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education-2014
07-22-2014, 02:07 PM
MGT101 Financial Accounting Assignment No.2 Ideal Solution Spring Fall 2014

Assignment Questions !!

TOPIC TO BE TESTED:
• Recognizing changes in accounting equation and its effect on financial statements
LEARNING OBJECTIVES:
• To understand, recognize and record changes in the accounting equation due to
the transaction activities
 To prepare financial statements i.e. Balance Sheet
QUESTION
Following data is available for a business concern on June 30, 2013:
Items Rs.
Accounts Payable 25,000
Cash 45,000
Factory Building 250,000
Equipment 74,000
Contributed Capital 85,000
Notes Payable 2,500
Land 222,000
Supplies 4,500
Retained Earnings 483,000
SEMESTER SPRING 2014
FINANCIAL ACCOUNTING (MGT101)
ASSIGNMENT # 02
DUE DATE: 22nd July 2014 MARKS: 10 Further activities have been carried in July 2013:
1. Received Rs.300,000 in cash against 3,000 shares
2. Local bank has approved a loan worth Rs.15,000 that is payable on June 30, 2014
3. Paid Rs.33,000 in cash and signed a one-year note for the balance against purchase of factory
building worth Rs.83,000
4. An equipment has been purchased on cash that costs Rs.45,000
5. Purchased supplies on account worth Rs.45,000


Required:
1. Analyze each transaction of July in order to determine its effect on the accounting equation.
2. Prepare T- Accounts and find ending balance
3. Prepare Balance Sheet using T account format at July 31, 2013
For requirement no.1 follow the format provided below in example.
Example: Purchased a piece of land on account that costs Rs.50,000
Assets = Liabilities + Shareholders’ Equity
Assets Liabilities Shareholders’ Equity
Land Accounts
Payable
+ 50,000 + 50,000

Entboy
07-22-2014, 04:00 PM
Format of balance sheet :
Format
The balance sheet can be reported in two different formats: account form and report form. The account form consists of two columns displaying assets on the left column of the report and liabilities and equity on the right column. You can think of this like debits and credits. The debit accounts are displayed on the left and credit accounts are on the right.

The report form, on the other hand, only has one column. This form is more of a traditional report that is issued by companies. Assets are always present first followed by liabilities and equity.

In both formats, assets are categorized into current and long-term assets. Current assets consist of resources that will be used in the current year, while long-term assets are resources lasting longer than one year.

Liabilities are also separated into current and long-term categories.

Like all financial statements, the balance sheet has a heading that display's the company name, title of the statement and the time period of the report.

vuassignments
07-23-2014, 02:29 AM
Balance sheet example:

23405

vuassignments
07-23-2014, 05:38 PM
Further activities have been carried in July 2013:

1. Received Rs.300, 000 in cash against 3,000 shares

2. Local bank has approved a loan worth Rs.15, 000 that is payable on June 30, 2014

3. Paid Rs.33, 000 in cash and signed a one-year note for the balance against purchase of factory

Building worth Rs.83, 000

4. An equipment has been purchased on cash that costs Rs.45, 000

5. Purchased supplies on account worth Rs.45, 000

Required:

1. Analyze each transaction of July in order to determine its effect on the accounting equation.

2. Prepare T- Accounts and find ending balance

3. Prepare Balance Sheet using T account format at July 31, 2013