Financial Accounting MGT101 Assignment No.1 Fall 2014, Solution and Discussion

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MGT101 Financial Accounting Assignment No.1, Fall 2014 Due Date- Nov-26, 2014
Important announcement Assignment 1
FINANCIAL ACCOUNTING (MGT 101)


• Basic concepts involved in the preparation of General Journal
L EARNING O BJECTIVES :
• To express the effects of business transactions in terms of debits and credits to
different types of accounts.
• To record the effects of business transactions in a journal.
QUESTION
Mr. A has recently incorporated Courier Delivery Enterprise. Suppose he has
appointed you as an account officer in his office and assigned you a task to
prepare the General Journal of the company for the month of September 2014
(First operational month of the company). The transactions of for period are as
follows:
Date
Transactions
2-Sep Mr. A started business with cash Rs. 500,000 and also borrowed from bank Rs. 250,000 @18% p.a. to
continue the business operations.
Purchased courier vehicles for Rs.250,000
5-Sep Deposited in the bank Rs. 10,000
9-Sep Purchased goods worth Rs. 50,000, from Hafeez & Co.
1-Sep
12-Sep Mr. A withdrew cash for personal use Rs. 5,000 and goods of Rs. 2,000 from the business.
17-Sep Gave away as charity cash Rs.200
25-Sep Motor cycle bought on Sep 2, 2014 was sold for Rs. 20,000 (cost Price Rs. 55,000) being damaged
30-Sep Following expenses are paid
1) Telephone bill paid Rs. 6,500
2) Salaries to office Staff paid Rs. 25,000Required:
Based on the above information, you are required to Journalize the
transactions in provided format.
I MPORTANT :
Grace period of extra 24 hours after the due date is usually available to
overcome uploading difficulties. This extra time should only be used to meet
the emergencies and above mentioned due dates should always be treated as
final to avoid any inconvenience.
I MPORTANT I NSTRUCTIONS
• Carefully watch relevant lectures and consult the relevant material
from handouts along with recommended books.
• Do practice of all the covered topics by solving questions/ exercises
available in recommended book(s).
• Attempt t h e assignment by yourself and it will be
entertained positively.
O THER I MPORTANT I NSTRUCTIONS :
D EADLINE :
• Make sure to upload the solution file before the due date on VULMS.
• Any submission made via email after the due date will not be
accepted.
F ORMATTING GUIDELINES :
• Use the font style “Times New Roman” or “Arial” and font size “12”.
• It is advised to compose your document in MS WORD format (as
provided below).
• You may also compose your assignment in Open Office format.
• Use black and blue font colors only.R ULES FOR M ARKING
Please note that your assignment will not be graded or graded as Zero (0), if:
• It is submitted after the due date.
• The file you uploaded does not open or is corrupt.
• It is cheated or copied from other students, internet, books,
journals.
Note related to load shedding: Please be proactive
Dear students!
As you know that Pre Mid-Term semester activities have been
started and load shedding problem is also prevailing in our country
now a days. Keeping in view the fact, you all are advised to post
your activities as early as possible without waiting for the due date.
For your convenience; activity schedule has already been uploaded
on VULMS for the current semester, therefore no excuse will be
entertained after due date of assignments, quizzes or GDBs.
You need to follow the provided format for recoding the
transactions.
Mr. A's Journal
Date
Particulars
XXX
XXX
L.F.
Dr. Cr.
Rs. Rs.
XXXXX
XXX
XXXXX

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. Cash to capital , cash to bank , interest expense to interest payable

2.purchases/vehicles to cash account

3.bank to cash account

4.purchases to hafiz & co account

5.drawings a/c to capital account

6.charity a/c to cash accoun

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7.cash a/c ,loss on disposal a/c to asset /motor vehicle a/c

8.telephone exp a/c to cash a/c

7.salaries a/c to cash a/c

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Financial Accounting MGT101 Assignment No.1

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First Example
The company started business on June 6, 2013. The business was started with $300,000. The transactions they engaged in during their first month of business are below:
Date Transaction
June8
An amount of $50,000 was paid for six months of rent.
June9
Equipment costing $100,000 was purchased using $40,000 cash. The remaining amount of $60,000 is a one year note with an interest rate of 3.4%
June10
Office supplies were purchased totaling $25,000 on account.
June16
Received $39,400 in cash for services rendered to customers.
June16
Paid the account for office supplies purchased June 10.
June20
$63,900 worth of services were given to customers. Received cash amount of $43,700. Customers promised to pay remaining amount of $20,200.
June21
Paid employees’ wages for June 8-June 21. Wages totaled $23,500.
June21
Received $20,200 in cash for services rendered to customers on June 20.
June22
Received $6,300 in cash as advanced payment from customers.
June27
Office supplies were purchased totaling $3,500 on account.
June28
Electricity bill received totaling $1,850.
June28
Phone bill received totaling $2,650.
June28
Miscellaneous expenses totaled $4,320.
These events would then be recorded into the accounting journal. The table below records the journal entries for the events above.


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