 40000 Rent payable 2000

Less: Allowances for Bad dets (2000) 38000 Total liabilities 44000

Merchandise inventory 25000

Prepaid salaries 4000

Total Current Assets 167000

Non-current Assets: Owner’s equity:

Furniture 65000 Capital 192600

Less: Allowances for depreciation (2000) 63000 Add: Net Income 82400

Machinery 100000 Total owner’s equity 275000

Less: Allowances for depreciation (11000) 89000 36

Total Assets 319000 Total Equities 319000

 I.Com(1) Accounting PPT Slides by Sir Irfan
2018RP Q#8 Cell# 0347-3643211
The following have been balances taken from pre-closing trial balance of UWH Traders of December 31, 2017:
Account title Debit Credit
Cash 140,000
Accounts receivable 75,000
Bank 100,000
Merchandise inventory (opening) 35,000
Unexpired Insurance 25,000
Purchases 230,000
Equipment 60,000
Purchase returns Rs.15,000
Transportation — in 5,000
Sales discount 5,000
Accounts payable 60,000
Bank loan 130,000
Rent expense 60,000
Sales 305,000
Sales returns 5,000
Commission Income 17,000
Capital 237,000
Drawings 24,000

Total 764,000 764,000

Data for Adjustment on December 31. 2017: Required:
(i) Merchandise inventory at December 31, 2017 Rs.60,000. 1) Income statement for the year ended December 31. 2017.
37
(ii) Unpaid rent Rs.2,000. OR
(iii) Insurance expired Rs.12,000. Adjusting and closing entries in general journal.
(iv) Depreciation on equipment estimated at Rs.4.000. 2) Balance sheet as on December 31, 2017.
ANSWER KEY Income Statement=Net Income=39000 Balance Sheet=444000
 I.Com(1) Accounting PPT Slides by Sir Irfan
2017RP Q#8 Cell# 0347-3643211

Accounts balance and data for adjustment of Wajid Brothers at the end of June 30, 2016 are as follows:

Accounts Receivable Rs.10,000; Accounts payable Rs.12,000; Sales Rs.105,000; Sales Return and Allowances Rs. 5,000; Purchases
Rs.50,000; Purchase Discount Rs.2,000; Cash Rs.50,000; Merchandise Inventory Rs.15,000; Unearned Commission Rs.18,000;
Prepaid Rent Rs.8,000; Capital-Wajid Rs.71,000; Furniture Rs. 20,000; Allowance for Depreciation-Furniture Rs.3,000; carriage-in
Rs.2,000; salary Expense Rs. 36,000; advertising expense Rs. 10,000; Drawing-Wajid Rs. 5,000.

Data for Adjustment on June 30, 2016:

i. Merchandise Inventory on June 30, 2016 Rs. 20,000.

ii. Actual Salary for Year Rs. 40,000.
iii. Depreciation on fixed assets @ of 10% of cost.
iv. Estimated Bed Debts Expense for the year 1% Net Sales.
v. Commission Income for the year Rs. 12,000.
vi. 1/2 of the Rent expired during the period.

Required:
1. Income Statement for the year ended June 30, 2016.
(OR)
Closing entries in General Journal

2. Balance Sheet as on June 30, 2016 in classified form.

38

ANSWER KEY Income Statement=Net Income=10000 Balance Sheet=98000

 I.Com(1) Accounting PPT Slides by Sir Irfan
2016RP Q#8 Cell# 0347-3643211

On December 31, 2015 following balances were extracted from Rehan & Co.
Debit Balances:
Cash Rs.7,000, Accounts Receivable Rs.30,000, Investment Rs.25,000, Mds. Inventory Rs.15,000, Office supplies Rs.4,000,
Machine Rs.40,000, Insurance expense Rs.5,000, Drawing Rs.4,000, Purchase Rs.32,000, Sales return Rs.5,000, Transportation in
Rs.10,000, Rent expense Rs.20,000, Total Rs. 197,000

Credit Balances:
Allowance for depreciation - Machine Rs.2,000, Unearned commission Rs.20,000, Sales Rs.75,000, Accounts payable Rs.15,000
Capital Rs.50,000, Purchase returns Rs.2,000, Notes Payable Rs.33,000, Total Rs. 197,000.

Additional Information:
a) Merchandise Inventory on Dec. 31, 2015 Rs.5,000
b) Depreciation on machine Rs.3,000
c) Office supplies used Rs.2,000
d) Insurance Expense Rs.3,000
e) Unearned commission Rs.1,000
f) Salaries expense for the year Rs.10,000

Required:
Prepare any Two of the following:
i. Income Statement
ii. Balance Sheet
39
iii. Closing entries in General Journal

ANSWER KEY Income Statement=Net Income=1000 Balance Sheet=106000

 Rehan & Co. I.Com(1) Accounting PPT Slides by Sir Irfan
Income Statement Cell# 0347-3643211
For the period ended December 31st, 2015
Sales 75000
Less: Sales return and allowances (5000)
Net Sales 70000

Less: COST OF GOODS SOLD:

Merchandise inventory(Opening) 15000
Add: Purchases 32000
Less: Purchase return and allowances (2000)
Net purchases in operation 30000
Add: Transportation in 10000
Net purchases 40000
Merchandise available for sale 55000
Merchandise inventory(Ending) (5000)
Cost of goods sold (50000)
Gross Profit 20000

Less: OPERATING EXPENSES

Depreciation expense - Machinery 3000
Office supplies expense 2000
Insurance expense 3000
Salaries expense 10000
Rent expense 20000
Total operating expenses (38000)
Unadjusted net profit/Net loss (18000) 40
Add: OTHER INCOME
Commission income 19000

Adjusted net profit 1000

 I.Com(1) Accounting PPT Slides by Sir Irfan
Rehan and Co. Cell# 0347-3643211
Balance Sheet
As on December 31st, 2015
ASSETS Amount Amount EQUITIES Amount Amount

Current Assets: Liabilities:

Cash 7000 Accounts payable 15000

Accounts receivable 30000 Notes payable 33000

Merchandise inventory 5000 Salaries payable 10000

Office supplies 2000 Unearned commission 1000

Prepaid insurance 2000 Total liabilities 59000

Investment 25000

Total Current Assets 71000

Owner’s equity:

Non-current Assets: Capital 50000

Machine 40000 Less: Drawing (4000)

Less: Allowances for depreciation (5000) 46000

Total Non-current Assets 35000 Add: Net Income 1000

41
Total owner’s equity 47000

Total Assets 106000 Total Equities 106000

 Rehan and Co. I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
Closing entries
Date Particulars P.R Debit Credit
Dec,31,2015 Sales 75000
Purchase return 2000
Merchandise inventory (Ending) 5000
Commission Income 19000
Expense and Revenue summary 101000
[To closed income into expense and revenue account]
Dec,31,2015 Expense and Revenue summary 100000
Purchases 32000
Merchandise inventory (Beginning) 15000
Sales return and allowances 5000
Transportation in 10000
Depreciation expense - Machinery 3000
Office supplies expense 2000
Insurance expense 3000
Salaries expense 10000
Rent expense 20000
[To close all expenses into expense and revenue account]
Dec,31,2015 Expense and Revenue summary 1000
Capital Account 1000
[To closed Net Income into capital account]
Dec,31,2015 Capital Account 4000 42

Drawing Account 4000

[To closed Drawing into Capital Account]
 I.Com(1) Accounting PPT Slides by Sir Irfan
2015RP Q#7 Cell# 0347-3643211

Given: Balance extracted from the ledger of Mustafa Traders on March 31, 2015 before adjustment are as follows:

Debit Balances:
Cash Rs.100,000; Merchandise Inventory April 01 Rs.80,000; Office Equipment Rs.300,000; Purchase Rs.520,000; Salaries Expense
Rs.55,000; Office Supplies Rs.5,000; Prepaid Insurance Rs.12,000; Accounts Receivable Rs.200,000; Sales Returns & Allowance
Rs.5,000; Furniture Rs. 173,000; Mustafa Drawings Rs,50,000; Transportation-in Rs.4,000; Rent Expense Rs.50,000 Total=Rs. 1,554,000

Credit Balances:
Sales Rs.750,000; Purchase Returns & Allowance Rs.5,000; Mustafa Capital Rs.600,000; Allowance for Depreciation (Office equipment)
Rs.25,000; Accounts payable Rs.170,000; Commission Income Rs.4,000; Total=Rs.1,554,000.

Data for Adjustment on March 31, 2015:

i. Merchandise Inventory was valued at Rs.100,000.
ii. Salaries payable Rs.5,000.
iii. Commission accrued Rs. 1,000.
iv. Office supplies unused Rs.2,000.
v. Insurance expired Rs. 8,000.
vi. Depreciation on office equipment for the year was estimated at Rs.5,000.

Required:
Prepare any two of the following:
i. Closing entries in general journal
ii. Income Statement 43
iii. Balance Sheet

ANSWER KEY Income Statement=Net Income=125000 Balance Sheet=850000

 I.Com(1) Accounting PPT Slides by Sir Irfan
Mustafa Traders Cell# 0347-3643211
Closing entries
Date Particulars P.R Debit Credit
Mar,31,2015 Sales 750000
Purchase return and allowances 5000
Merchandise inventory (Ending) 100000
Commission Income 5000
Expense and Revenue summary 860000
[To closed income into expense and revenue account]
Mar,31,2015 Expense and Revenue summary 735000
Purchases 520000
Merchandise inventory (Beginning) 80000
Sales return and allowances 5000
Transportation in 4000
Salaries expense 60000

Office supplies expense 3000

Insurance expense 8000

Depreciation expense – Equipment 5000

Rent expense 50000

[To close all expenses into expense and revenue account]

Mar,31,2015 Expense and Revenue summary 125000
Capital Account 125000
[To closed Net Income into capital account]
44
Mar,31,2015 Capital Account 50000
Drawing Account 50000
[To closed Drawing into Capital Account]
 Mustafa Traders I.Com(1) Accounting PPT Slides by Sir Irfan
Income Statement Cell# 0347-3643211
For the period ended March 31st, 2015
Sales 750000
Less: Sales return and allowances (5000)
Net Sales 745000

Less: COST OF GOODS SOLD:

Merchandise inventory(Opening) 80000
Add: Purchases 520000
Less: Purchase Returns & Allowance (5000)
Net purchase in operation 515000
Add: Transportation in 4000
Net purchases 519000
Merchandise available for sale 599000
Merchandise inventory(Ending) (100000)
Cost of goods sold (499000)
Gross Profit 246000
Less: OPERATING EXPENSES
Salaries expense 60000
Office supplies expense 3000
Insurance expense 8000
Depreciation expense - Equipment 5000
Rent expense 50000
Total operating expenses (126000)
Unadjusted Net Income 120000
Add: OTHER INCOME
Commission Income 5000
Adjusted Net Income 125000
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
Mustafa Traders
Balance Sheet
As on March 31st, 2015
ASSETS Amount Amount EQUITIES Amount Amount
Current Assets: Liabilities:
Cash 100000 Accounts payable 170000
Merchandise inventory 100000 Salaries payable 5000
Office supplies 2000 Total liabilities 175000
Prepaid insurance 4000
Accounts receivable 200000
Commission receivable 1000
Total current assets 407000

Non-current Assets: Owner’s equity:

Office Equipment 300000 Capital 600000
Less: Allowance for dep (30000) Less: Drawing (50000)
Book value of Office Equipment 270000 550000
Furniture 173000 Add: Net Income 125000
Total non-current assets 443000 Total owner’s equity 675000
46

Total Assets 850000 Total Equities 850000

 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
2014R Q#8(A)

FINANCIAL STATEMENT:
(i) Merchandise Inventory (Opening) Rs. 25,000
(ii) Purchased Merchandise Rs. 133,000
(iii) Merchandise Inventory (Ending) Rs. 18,000
(iv) Purchases returns Rs. 500
(v) Purchases discount Rs. 1,000
(vi) Transportation Rs. 800

Required:

a) Compute Cost of Goods Sold.

47

ANSWER KEY Cost of Goods Sold=139300

 I.Com(1) Accounting PPT Slides by Sir Irfan
2014R Q#8(B) Cell# 0347-3643211
The following balances of Qasim & Co. on December 31, 2013 was as under:
Account title Debit Credit
Cash 40,000
Accounts receivable 60,000
Merchandise inventory ending 18,000
Prepaid insurance 20,000
Notes payable 20,000
Unearned commission 10,000
Capital — Qasim 150,000
Sales 120,000
Cost of goods sold ?????
Salaries expense 11,000
Office supplies 8,000
Rent expenses 3,000
Supplementary Data for Adjustments for December 31, 2013:
i) Office supplies used Rs.5,000.
ii) Accrued salaries Rs.4,000.
iii) Commission earned Rs.7,000.
iv) Bad debt estimated 2% on sales.
v) Insurance expired during the year Rs.6,000
Required:
a) Income statement for the year ended December 31, 2013. b)
b) Balance sheet as of December 31, 2013. 48
0R
Prepare closing entries and post-closing trial balance.

ANSWER KEY Cost of goods sold=140000 Income statement=Net Loss=44400 Balance Sheet=132600
 I.Com(1) Accounting PPT Slides by Sir Irfan
2014P Q#8 Cell# 0347-3643211
The following balances have been taken from-the ledger of Raza & co. on December 31, 2013:

Debit Balances Credit Balances

Cash 60,000 Accounts Payable 38,000
Account Receivable 40,000 Notes Payable 32,000
Merchandise Inventory 80,000 Unearned Rent 32,000
Prepaid Insurance 26,000 Sales 220,000

Office Equipment 50,000 Accumulated Depreciation 22,000

Purchase 190,000 Raza's Capital 157,000

Salaries Expense 30,000
Sales Returns 25,000

Total 501000 Total 501000

Data for Adjustment on December 31, 2013

Required:
i. Merchandise Inventory Rs. 80,000 Prepare any two of the following:
ii. Insurance expired Rs. 4,000
iii. Bad debts estimated Rs. 6,00 1. Income statement for the year ended Dec. 31, 2013.
iv. Outstanding salaries Rs. 4,000 2. Balance sheet as on Dec. 31, 2013.
v. Depreciation on office equipment for the year. Rs. 3,000
vi. Rent earned Rs. 8,000 3. Closing entries on Dec. 31, 2013

49

ANSWER KEY Income Statement=Net Loss=(28600) Balance Sheet=226400

 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
2013R Q#8
Given: Accounts balances and data for adjustment of Zulfiqar & co. at the end of the accounting period, June 30, 2012 are as
follows:
Debit Balances:
Cash Rs.59,500/-, Accounts Receivable Rs.73,000/-Merchandise Inventory July 1, 2011 Rs. 198,000/- Prepaid Insurance Rs. 24,000/-
Furniture Rs. 45,000/- Drawing Rs. 50,000/- Purchases Rs.284,000/- Salaries expenses Rs. 58,000/- Rent expenses Rs. 32,000/-.

Credit Balances:
Notes Payable Rs.20,000/- Unearned commission Rs.8,500/- Accumulated depreciation- furniture Rs.9,000/- Zulfiqar Capital
Rs.400,000/- Sales Rs.386,000/-
Data for Adjustment on June 30, 2012

a) Cost of goods sold Rs.242,000/-

b) Unearned commission Rs.6,000/-
c) Salaries expenses for the year Rs. 72,000/-
d) Accumulated depreciation Rs.13,500/-
e) Prepaid Insurance Rs.16,000/-

Required:

i. Prepare Income statement and Balance Sheet.

ii. Prepare post-closing Trial Balance OR Make Income Summary Account in the General Ledger.
50
 I.Com(1) Accounting PPT Slides by Sir Irfan
Zulfiqar & Co Cell# 0347-3643211
Income Statement
For the period ended June 30th, 2012
Sales 386000
Less: Cost of goods sold (242000)
Gross Profit 144000

Less: OPERATING EXPENSES

Salaries expense 72000
Depreciation expense - Furniture 4500
Insurance expense 8000
Rent expenses 32000
Total operating expenses (116500)

Unadjusted Net Income 27500

Add: OTHER INCOME
Commission income 2500
Adjusted Net Income 30000

Computation for Merchandise inventory (ending)

Merchandise inventory (Beginning) 198000

Add: Purchases 284000
Merchandise available for sale 482000
Less: Cost of goods sold (242000)
Merchandise inventory (ending) 240000
51
Hint: How to calculate Case#1: If the Cost of goods sold is given in the question so we will calculate merchandise inventory as above.
MERCHANDISE INVENTORY Case#2: If the Cost of goods sold is not given in the question so we will take merchandise inventory (beginning) as a merchandise
(ENDING)? inventory (ending).
 I.Com(1) Accounting PPT Slides by Sir Irfan
Zulfiqar & Co Cell# 0347-3643211
Balance Sheet
As on June 30th, 2012
ASSETS Amount Amount EQUITIES Amount Amount

Current Assets: Liabilities:

Cash 59500 Notes payable 20000

Accounts receivable 73000 Salaries payable 14000

Merchandise inventory 240000 Unearned Commission 6000

Prepaid insurance 16000 Total liabilities 40000

Total current assets 388500

Non-current Assets: Owner’s equity:

Furniture 45000 Capital 400000

Less: Allowances for depreciation {13500) Less: Drawing (50000)

Add: Net Income 30000

Total non-current asset 31500 Total Owner’s equity 380000

52
Total Assets 420000 Total Equities 420000
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
2013P Q#8
The following is the pre-closing trial balance of Syed Sons for the year ended Dec. 31, 2012:
Debit Balances:
Cash Rs.15,000; Accounts receivable Rs.10,000; Merchandise inventory (beginning) Rs.6,500; Prepaid shop rent Rs.4,000; Sales
equipment Rs.10,000; Purchases Rs.20,000; Office supplies expense Rs.2,000; Salaries expense Rs.14,000; Miscellaneous
expense Rs.1,500; Sales return and allowance Rs.2,000. (Total Rs.85,000).

Credit Balances:
Sales revenue Rs.45,000; Purchase discount Rs.1,500; Commission income Rs.4,000; Accounts payable Rs.4,000; Allowance for
bad debts Rs.500; Syed's capital Rs.30,000. (Total Rs.85,000).

Data for Adjustment on December 31, 2012:

(i) Prepaid shop rent was Rs.1,000.
(ii) Office supplies unused Rs.500.
(iii) Allowance for bad debts was increased by Rs.300.
(iv) Outstanding salaries Rs.3,000.
(v) Depreciation on sales equipment was estimated at Rs.1,500.
(vi) Commission unearned Rs.1,000.
(vii) Merchandise Inventory was valued on December 31,2012 Rs.3,000.

Required:
a) Prepare income statement for the year ended December 31, 2012.
b) Prepare balance sheet as of December 31, 2012 in classified form.
53
c) Prepare closing entries in General Journal. OR Prepare post-closing trial balance as on December 31, 2012.

ANSWER KEY Income Statement=Net Loss=(800) Balance Sheet=37200

 I.Com(1) Accounting PPT Slides by Sir Irfan
2012(R) Q#8 Cell# 0347-3643211

Given: Following are the trial balance of Ahmed & Co. as of Dec. 31, 2011:
Debit Balances:
Cash Rs. 12,400/-, merchandise inventory Rs, 87,000/-, account receivable Rs. 56,000/-, office supplies Rs. 1,600/-, unexpired insurance
Rs. 4,200/-, land Rs. 68,000/-, building Rs. 164,000/-, office equipment Rs. 42,600/-, Ahmed's drawings Rs. 20,000/-, sales discount Rs.
7,000/-, cost of goods sold Rs. 316,600/-, sales salaries expenses Rs. 55,200/-, advertising expenses Rs. 12,200/-, office salaries expenses
Rs. 44,600/-, travelling expenses Rs. 15,600/-.
Credit Balances:
Account payable Rs. 38,000/-, Ahmed's capital Rs. 322,400/-, sales Rs. 504,000/-, allowance for depreciation (Equipment) Rs. 10,600/-,
allowance for depreciation (building) R s. 32,000/-.

Data for Adjustment at Dec. 31:

a) Office supplies on hand Rs. 500/-

b) Unexpired insurance Rs. 3,000/-
c) Depreciation for the year on building Rs. 4,000/-, office equipment Rs. 1,800/-.
d) Unpaid salaries: sales salaries Rs. 3,000/-, office salaries Rs. 2,000/-
Required:
i. Prepare Income statement for the year ended Dec. 31, 2011.
ii. Prepare balance sheet as on Dec. 31, 2011.
iii. Prepare adjusting entries in General Journal. (OR) Prepare closing entries in General Journal. 54

ANSWER KEY Income Statement=Net Income Rs.39700 Balance Sheet=385100

 I.Com(1) Accounting PPT Slides by Sir Irfan
2012(P) Q#8 Cell# 0347-3643211
Following is the Pre-Closing Trial Balance of Ishaque and Company for the year ended Dec. 31, 2012.

ACCOUNT TITLE ACCOUNT # DEBIT CREDIT

Cash 40000
Accounts Receivable 50500
Prepaid Insurance 6000
Merchandise Inventory (l. 1.2011) 42000
Office Equipment 50000
Account Payable 40000
Notes Payable 20000
Unearned Commission 3500
Capital Ishaque 150000
Drawing - Ishaque 12000
Sales Revenue 262000
Sales Discount 3000
Purchases 120000
Carriage - In 8000
Utility Expense 25000
Advertising Expense 34000
Salaries Expense 40000
Rent Expense 45000
55
TOTAL 475500 475500
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211

Data for Adjustment on December 31st 2012:

(i) Merchandise inventory (31 - 12 - 2011) Rs.60,000.
(ii) Bad debts expense @ 5% of net sales.
(iii) Insurance is prepaid up to the extent of Rs.1,500.
(iv) Unearned commission Rs.1,000.
(v) Goods costing Rs.1,000 were taken by Mr. Ishaque for private use were overlooked.

Required:
(i) Prepare adjusting entries in General Journal and prepare cost of goods sold account.
(ii) Record closing entries in General Journal on December 31, 2011.
OR
(i) Prepare income statement for the year ended December 31, 2011
(ii) Prepare classified balance sheet as of December 31, 2011.

56

ANSWER KEY Income Statement=Net Loss=(8950) Balance Sheet=189050

 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
2011(R) Q#8
GIVEN: Following are the account balances of M/S. AK & Sons on June 30, 2010.

Cash in hand Rs. 35,000/-, Furniture Rs. 140,000/-, Cash at Bank Rs. 45,000/-, Capital Rs. 428,000/-, Accumulated Depreciation
(Furniture) Rs. 23,000/-, Machinery Rs. 220,000/-, Accumulated Depreciation(Machinery) Rs. 35,000/-, Purchases Rs. 135,000/-,
Sales Rs. 280,000/-, Account Receivable Rs.30,000/-, Account Payable Rs. 42,000/-, Purchase return & Allowance Rs. 4,000/-,
Allowance for Bad Debt Rs. 6,000/-, Merchandise Inventory (beginning) Rs. 25,000/-, Merchandise Inventory (ending) Rs. 87,000/-,
Salaries Expense Rs. 45,000/-, Rent Expense Rs. 33,000/-, Advertising Expense Rs. 22,000/-, Traveling Expense Rs. 32,000/-, Office
Supplies Expense Rs. 12,000/-, Utility Charges Rs. 26,000/-, Bad Debt Expense Rs. 2,000/-, Depreciation Expense Rs. 10,000/-, Sales
Return and Allowance Rs. 6,000/-.

Required:

i. Record Closing entries in General Journal on June 30, 2010.

ii. On July 1, 2010, record opening entries in General Journal and also prepare a post-closing Trial Balance as on June 30, 2010.

(OR)
Prepare:
i. Income statement in report form.
ii. Balance sheet as on June 30, 2010

57

ANSWER KEY Income Statement=Net Profit Rs.23000 Balance Sheet=493000

 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
2011(P) Q#8
The balances taken from the pre-closing Trial Balance of Usra & Co. as of December 31, 2010 are as
follows:
Debit Balances:
Cash Rs. 40,000/-, Accounts Receivable Rs. 35,000/-, Merchandise inventory (opening). Rs. 30,000/-, Unexpired insurance Rs. 20,000
Purchase Rs. 130,000/-, Transportation-in Rs. 5,000/-, Sales discount Rs. 5,000/-, Sales equipment Rs. 40,000/-, Drawings Rs.
12,000/-, Rent expenses Rs. 25,000/-
Credit Balances:
Accounts payable Rs. 25,000/-, Sales Revenue 105,000/-, Commission Income Rs. 7,000/-, Purchases return Rs. 5,000/-, Long-term
Loan Rs. 80,000/-, Capital Rs. 120,000/-

Data for Adjustments on December 31, 2010:

i. Merchandise Inventory at December 31, 2010 Rs. 60,000/
ii. Unpaid Rent Rs. 2,000/-
iii. Insurance expired Rs. 12,000/-
iv. Depreciation on Sales Equipment estimated at Rs. 4,000/-

Required:
a) Prepare Income statement for the year ended December 31, 2010.
b) Prepare balance sheet as of December 31, 2010 in classified form.
c) Prepare closing entries in General Journal (OR) Adjusted Trial Balance.
58

ANSWER KEY Income Statement=Net Loss=(36000) Balance Sheet=179000

 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
2010RP Q#8
Balances taken from the Ledger of Maaz a sole trader on December 31, 2009 before adjustments are as under.
Debit Amount Credit Amount
Cash 40000 Accounts Payable 18000
A/c Receivable 20000 Notes payable 12000
Merchandise Inventory 60000 Unearned Rent 12000
Prepaid Insurance 6000 Sales 200000
Office Equipment 30000 Accumulated Depreciation (Of. Equipment) 2000
Purchases 170000 Maaz Capital 97000
Salaries Expense 10000
Sales Return 5000
Total 341000 Total 341000
Data for adjustments:

i. Merchandise Inventory on December 31, 2009 was values at Rs. 80,000.

ii. Insurance was expired Rs. 4,000.
iii. Bad debts expense estimated Rs. 600.
iv. Outstanding salaries amounting to Rs. 4,000.
v. Depreciation expense on equipment for the year Rs. 3,000.
vi. Rent earned Rs. 8,000.
Required:
i. Prepare a multiple steps Income Statement and Classified Balance Sheet for December 31, 2009.
ii. ii. Prepare Adjusted Trial Balance. (OR) Prepare closing entries. 59

ANSWER KEY Income Statement=Net Income Rs.31400 Balance Sheet=166400

 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
2009RP Q#8
GIVEN: Ledger balances and adjustment data for Rajput Company at the end of the annual accounting period, December 31, 2008
are as follows:

Debit Balances:
Cash Rs.4,000; Accounts receivable Rs.8,000; Merchandise inventory —January 1 Rs.5,000; Unexpired insurance Rs.3,000;
Furniture Rs.10,000; Drawings Rajput Rs.6,000; Purchases Rs.40,000; Salaries expenses Rs.15,000; Rent expenses Rs.2,000.

Credit Balances:
Accounts payable Rs.7.000; Unearned commission Rs.3,000; Allowance for depreciation Rs.3,000; Capital Rajput Rs.30,000; Sales
Rs.50,000.

Adjustment Data:
(i) Merchandise inventory at December 31, Rs.6,000.
(ii) Insurance expired by Rs.2,000.
(iii) Bad debts estimated @ 2% of sales.
(iv) Depreciation estimated @ 10% of the cost of furniture.
(v) Accrued salaries Rs.1,000.
(vi) Unearned commission Rs.1,000.

Required:
a) Prepare a multi-step Income Statement and a classified Balance Sheet for December 31, 2008.
b) Prepare closing entries in General Journal. OR Prepare an adjusted trial balance.
60

ANSWER KEY Income Statement=Net Loss=(9000) Balance Sheet=24000

 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
2008RP Q#3
GIVEN: The following balances have been taken from the pre-closing trial balance of Khursheed Zaidi on 31.12.2007:

Debit Balances:
Cash Rs.20,000; Accounts receivable Rs.15,000; Merchandise inventory (01.01.2007) Rs.30,000; Office equipment Rs.40,000;
Purchases Rs.120,000; Machine Rs.100,000; Salaries expense Rs.9,000; Wages expense Rs.4,000; Packing charges Rs.10,000;
Prepaid rent Rs.10,000; Khursheed Zaidi's Drawings Rs.2,000; Transportation-in Rs.2,000; Sales returns Rs.20,000.

Credit Balances:
Sales revenue Rs.200,000; Purchase returns Rs.2,000; Accumulated depreciation on machine Rs,10,000; Accounts payable
Rs.5,000; Bank loan Rs.20,000; Khursheed Zaidi's Capital Rs.145,000.

Supplementary Data for Adjustments:

(i) Outstanding salaries Rs.6,500.

(ii) Rent expense for the year Rs.8,000.
(iii) Provide bead debts @ 2% of net sales.
(iv) Depreciation on fixed assets at 10% per annum.
(v) Merchandise inventory on 31.12.2007, Rs.20,000.

Required:
a) Prepare Income Statement for the year ended 31.12.2007.
b) Prepare classified Balance Sheet on 31.12.2007.
61

ANSWER KEY Income Statement=Net Loss=(5100) Balance Sheet=169400

 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
2007RP Q#8(B)

COST OF GOODS SOLD:

The following balances are taken from the books of Shah & Sons for the year ending Dec. 31, 2006.

a) Purchase Rs.10,000
b) Purchase return Rs.1,000
c) Purchase discount Rs.500
d) Transport expense Rs.1,200
e) Merchandise inventory opening Rs.3,000
f) Merchandise inventory ending Rs.2,000

Required:
Prepare the Statement of Cost of Goods Sold.

62

ANSWER KEY: Cost of goods sold = Rs.10700

 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
2007RP Q#6

GIVEN:
The following unadjusted balances are obtained from the ledger of a trader "EZ" for the 3 months ended on Mach 31, 2007.

Cash Rs.5,000; Accounts receivable Rs.27,000; Merchandise inventory Rs.30,000; Unexpired insurance Rs.3,000; Sales Rs.105,000;
Purchases Rs.60,000; Sales return and allowances Rs.4,000; Purchase discount Rs.2,000; Accounts payable Rs.12,000; "EZ Drawing
Rs.15,000; Unearned rent Rs.12,000; General expenses Rs.2,000; Salaries expenses Rs.15,000; "EZ Capital ?

Adjustments:

i. Merchandise inventory valued at Rs.25,000.

ii. Insurance expired 1/3.
iii. Unearned rent 2/3.
iv. Accrued salaries Rs.3,000.

Required:
Prepare Income Statement and a Balance Sheet for the first quarter ended March 31,2007.

63

ANSWER KEY Capital=30000 Income Statement=Net Income=21000 Balance Sheet=59000

 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
2006RP Q#7
GIVEN: The following was taken from the ledgers of Abbas & Co. on December 31, 2005:

Debit Balances Credit Balances

Cash 55,000 Accounts Payable 30,000
Account Receivable 150,000 Sales 400,000
Merchandise Inventory (01/0/05) 80,000 Purchase return 15,000
Office supplies 8,000 Abbas Capital 178,000
Furniture 65,000

Purchases 250,000
Salaries expenses 5,000
Prepaid insurance 5,000
Rent expenses 5,000

Total 623,000 Total 623,000

Data for Adjustments:
1) Insurance expired by Rs.2,500.
2) Depreciation expenses on furniture Rs.6,500.
3) Salaries expenses for the year Rs.7,000.
4) Rent expense for the year Rs.4,000.
5) Office supplies on hand Rs.3,000.
6) Merchandise inventory on December 31, 2003 Rs.85,000.

Required:
(i) Prepare Income Statement for the year ended Dec. 31, 2005. 64
(ii) Prepare classified Balance Sheet as of December 31, 2005.

ANSWER KEY Income Statement=Net Income=145000 Balance Sheet=355000

 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
2005RP Q#7
The following balances were taken from the pre-closing Trial Balance of Fatima & Co. prepared on Dec. 31, 2004.

Debit Balances:
Cash Rs.6,400; Accounts receivable Rs.40,000; Merchandise inventory (Jan.01) Rs.32,000; Sales equipment Rs.30,000; Prepaid
insurance Rs.800; Sales supplies Rs.1,200; Purchases Rs.100,000; Sales salaries expenses Rs.9,600; Office salary expense Rs.4,000;
Advertising expense Rs.4,000 (Total Rs.228,000).

Credit Balances:
Sales Rs.156,000; Accounts payable Rs.24,000; Fatima capital Rs.48,000 (Total Rs.228,000).

Data for adjustments on December 31:

(i) Merchandise inventory was valued at Rs.30,000.
(ii) Sales supplies were Rs.200.
(iii) Insurance expired Rs.400.
(iv) Unpaid sales salaries were Rs.500.
(v) Depreciation on fixed assets was estimated Rs.5,000.
(vi) Bad debts on accounts receivable Rs.3,000.

Required:
(i) Prepare Income Statement for the year ended Dec. 31, 2004.
(ii) Prepare Report form Balance Sheet as of Dec. 31, 2004.
65

ANSWER KEY Income Statement=Net Income=26500 Balance Sheet=99000

 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
2004RP Q#6
The following balances were taken from the pre-closing Trial Balance of Mr. Bazil prepared on Dec. 31, 2003.
Debit Balances Credit Balances
Cash 48,000 Accounts Payable 22,700
Account Receivable 140,000 Sales 340,000
Merchandise Inventory (01/0/03) 70,000 Purchase return 10,000
Office supplies 5,000 Bazil Capital 150,000
Furniture 50,000

Purchases 200,000
Salaries expenses 3,500
Prepaid insurance 2,000
Rent expenses 4,200

Total 522,700 Total 522,700

Data for Adjustments:
(i) Insurance expired by Rs.1,500.
(ii) Depreciation expenses on furniture Rs.5,000.
(iii) Salaries expenses for the year Rs.4,200.
(iv) Rent expense for the year Rs.3,500.
(v) Office supplies on hand Rs.2,000.
(vi) Merchandise inventory on Dec. 31, 2003 Rs.80,000.
Required:
(i) Prepare Income Statement for the year ended Dec. 31, 2003. 66
(ii) Prepare classified Balance Sheet as of Dec. 31, 2003.
ANSWER KEY Income Statement=Net Income=142800 Balance Sheet=316200
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211
2003R Q#7
The following balances have been taken from the pre-closing Trial Balance, prepared from the ledger of Ghulam Ali & Sons. On Dec
31, 2002:-
Debit Balances:-
Cash Rs.43,000; Accounts receivable Rs.145,000 Merchandise inventory (1-1-2002) Rs.50,000; Office salaries expense Rs.36,000;
Insurance expense Rs.21,000; Supplies Rs.6,000; Furniture Rs.30,000; Drawings R5.17,600; Purchases Rs.121,000; Total = Rs.469,600.
Credit Balances:-
Allowance for depreciation furniture Rs.6,000; Accounts payable Rs.54,000; Capital Ghulam Ali Rs.140,000; Sales Rs.233,600; Rent
revenue Rs.36,000; Total = Rs.469,600.

Supplementary data for adjustments:

(i) Goods costing Rs.2,000 taken by Ghulam All for personal use were not recorded.
(ii) Unexpired insurance Rs.7,000.
(iii) Salaries expense for the year Rs.40,000.
(iv) Merchandise inventory closing Rs.32,000.
(v) Depreciation on Furniture for the year Rs.3,000.
(vi) Office supplies unused Rs.1,700.
(vii) Unearned rent Rs.5,000.
Required:
a) Prepare Income Statement for the year ended Dec 31, 2002.
b) Prepare classified Balance Sheet as of Dec 31, 2002.
OR
Prepare Adjusting and Closing entries in journal form. 67

ANSWER KEY Income Statement=Net Income=66300 Balance Sheet=249700

 I.Com(1) Accounting PPT Slides by Sir Irfan
2003P Q#7 Cell# 0347-3643211
Given The following balances were taken from the ledger of Khurshid & Sons on Dec 31, 2002.
Cash 30000
Account Receivable 15000
Office supplies 2000
Merchandise Inventory (01/0/02) 10000
Office Furniture 8000
Accounts payable 15000
Khurshid’s capital 40500
Khurshid’s drawing 500
Sales 40000
Purchases 18000
Rent expense 5000
Advertisement expense 7000
Total 95500 95500
Adjustment data:
(i) Merchandise inventory Dec 31, 2002 Rs.7,000.
(ii) Estimate allowance for bad debts Rs.1,000.
(iii) Estimate allowance for depreciation on office furniture @ 20%.
(iv) Office supplies unused Rs.300.
(v) Accrued rent Rs.2,000.

Required:
(i) Prepare Income Statement for the year ended Dec. 31, 2002.
(ii) Prepare classified Balance Sheet as of Dec. 31, 2002. 68

ANSWER KEY Income Statement=Net Income=700 Balance Sheet=57700

 I.Com(1) Accounting PPT Slides by Sir Irfan
2002R Q#5(A) Cell# 0347-3643211

BALANCE SHEET: The following is the post-closing Trail Balance of Aslam Automobile Service.

Aslam Automobile Service

Trail Balance
As on December 31st , 2001
Cash 6500
Account Receivable 4000
Unexpired insurance 600
Office supplies 600
Testing Equipment 7200
Accumulated depreciation 100
Unearned Service Fees 3000
Accounts payable 2400
Asim Capital 10400
Salaries payable 3000
Total 18900 18900

Required:

Prepare classified Balance Sheet as of Dec. 31, 2002. 69

ANSWER KEY Balance Sheet=18800

 I.Com(1) Accounting PPT Slides by Sir Irfan
2002R Q#5(8) Cell# 0347-3643211

INCOME STATEMENT: The following closing entries were made by Raja Cloth House at the end of the current year;
December 31st 2002:-

SNO Particulars P.R Debit Credit

1- Merchandise inventory 55000
Sales 300000
Purchase return and allowances 2400
Purchase discount 3600
Income Summary 361000
2- Income Summary 361000
Merchandise inventory 42000
Sales return and allowances 2400
Sales discount 3600
Purchases 180000
Transportation-in 4800
Selling expense 48000
General & Administrative expenses 36000
Required:

Use the information in the above closing entries prepare an income statement for Raja Cloth House. 70

ANSWER KEY Income statement=Net profit=44200

 I.Com(1) Accounting PPT Slides by Sir Irfan
2002P Q#7 Cell# 0347-3643211

GIVEN: The following balances were extracted from the Ledger of Mr. Shakir on December 31, 2001, before the closing of books:

Cash Rs.8,500/-; Supplies Rs.1,000/-; Accounts receivable Rs.9,000/-; Allowance for bad debts Rs.1,500/- ; Merchandise inventory
(January,1,2001) Rs.7,000/-; Prepaid insurance Rs.600/-; Furniture Rs.5,000/-; Notes payable Rs.4,500/-; Shakir's Capital
Rs.16,600/-; Shakir-Drawings Rs.2.000/-; Sales Rs.50,000/-; Sales discount Rs.500/-; Purchases Rs.30,000/-; Salaries expense
Rs.8,000/-; Rent expense Rs.6,000/-; Commission earned Rs.5,000/-.

Supplementary data for adjustments on December 31, 2001:

(i) Unpaid salaries Rs.3,000/-.

(ii) Prepaid rent Rs.1,000/-.
(iii) Unused sales supplies Rs.400/-.
(iv) Insurance was prepaid to the extent of Rs.200/-.
(v) Commission earned Rs.4,000/-.
(vi) Merchandise Inventory was valued on December 31, 2001 , at Rs.6,000/-.

Required:
Prepare:
a) Income Statement for the year ended December 31, 2001, and
b) Balance Sheet as on December 31, 2001.
OR
c) Prepare Adjusting and closing entries. 71

ANSWER KEY Income Statement=Net Income=5500 Balance Sheet=28600

 I.Com(1) Accounting PPT Slides by Sir Irfan
2001RP Q#3 Cell# 0347-3643211

GIVEN:
The following balances were extracted from the ledger of a vegetable seller on March 31, 2001.

Cash Rs.2,000; Accounts receivable Rs.4,000; Rent security deposit Rs.6,000; Equipment Rs.2,000; Accounts payable R5.3,000;
Malik Capital Rs. ?; Sales Rs.35,000; Purchases Rs.19,000; Salaries expense Rs.6,000; Rent expense Rs.3,000; Miscellaneous
expense Rs.1,500; Cartage-in Rs.500.

Required:

(i) Determine Malik Capital.

(ii) Prepare Income Statement for 3 month, ended March 31, 2001.

(iii) Balance Sheet as of March 31, 2001.

72

ANSWER KEY Capital=6000 Income Statement=5000 Balance Sheet=14000

 I.Com(1) Accounting PPT Slides by Sir Irfan
2001RP Q#7 Cell# 0347-3643211

GIVEN: The following balances are extracted from the ledger of a sole trader on December 31, 2000.

Unearned rent Rs.9,000; Commission earned Rs.12,000; Office supplies expense Rs,2,000; Advertising expense Rs.10,000;
Salaries expense Rs.18,000.

The following data for correction of errors and adjustments are available before closing the books:

a) Accrued commission income amounting to Rs.500 was overlooked.

b) Purchase of supplies for Rs.235 cash was recorded and posted as Rs.253.
c) Printing of stationary for office use for Rs.500 was recorded as advertising expense.
d) Rent earned during the period amounted to Rs.6,000.
e) Unearned commission at year end Rs.3,000.
f) Unused office supplies amounted to Rs.500.
g) Prepaid advertising at year end Rs.3,000.
h) Prepaid salaries on December 31, 2000 is Rs.2,000.

Required:
Prepare correcting and adjusting entries in proper form.

73
 I.Com(1) Accounting PPT Slides by Sir Irfan
2000RP Q#6 Cell# 0347-3643211

GIVEN: The following were taken from the ledgers of CHAIN STORE on December 31, 1999:

Debit Balances Credit Balances

Cash 5000 Allowance for bad debts 500
Account Receivable 12000 Allowance for depreciation-Building 10000
12% Note receivable 6000 Allowance for depreciation-Equipment 4000
Accrued interest on notes receivable 360 Accounts payable 8000
Building 50000 10% Note payable 10000

Equipment 40000 Accrued interest on notes payable 500

Prepaid expenses 800 Accrued salaries expense 800
Merchandise inventory 15000 Unearned revenue 600
Mortgage payable 15000
Long term loan 10000
Tahir capital ?

Required:

a) Prepare a classified Balance Sheet as of December 31, 1999.

b) Pass an opening entry in General Journal on January 1, 2000.
74

ANSWER KEY Balance sheet=Rs.114660

 I.Com(1) Accounting PPT Slides by Sir Irfan
1999RP Q#5 Cell# 0347-3643211

The following balances were extracted from the books of Yasin Brothers for the financial year ending December 31, 1998:-

Cash Rs.49,194; Accounts receivable Rs.15,360; Merchandise inventory (opening) Rs.24,400; Sales equipment Rs.20,780;
Purchases Rs.93,800; Salaries expense Rs.18,000; Advertising expense Rs.10,000; Insurance expense Rs.6,000; Sales discount
Rs.3,198; Sales revenue Rs.230,000; Purchase return Rs.3,200; Accounts payable Rs.17,695; Commission income Rs.2,000; Capital
Yasin Rs.85,312; Yasin —Drawings Rs.6,475; Land Rs.82,000; Building rental expense Rs.9,000.

Supplementary data for Adjustment:

(i) Accrued salary Rs.5,000.

(ii) Prepaid advertising Rs.4,000.
(iii) Merchandise inventory (closing) Rs.18,000.
(iv) Commission income receivable Rs.4,300.
(v) Depreciation on fixed asset @ 20%.
(vi) Allowance for bad debts @ 5% of accounts receivable.

Required:
a) Prepare Income Statement for the year ending December 31. 1998.
b) Prepare a classified Balance Sheet.

75

ANSWER KEY Income Statement=Net Income=87178 Balance Sheet=188710

 I.Com(1) Accounting PPT Slides by Sir Irfan
1998RP Q#6 Cell# 0347-3643211

Kathiawar General Store has given the following data for the year ended on March 31, 1998:-

Merchandise inventory April 1, last year Rs.26,000

Merchandise inventory March 31, current year Rs.18,000.
Store supplies consumed Rs.6,800.
Purchases and transporting Rs.172,000.
Sales Rs.300,000.
Purchase returns Rs.12,000.
Sales returns Rs.10,000.
Commission revenue Rs.15,000.
Sales salaries expense Rs.20,000.
Office salaries expense Rs.16,000.

Required:
Prepare necessary closing entries of the above information giving proper indentation and narration.

76

ANSWER KEY Net Profit=Rs.94200

 I.Com(1) Accounting PPT Slides by Sir Irfan
1998RP Q#7 Cell# 0347-3643211

GIVEN: The following have been taken from the pre-closing Trial Balance prepared from the ledger of Anwar & Sons on
December 31, 1997:-

Debit Balance:
Cash Rs.21,000; Accounts receivable Rs.33,000; Merchandise inventory (1.1.1997) Rs.12,000; Sales equipment Rs.27,000;
Prepaid office rent Rs.9,000; Anwar & Sons drawings Rs.3,000; Sales returns & allowances Rs.3,000; Purchases Rs.66,000;
Transportation in Rs.6,000; Office salaries expense Rs.18,000; Sales salaries expenses Rs.24,000.

Credit Balances:
Accounts payable Rs.24,000; Sales Rs.120,000; Purchase returns and allowances Rs.4,500; Purchase discount Rs.5,400; Allowance
for bad debts Rs.6,000; Allowance for depreciation on sales equipment Rs.9,000; Anwar & Sons Capital Rs.53,100.

Data for adjustment and correction on December 31.1997:

(i) Office salaries expense outstanding Rs.5,000.
(ii) Sales salaries were prepaid to the extent of Rs.1,400.
(iii) Merchandise inventory on December 31, 1997, was valued at Rs.25,000.
(iv) Provide depreciation on equipment Rs.2,500.
(v) Prepaid office rent expired Rs.4,000.
(vi) Increase allowance for bad debts by Rs.2,000.

Required:
a) Prepare INCOME STATEMENT for the period ended on December 31, 1997, grouping properly revenue and expense items.
b) Prepare Classified BALANCE SHEET as of December 31, 1997.
77

ANSWER KEY Income Statement=Net Income=13800 Balance Sheet=92900

 I.Com(1) Accounting PPT Slides by Sir Irfan
1997RP Q#8(A&B) Cell# 0347-3643211

8(A) INCOME STATEMENT:

The following balances have been taken from the ledger of Zahid and Co. on December 31, 1996, the close of their financial year:-
Merchandise inventory January 1,1996 Rs.6,000; Purchases Rs.39,000; Freight Rs.2,000; merchandise inventory December 31,
1996 Rs.10,000; Office supplies expense Rs.1,400; Rent expense Rs.200; Salaries expense Rs.1,600; General expense Rs.1,500;
Sales Rs.70,000.
Required:
Prepare classified Income Statement for the year ended December 31, 1996.

8(B) BALANCE SHEET:

On December 31, 1996, the ledger accounts of Waseem Traders showed the following balances:
Cash Rs.3700 Merchandise inventory 7500
Accounts receivable 4000 Shop Furniture 7000
Prepaid rent 4600 Office Equipment 3500
Building 44000 Bank Loan 10000
Office Furniture 4000 Capital ?
Accounts payable 5500 Drawings 4500
Bank 8500 Net Income 35700
Notes receivable 5000

Required:
78
Prepare classified report form balance Sheet.

ANSWER KEY 8(A)Income statement=Net income Rs.28300 8(B)Balance Sheet=91800

 I.Com(1) Accounting PPT Slides by Sir Irfan
1996RP Q#6 Cell# 0347-3643211

GIVEN:
Balances taken from the ledger of Shahji, a sole trader on June 30, 1995 before adjustments, were as follows:-
Cash Rs.3,600; Accounts receivable Rs.4,800; Merchandise inventory (1.7.94) Rs.2,400; Insurance expense Rs.900; Office
equipment Rs.1,800; Allowance for bad debts Rs.240; Accounts payable Rs.3,600; Shahji Capital Rs.9,480; Sales revenue
Rs.12,000; Sales discount Rs.120; Purchases Rs.6,000; Carriage-in Rs.480; Purchase discount Rs.180; Prepaid shop rent Rs.2,400;
Salaries expense Rs.4,200; Commission Income Rs.1,200.
Supplementary data for adjustments on 30.6.1995
(i) Salaries payable Rs.600.
(ii) Commission receivable Rs.132.
(iii) Taxes payable Rs.60.
(iv) Insurance unexpired Rs.180.
(v) Shop rent prepaid Rs.1,800.
(vi) Allowance for bad debts was estimated at Rs.540.
(vii) Allowance for depreciation on office equipment was estimated Rs.180.
(viii) Merchandise inventory was valued at Rs.3,600 on 30.6.1995.

Required:
a) Prepare INCOME STATEMENT for the period ended June 30, 1995, (Group expense and revenue data)
79
b) Prepare Classified BALANCE SHEET as on June 30, 1995.

ANSWER KEY Income Statement=Net Income=1452 Balance Sheet=15192

 I.Com(1) Accounting PPT Slides by Sir Irfan
1995RP Q#5 Cell# 0347-3643211
GIVEN: The following balances have been taken from the pre-closing Trail balance prepared from the ledger of Sherdil Traders
on December 31, 1994:-
Debit Balances:
Cash Rs.21,000; Accounts receivable Rs.33.000; Merchandise inventory (1.1.94) Rs.12,000; Sales equipment Rs.27,000; Prepaid office rent
Rs.9,000; Sherdil Drawings Rs.3,000; Sales returns and allowances Rs.3,000; Purchases Rs.66,000; Transportation in Rs.6,000; Office salaries
expense Rs.18,000; Sales salaries expense Rs.24,000.

Credit Balances:
Accounts payable Rs.24,000; Sales Rs.120,000; Purchase returns and allowances Rs.4,500; Purchase discount Rs.5,400; Allowance for bad debts
Rs.6,000; Allowance for depreciation on sales equipment Rs.9,000; Sherdil Capital Rs.53,100.
Data for adjustment and correction on December 31, 1994:
(i) Office salaries expense outstanding Rs.3,000.
(ii) Sales salaries were prepaid to the extent of Rs.2,400.
(iii) Merchandise inventory on December 31, 1994 was valued at Rs.24,000.
(iv) Provide depreciation on sales equipment for the year Rs.4,500.
(v) Prepaid office rent expired Rs.3,000.
(vi) Increase allowance for bad debts by Rs.1,800.
(vii) An item of sales salaries of Rs.2,000 was wrongly debited to office salaries expense account.
(viii) An item office salaries expense of Rs.1,000 was wrongly debited to sales salaries expense.
(ix) Defective goods worth Rs.500 returned by a customer were wrongly debited to purchase account.
(x) An item of repairs of sales equipment of Rs.500 was wrongly debited to sales equipment account.
(xi) Drawing of Rs.500 for personal use of Sherdil was wrongly debited to office salaries expense.
(xii) An item of purchase returns of Rs.1,000 was wrongly credited to sales account.

Required:
a) Prepare INCOME STATEMENT for the year ended on December 31, 1994, grouping properly revenue and expense items. 80
b) Prepare classified BALANCE SHEET as of December 31, 1994.

ANSWER KEY Income Statement=Net Income=15000 Balance Sheet=91600

 I.Com(1) Accounting PPT Slides by Sir Irfan
1994RP Q#4 Cell# 0347-3643211
The following are unadjusted balances taken from the books of Mr. Riaz on May 31, 1994:

Account title Debit Credit

Cash 6000
Accounts receivable 12000
Merchandise inventory (opening) 11000
Prepaid insurance 6000
Office Equipment 50000
Allowances for depreciation-Office Equipment 10000
Accounts payable 8000
Riaz Capital 59000
Riaz Drawing 8000
Sales revenue 85000
Sales return 3000
Sales discount 2000
Purchases 45000
Purchase revenue 3000
Purchase return 4000
Transportation-in 5000
Advertising expense 9000
Delivery expense 2000
81
Office salaries expense 10000
Total 169000 169000
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211

Supplementary data for adjustments on May 31, 1994:

(i) Make allowance for doubtful accounts at 10% of accounts receivable at year-end.
(ii) Insurance was paid in advance for 10 months on March 1, 1994.
(iii) Make allowance for depreciation on office equipment at 10% of the cost.
(iv) Advertising prepaid was Rs.1,500.
(v) Unpaid office salaries was Rs.2,500.
(vi) An item of transportation in of Rs.600 was wrongly charged to purchases.
(vii) An item of delivery expense of Rs.300 was wrongly debited to transportation in account.
(viii) Merchandise inventory on May 31, 1994 was valued at Rs.16,000
Required:
a) Prepare INCOME STATEMENT for the year ended May 31, 1994.
b) Prepare classified BALANCE SHEET as of May 31, 1994.
c) Prepare adjusting and closing entries.

82
ANSWER Income Statement=Net Income=12000 Balance Sheet=73500 Insurance expense = (6000 X 3/10 = 1800)
KEY/HINT
 I.Com(1) Accounting PPT Slides by Sir Irfan
1993RP Q#4 Cell# 0347-3643211
The following balances have been taken from the pre-closing trial balance prepared from the ledger of Edi jii Traders on
December 31, 1992:-
Debit Balances:
Cash Rs.6,000; Accounts receivable Rs.10,000; Merchandise inventory (1.1.1992) Rs.4,500; Prepaid office rent Rs.2,000; Sales
equipment Rs.8,500; Edi jii drawings Rs.1,000; Sales returns & allowances Rs.800; Purchases Rs.20,000; Transportation In
Rs.2,000; Office salaries expense Rs.5,000; Sales salaries expenses Rs.6,000.
Credit Balances
Allowance for bad debts Rs.1,500; Allowance for depreciation on sales equipment Rs.2,500; Accounts payable Rs.6,500; Edi jii
capital Rs.12,300; Sales Rs.40,000; Purchase returns & allowances Rs.1,400; Purchase discount Rs.1,600.
Data for Adjustment on December 31. 1992:
(i) Increase allowance for bad debts by Rs.500.
(ii) Prepaid office rent expired Rs.800.
(iii) Provide depreciation on sales equipment for the year Rs.1,000.
(iv) Office salaries expense outstanding Rs.900.
(v) Sales salaries were prepaid to the extent of Rs.800.
(vi) Merchandise inventory on December 31, 1992 was valued at Rs.6,200.
(vii) A purchase of merchandise of Rs.500 was wrongly charged to sales Equipment account.
(viii) Salary to a sales person for the last week of December Rs.400 was paid by the owner from business cash, which was
mistakenly debited to his Drawing account.
Required:
a) Prepare INCOME STATEMENT for the period ended on December 31, 1992, grouping properly revenues and expenses.
83
b) Prepare Classified BALANCE SHEET as of December 31, 1992.

ANSWER KEY Income Statement=Net Income=7600 Balance Sheet=26700

 I.Com(1) Accounting PPT Slides by Sir Irfan
1992RP Q#6 Cell# 0347-3643211
ADJUSTING AND REVERSING ENTRIES
GIVEN: The following is the Pre-Closing Trial Balance (partial) of Ahmad Company on December 31, 1991, end of the accounting year:
Title of Account Debit Credit
Account Receivable 15000
Allowances for doubtful accounts 500
Prepaid rent 8000
Office Equipment-Cost 30000
Allowances for depreciation-Office Equipment 6000
Unearned commission 9000
Consulting fee income 16000
Salaries expense 17500
Office supplies expense 5500

Data for adjustments on December 31. 1991:

(i) Increase the allowance for doubtful accounts to 10% of the accounts receivable.
(ii) Prepaid rent is rent for 8 months paid on July 1, 1991.
(iii) 10% of the cost of office equipment is depreciated annually.
(iv) Commission still unearned amounted to Rs.2,500.
(v) The consulting fees income, Rs.2,000 is still unearned.
(vi) Salaries expense includes salaries paid for January 1992 Rs.1,500.
(vii) Office supplies unused amounted to Rs.500.

Required:
84
a) Give adjusting entries In General Journal with explanation below each.
b) Give reversing entries with explanation. (Note: Show all your computations. They carry marks).
 I.Com(1) Accounting PPT Slides by Sir Irfan
1992RP Q#7 Cell# 0347-3643211

GIVEN: Balance taken from the ledger of Haji Tabba, a sole trader, on June 30, 1992 before adjustments were as follows:

Debit Balances:
Cash Rs.1,800; Accounts receivable Rs.2,850; Merchandise inventory (1.7.91) Rs.1,200; Office equipment Rs.900; Purchases
Rs.3,000; Prepaid shop rent Rs.1,200; Carriage in Rs.225; Salaries expense Rs.2,100; Insurance expense Rs.450; Sales discount Rs.75.
Credit Balances:
Accounts payable Rs.2,250; Haji Tabba capital Rs.4,725; sales revenue Rs.6,000; Purchase discount Rs.105; Commission income
Rs.600; Allowance for bad debts Rs.120.

Supplementary data for adjustments on June 30, 1992:

(i) Salaries payable Rs.285.
(ii) Taxes payable Rs.39.
(iii) Shop rent prepaid Rs.375.
(iv) Insurance unexpired Rs.90.
(v) Commission receivable Rs.66.
(vi) Merchandise inventory was valued at Rs.1,950 on June 30. 1992.
(vii) Allowance for bad debts was estimated at Rs.270.
(viii) Allowance for depreciation on office equipment was estimated at Rs.90.

Required:
a) Prepare Income Statement for the year ended June 30, 1992. (Group the expense and revenue data properly and give the
complete title to the statement).
b) Prepare Balance Sheet as of June 30, 1992 in classified form, giving complete title. (Note: You may prepare the two financial
statements either in account form or report form). 85

ANSWER KEY Income Statement=Net Income=372 Balance Sheet=7671

 I.Com(1) Accounting PPT Slides by Sir Irfan
1991RP Q#6 Cell# 0347-3643211
GIVEN: The following is the Pre-Closing Trial Balance of Kamran & Co. prepared on December 31,1990:
Debit Balances Credit Balances
Cash 10000 Sales 75000
Merchandise inventory (1.1.90) 8000 Purchase returns 500
Office equipment 30000 Kamran Capital 60000
Purchases 52000 Allowance for depreciation-Office equipment 2500
Salaries expense 5500 Accounts payable 17000
Rent expense 5000
Office supplies 500
Insurance prepaid 1200
Accounts receivable 20000
Sales returns 500
Furniture 17300
Kamran Drawings 5000
Total 155000 Total 155000
Data for adjustments on December 31. 1990:
Required:
(i) Merchandise inventory was valued at Rs.10,000.
a) Prepare Income Statement in classified report form for the year ended
(ii) Salaries Payable Rs.500.
December 31, 1990.
(iii) Accrued rent Rs.1,000.
b) b) Prepare Balance Sheet in classified account form as of December 31, 1990.
(iv) Office supplies unused Rs.200.
(v) Insurance expired Rs.800.
(vi) Depreciation on office equipment was estimated at Rs.2,500. 86

ANSWER KEY Income Statement=Net Income=9400 Balance Sheet=82900

 I.Com(1) Accounting PPT Slides by Sir Irfan
1990RP Q#4 Cell# 0347-3643211

GIVEN: The following have been taken from the adjusted Trail Balance of Al-Mukhtar and company prepared on December 31,1990:
Debit Balances Credit Balances
Cash 600 Allowance for depreciation-Furniture 4000
Accounts receivable 1500 Accounts payable 1400
Merchandise inventory 6000 Salaries payable 300
Store supplies 300 Rent payable 200
Prepaid advertising 4000 Advance from customers 2300
Furniture 10000 Mukhtar-Capital 10000
Cost of goods sold 80000 Sales revenue 91600
Sales salaries 4000
Office rent expense 1200
Advertising expense 1000
Store supplies expense 200
Depreciation expense 1000

Required:

a) Prepare Income Statement in classified report form for the year ended December 31, 1989.(Properly grouping revenue and expenses data).
b) Prepare Balance Sheet in classified account form as of December 31, 1989.

87

ANSWER KEY Income Statement=Net Income=4200 Balance Sheet=18400

 I.Com(1) Accounting PPT Slides by Sir Irfan
1990RP Q#7 Cell# 0347-3643211

GIVEN: The following is the Pre-Closing Trial Balance of Maqsood & Co. prepared on December 31,1989:
Debit Balances Credit Balances
Cash 700 Allowance for depreciation-Furniture 250
Office supplies 200 Maqsood-Capital 3000
Prepaid advertising 2000 Commission income 6650
Furniture 5000
Salaries expense 1000
Rent expense 1000
Total 9900 Total 9900

Data for Adjustment:

1. Office supplies in hand Rs.50.
2. Advertising expired Rs.1,500.
3. Outstanding salaries Rs.300.
4. Actual rent expense for the year Rs.800.
5. Commission received but not yet earned Rs.400.
6. Commission earned but not yet received Rs.100.
7. Current year depreciation on furniture Rs.750.

Required:
a) Adjusting Journal Entries on December 31, 1989.
88
b) Adjusted Trial Balance on December 31, 1989.
c) Reversing Entries in General Journal on January 1, 1990.
 I.Com(1) Accounting PPT Slides by Sir Irfan
Maqsood and Co. Cell# 0347-3643211

Adjusting entries
S.No Particulars P.R Debit Credit
1- Office supplies 150
Office supplies expense 150
[To adjust office supplies]
2- Advertising expense 1500
Prepaid advertising 1500
[To adjust the prepaid advertising]
3- Salaries expense 300
Salaries payable 300
[To adjust the unpaid salaries]
4- Prepaid rent 200
Rent expense 200
[ To adjust the rent expense]
5- Commission income 400
Unearned commission 400
[To record the commission income]
6- Commission receivable 100
Commission income 100
[To record the accrued commission]
7- Depreciation expense 750 89

Allowances for depreciation - Furniture 750

[To record the depreciation expense on Furniture]
 I.Com(1) Accounting PPT Slides by Sir Irfan
Maqsood and Co. Cell# 0347-3643211
Adjusted Trail Balance
For the period ended December 31st 1989
Title of Account Trail Balance Trail Balance Adjusted Trail
Adjustment Balance
Debit Credit Debit Credit Debit Credit
Cash 700 700
Office supplies 200 150 350
Prepaid advertising 2000 1500 500
Furniture 5000 5000
Salaries expense 1000 300 1300
Rent expense 1000 1000
Allowance for depreciation-Furniture 250 750 1000
Maqsood-Capital 3000 3000
Commission income 6650 400 100 6350
Office supplies expense 150 150
Advertising expense 1500 1500
Salaries payable 300 300
Unearned commission 400 400
Commission receivable 100 100 90
Depreciation expense 750 750
Adjusted Trail Balance 11200 11200
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211

Maqsood and Co.

Reversing entries

S.No Particulars P.R Debit Credit

1- Salaries payable 300
Salaries expense 300
[To reverse the unpaid salaries]
2- Rent expense 200
Prepaid rent 200
[ To reverse the rent expense]
3- Unearned commission 400
Commission income 400
[To reversed the commission income]
4- Commission income 100
Commission receivable 100
[To record the accrued commission]

91
 ACCOUNTMICS I.Com(1) Accounting PPT Slides by Sir Irfan
BOOKLET QUESTIONS BY SIR IRFAN Cell# 0347-3643211
GIVEN: The following balances were taken from the General Ledger of Mr. Saleem, a sole proprietor on September 30, 2022
Cash 12,250
Notes receivable 3,000
Accounts receivable 5,300
Allowance for bad debts (Cr.) 100
Merchandise inventory 20,180
Store supplies 540
Building 50,000
Accumulated depreciation — Building 20,000
Accounts payable 8,720
Notes payable 5,000
Saleem, Capital 40,000
Sales revenue 95,000
Interest revenue 200
Cost of goods sold 57,900
Salaries expense 7,500
General expense 10,900
Interest expense 700
Property tax expense 750
The data for adjustments to be made at year ended December 31. 2022 are:
(i) Store supplies on hand Rs.310. Required:
(ii) Property tax paid in advance Rs.145.
(iii) Accrued interest on notes receivable Rs.212. a) Prepare Income Statement for the year ended 31.12.2022.
(iv) Accrued interest on notes payable Rs.150. b) Prepare classified Balance Sheet on 31.12.2022. 92
(v) Adjust the allowance for bad debts account to 5% of accounts receivable.
(vi) The building has a depreciation expense Rs.1,000 per Anum.
(Hint: Depreciation will be calculated only for two months)
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211

FINANCIAL STATEMENT
QUESTIONS RELATED TO SERVICES
BOOKLET QUESTION
(BY SIR IRFAN)

93
 I.Com(1) Accounting PPT Slides by Sir Irfan
ACCOUNTMICS Cell# 0347-3643211

BOOKLET QUESTIONS BY SIR IRFAN

GIVEN: The following are trail balance and adjustment data for Aslam Company on December 31,2021:
Debit Balances Credit Balances
Cash 5000 Capital 150000
Bank 30000 Salaries payable 5000
Office Equipment 25000 Commission revenue 40000
Office Furniture 15000 Unearned commission 10000
Prepaid advertisement 7000 Allowances for depreciation – O/E 1000
Office salaries expenses 15000 Allowances for depreciation – O/F 3000
Commission receivable 5000
Office supplies 7000
Investments 100000
Total 209000 Total 209000
Data for Adjustment on December 31, 2021:

(i) Service provided against Unearned Commission Rs.7000.

(ii) Commission receivable Rs.8000.
(iii) Commission revenue includes an amount of Rs.1000 advance payment by a customer.
(iv) Advertisement expense Rs.5000.
(v) Unused office supplies Rs.2000
(vi) Interest on investment receivable Rs.5000
(vii) Depreciation expense on Office Equipment Rs.2400 and Office Furniture Rs.1200

Required:
94
1) Prepare Income Statement for the year ended on December 31, 2021.
2) Prepare Balance Sheet as on December 31, 2021.
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211

Aslam Company
Income Statement
For the period ended December 31st, 2021

Commission income (40000+7000+8000+5000) 60000

Less: Unearned Commission (10000+1000) (11000)
Total commission income 49000
Add: Interest income 5000
Total revenues 54000

Less: OPERATING EXPENSES:

Advertising expense 5000
Office salaries expense 15000
Office supplies expense 5000
Depreciation expense – Office Equipment 2400
Depreciation expense – Office Furniture 1200
Total operating expense (28600)
Adjusted Net Income 25400

95
 I.Com(1) Accounting PPT Slides by Sir Irfan
Aslam and Company Cell# 0347-3643211
Balance Sheet
As on December 31st, 2021
ASSETS Amount Amount EQUITIES Amount Amount
Current Assets: Liabilities:
Cash 5000 Salaries payable 5000
Bank 30000 Unearned commission 4000
Prepaid advertisement 2000 Total liabilities 9000
Commission receivable 8000
Office supplies 2000
Interest receivable 5000
Total current assets 52000

Non-current Assets:
Investment 100000 Owner’s equity:
Office equipment 25000 Capital 150000
Less: Allowances for depreciation (3400) 21600 Add: Net income 25400
Office Furniture 15000 Total owner’s equity 175400
Less: Allowances for depreciation (4200) 10800
Total non-current assets 132400 96
Total Assets 184400 Total Equities 184400
 I.Com(1) Accounting PPT Slides by Sir Irfan
ACCOUNTMICS Cell# 0347-3643211

BOOKLET QUESTIONS BY SIR IRFAN

GIVEN: The following are trail balance and adjustment data for Mehfooz and Company on December 31,2021:
Debit Balances Credit Balances
Cash 70000 Allowances for depreciation - Aircraft 12000
Accounts receivable 24000 Accounts payable 18000
Aircraft 1200000 Bank Loan 25000
Maintenance and overhaul 33000 Capital 1000000
Passenger services 15000 Revenue from passenger 260000
Aircraft fuel 26000 Revenue from cargo 85000
Salaries expense 32000

Total 209000 Total 209000

Additional Information:

(i) Salaries accrued Rs.3,000 and prepaid salaries for Rs.5,000.

(ii) Bad debts estimated at 10% of accounts receivable.
(iii) Interest on bank loan Rs.5,000 outstanding.
(iv) Unearned revenue from cargo Rs.10,000 and earned receivable Rs.7,000.
(v) Proprietor withdrew cash from the business Rs.5,000 for private use.
(vi) Book value of Aircraft was estimated at Rs.1,176,000.
Required:
1) Prepare Income Statement for the year ended on December 31, 2021.
97
2) Prepare Balance Sheet as on December 31, 2021.

ANSWER KEY Net Income=Rs.118600

 I.Com(1) Accounting PPT Slides by Sir Irfan
ACCOUNTMICS Cell# 0347-3643211

BOOKLET QUESTIONS BY SIR IRFAN

GIVEN: The following are trail balance and adjustment data for Irfan and Company on December 31,2021:

Cash 75000
Office supplies 9000
Prepaid rent 36000
Unearned commission 27000
Irfan - capital 76000
Commission earned 83000
Salaries expense 66000
Additional Information:
1) Office supplies used during the year Rs.6000.
2) Unearned commission was nil.
3) Commission earned during the year Rs.120000.
4) Prepaid salaries amounted Rs.10000.
5) Salaries expense for the year Rs.60000.
6) Rent expense for the year Rs.30000.
Required:
1) Prepare Income Statement for the year ended on December 31, 2021.
98
2) Prepare Balance Sheet as on December 31, 2021.

ANSWER KEY Net Income=Rs.24000

 I.Com(1) Accounting PPT Slides by Sir Irfan
ACCOUNTMICS Cell# 0347-3643211

BOOKLET QUESTIONS BY SIR IRFAN

GIVEN The pre-closing trial balance of Nadir & Company on December 31, 2022 is as under:

Debit Balances:
Cash Rs.1,200; Office supplies Rs.800; Prepaid advertising Rs.6,000; Rent expense Rs.3,000; Furniture Rs.10,000; Salaries expense
Rs.5,000. (Total Rs.26,000).

Credit Balances:
Allowance for depreciation Rs.2,000; Nadir Capital Rs.10,000; Commission income Rs.14,000. (Total Rs.26,000).

Data for Adjustment on December 31, 2022:

(i) Office supplies on hand Rs.500.
(ii) Advertising cost unexpired Rs.2,000.
(iii) Current year depreciation on furniture 20% on cost.
(iv) Prepaid salaries Rs.800.
(v) Actual rent expense for the year Rs.3,600.
(vi) Commission receivable Rs.300 and unearned commission Rs.700.

Required:
1) Prepare Income Statement for the year ended on December 31, 2022.
2) Prepare Balance Sheet as on December 31, 2022.
99

ANSWER KEY Net Loss=Rs.500

 I.Com(1) Accounting PPT Slides by Sir Irfan
ACCOUNTMICS Cell# 0347-3643211

BOOKLET QUESTIONS BY SIR IRFAN

GIVEN: Unadjusted trial balance of Waseem, a chartered accountant, on June, 30, 2022 is as under:-
Cash 100000
Accounts receivable 500000
Prepaid advertising 40000
Office supplies 10000
Office equipment 300000
Waseem's Capital 662000
Waseem's Drawings 5000
Consulting fees 400000
Salaries expense 31000
Rent expense 60000
Insurance expense 10000
Repairs expense 6000
1062000 1062000
Data for Adjustment on June 30, 2022:

(i) Supplies on hand at the end of the period Rs.2,000.

(ii) Unexpired rent amounted to Rs.20,000.
(iii) Salaries of Rs.4,000 are payable.
(iv) Consulting fees still unearned amounted to Rs.15,000.
(v) The office equipment depreciation is estimated of Rs.30,000.
(vi) Advertising expense for the year amounted to Rs.35,000.
100
Required:
1) Prepare Income Statement for the year ended on June 30, 2022.
2) Prepare Balance Sheet as on June 30, 2022.
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211

Mr. Waseem
Income Statement
For the period ended June 30th, 2022

Consulting fees 400000

Less: Unearned Consulting fees (15000)
Total Consulting fees 385000

Less: OPERATING EXPENSES

Office supplies expense 8000
Rent expense 40000
Salaries expense 35000
Insurance expense 10000
Depreciation expense (Office Equipment) 30000
Advertising expense 35000
Repairs expense 6000
Total operating expenses (164000)
Adjusted Net Income 221000

101
 I.Com(1) Accounting PPT Slides by Sir Irfan
Mr. Waseem Cell# 0347-3643211
Balance Sheet
As on June 30th, 2022
ASSETS Amount Amount EQUITIES Amount Amount
Current Assets: Liabilities:
Cash 100000 Salaries payable 4000
Accounts receivable 500000 Unearned Consulting fees 15000
Prepaid advertising 5000 19000
Office supplies 2000
Unexpired rent 20000
627000

Non-current Assets: Owner’s equity:

Office Equipment 300000 Capital Waseem 662000
Less: Allowances for depreciation (30000) Less: Drawing (5000)
270000 657000
Add: Net Income 221000
878000
Total Assets 897000 Total Equities 897000
102
 I.Com(1) Accounting PPT Slides by Sir Irfan
ACCOUNTMICS Cell# 0347-3643211

BOOKLET QUESTIONS BY SIR IRFAN

GIVEN: Unadjusted trial balance of Rehan and Company, on December, 31, 2022 is as under:-
Cash 20000
Accounts receivable 60000
Office supplies 5000
Office equipment 60000
Allowances for depreciation - Office equipment 6000
Accounts payable 20000
Rehan's Capital 95000
Rehan's Drawings 15000
Commission income 90000
Salaries expense 31000
Rent expense 20000
Total 211000 211000

Data for Year-End Adjustments:

i. Office supplies unused Rs.2,000.

ii. Unpaid salaries Rs.4,000
iii. Actual rent for the year was Rs.18,000.
iv. Commission earned Rs.80,000.
v. Commission receivable Rs.7.000.
vi. Salaries paid to the office assistant of Rs.5,000 was wrongly charged to the drawings account.
vii. Depreciation was estimated on Office Equipment Rs.5400.

Required: 103
1) Prepare Income Statement for the year ended on December 31, 2022.
2) Prepare Balance Sheet as on December 31, 2022.
 I.Com(1) Accounting PPT Slides by Sir Irfan
Cell# 0347-3643211

Rehan and Company

Income Statement
For the period ended December 31st, 2022

Commission income 90000

Less: Unearned Commission (10000)
Add: Accrued Commission 7000
Total commission income 87000

Less: OPERATING EXPENSES:

Office supplies expense 3000
Salaries expense (31000+4000+5000=40000) 40000
Rent expense 18000
Depreciation expense – Office Equipment 5400
Total operating expense (66400)
Adjusted Net Income 20600

104
 I.Com(1) Accounting PPT Slides by Sir Irfan
Rehan and Company Cell# 0347-3643211
Balance Sheet
As on December 31st, 2022

ASSETS Amount Amount EQUITIES Amount Amount

Current Assets: Liabilities:
Cash 20000 Accounts payable 20000
Accounts receivable 60000 Salaries payable 4000
Office supplies 2000 Unearned commission 10000
Prepaid rent 2000 Total liabilities 34000
Commission receivable 7000
Total current assets 91000

Non-current Assets: Owner’s equity:

Office equipment 60000 Capital 95000
Less: Allowances for depreciation (11400) Less: Drawing (15000+5000) (20000)
Total non current assets 48600 85000
Add: Net income 20600
Total owner’s equity 105600
105
Total Assets 897000 Total Equities 139600
 I.Com(1) Accounting PPT Slides by Sir Irfan
ACCOUNTMICS Cell# 0347-3643211

BOOKLET QUESTIONS BY SIR IRFAN

GIVEN: The following are the unadjusted balances taken from the books of Mobeen & Company on Dec. 31, 2022:

Debit (Rupees):
Cash Rs 26,000; Supplies Rs.14,000; Accounts receivable Rs.24,000; Equipment Rs.36,000; Salaries expense Rs.20.000 and
Advertising expense Rs.16.000.

Credit (Rupees):
Accounts payable Rs.5,000; Accumulated depreciation (Equip) Rs.5,000; Mobeen Capital Rs.56,000 and Commission income
Rs.70,000.
Balance Day Data: (31.12.22):
(i) Unearned commission Rs.5,000.
(ii) Depreciation expense was estimated at Rs.6,000.
(iii) Unrecorded utility expenses for the period Rs.7,000.
(iv) Supplies expense Rs.8,000.
(v) Commission accrued Rs.9,000.
(vi) Advertising expense for the period is 20%.

Required: Prepare dated:

(a) Adjusting / correcting entries.
(b) Reversing entries.
106