ADDIS ABABA UNIVERSITY SCHOOL OF COMMERCE

DEPARTMENT OF ACCOUNTING AND F INANCE

PRINCIPLES OF ACCOUNTING I
AcFN 2161

ASSIGNMENT I
FOR MARKETING STUDENTS

November, 2019

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Illustration
Alemnesh Mitiku has been operating a laundry business in her home on a part-time basis for the last

few years. On January 1, 2009 she decided to move to rented house and to devote a full time to the

business which is named as ALS. She designed an accounting system and recruited employees in the

business. The following is the chart of accounts for the new business:

Alemnesh Laundry Service

Chart of Account
Assets: Revenue:
Cash 11 Service Revenue 41
Accounts Receivable 12 Expenses:
Laundry Supply 13 Supply Expense 51
Prepaid Rent 14 Salary Expense 52
Laundry Equipment 17 Advertising Expense 53
Accumulated Depreciation 18 Rent Expense 54
Liability: Repair Expense 55
Accounts Payable 21 Utility Expense 56
Owner’s Equity: Depreciation Expense 57
Alemnesh Mitiku, Capital 31 Telephone Expense 58
Alemnesh Mitiku, Drawing 32 Miscellaneous Expense 59
Income Summary 33

The business conducted the following transactions (including initial investment made by the owner
in organizing the business in a new form) during the first month of its operation:

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 Date Transaction
2009 On the first date, the owner invested the following assets which were in her home
January1: earlier: Cash Br.15, 000; Accounts Receivable Br. 1,800; Laundry Supplies Br.
1,200; and Laundry Equipment Br. 80,000. Receipt No.001 & Others

Paid Br 7,200 advance for three month house rent (from January 1, to march 31,
1: 2009). Check No 1100
Purchased Br. 6,000 additional laundry equipment on account from Jumbo
2: Equipment Inc... Purchase Invoice No.122
Received Br.1, 200 from credit customers in payment of their account. ReceiptN0.
3: 002
Received Br. 2,800 for laundry service sales of the first three days. (From Thursday
3: to Saturday). Receipt No.003
Purchased laundry supplies of Br. 5,000 paying Br.3, 000 soon and agreeing to pay
5: the rest in the future. Check No 1101 & Purchase Invoice No. 4728
8: Paid Br. 2,500 for newspaper advertisement. Check No. 1102
Received Br. 5,200 from laundry service sales for the second week of January.
10: Receipt No. 004
Paid Br. 4,000 to Jumbo Equipment Inc. to apply on the Br. 6,000 debt owed them.
13: Check No. 1103
Sales of laundry service on account for the last 17 days totaled Br. 2,600. Sales
17: Invoice No. 0023
Received Br. 8,000 from laundry service sales for the third week of January. Receipt
17: No. 005
20: Purchased Laundry supplies of Br. 3,300 in cash. Check No. 1104
23: Paid Br. 3,500 to suppliers on account on the credit purchase of January 5. Check
No. 1105
24: Received Br. 6,500 from laundry service sales for the fourth week of January.
Receipt No. 006
27: Paid Br. 1,500 for repair service of the washing machine. Check No.1106
29: Paid Br. 4,400 employees salary for the month of January. Check No. 1107
Paid Br. 560 for electricity & Br. 400 for water bill (both are utility expenses).
30: Check No 1108 & 1109 are issued for electric and water bill respectively.
30: Paid miscellaneous expense of Br. 250. Check No 1110
Sales of laundry service on account for the last 13 days totaled Br. 2,200. Sales
31: Invoice No. 0024
31: Received Br. 7,400 from laundry service sales for the fifth week of January. Receipt
No. 007
31: Alemnesh withdrew Br. 5,000 for her personal use. Check No.1111

NB: To reduce repetition, some of the transactions are stated as a summary. For example, sales of laundry
service for cash are ordinary recorded on a daily basis, but in the illustration, summery totals are given at
the end of each week. Similarly, all sales of service on account during the month are summarized as two
transactions bi-weekly.

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Consider the following facts obtained from ALS, on January 31, 2009 for adjustment:

a) From the total laundry supplies available during the month, now only supplies of Br.
1,100 remaining at hand. (this is determined by inventory count made on January
31,2009)
b) Prepaid Rent of one month expired, because the business has already used the rented
house for one month(from January 1 up to 31,2009)
c) Expired cost of the laundry equipment for one month is Br. 860( 1 % of the cost of the
asset per month)
d) Telephone Expense of January Br. 600 is not yet paid. ALS usually receives telephone
bill of this month on the 5th of the next month.

ACTIVITIES
Based on all the information for ALS above, pe rform the following activities:
Activity 1: Journalize all the transactions of January in two-column general journal

Activity 2: Open four-column ledge r accounts of ALs based on the chart of account and post
each items from the journal to the respective ledger account you opened

Activity 3: Prepare Trial-Balance (Unadjusted trial balance) as of January 31, 2009

Activity 4: Prepare Worksheet as of January 31, 2009 end of one month fiscal period

Activity 5: Prepare Financial Statements as of January 31, 2009 end of one month fiscal period

Activity 6: Journalize and post both adjusting and closing entries as of January 31,2009

Activity 7: Prepare post-closing Trial-Balance as of January 31, 2009

NB: All the formats necessary for these activities are provided in the next 11 pages

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 GENERAL JOURNAL PAGE:________
DATE ACCOUNT TITLE P/R DEBIT CREDIT

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 GENERAL JOURNAL PAGE:________
DATE ACCOUNT TITLE P/R DEBIT CREDIT

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Account Title:_____________________________ Account No.:___________
P/R Debit Credit Balance
Date Item Debit Credit

Account Title:_____________________________ Account No.:___________

P/R Debit Credit Balance
Date Item Debit Credit

Account Title:_____________________________ Account No.:___________

P/R Debit Credit Balance
Date Item Debit Credit

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Account Title:_____________________________ Account No.:___________
P/R Debit Credit Balance
Date Item Debit Credit

Account Title:_____________________________ Account No.:___________

P/R Debit Credit Balance
Date Item Debit Credit

Account Title:_____________________________ Account No.:___________

P/R Debit Credit Balance
Date Item Debit Credit

Account Title:_____________________________ Account No.:___________

P/R Debit Credit Balance
Date Item Debit Credit

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Account Title:_____________________________ Account No.:___________
P/R Debit Credit Balance
Date Item Debit Credit

Account Title:_____________________________ Account No.:___________

P/R Debit Credit Balance
Date Item Debit Credit

Account Title:_____________________________ Account No.:___________

P/R Debit Credit Balance
Date Item Debit Credit

Account Title:_____________________________ Account No.:___________

P/R Debit Credit Balance
Date Item Debit Credit

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Account Title:_____________________________ Account No.:___________
P/R Debit Credit Balance
Date Item Debit Credit

Account Title:_____________________________ Account No.:___________

P/R Debit Credit Balance
Date Item Debit Credit

Account Title:_____________________________ Account No.:___________

P/R Debit Credit Balance
Date Item Debit Credit

Account Title:_____________________________ Account No.:___________

P/R Debit Credit Balance
Date Item Debit Credit

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Account Title:_____________________________ Account No.:___________
P/R Debit Credit Balance
Date Item Debit Credit

Account Title:_____________________________ Account No.:___________

P/R Debit Credit Balance
Date Item Debit Credit

Account Title:_____________________________ Account No.:___________

P/R Debit Credit Balance
Date Item Debit Credit

Account Title:_____________________________ Account No.:___________

P/R Debit Credit Balance
Date Item Debit Credit

Account Title:_____________________________ Account No.:___________

P/R Debit Credit Balance
Date Item Debit Credit

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Account Title Debit Credit

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 Unadjusted TB Adjustment Adjusted TB Income Statement Balance Sheet
Account Title Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.

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Account Title Debit Credit

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