Question

Use the Following information for the Question Numbers 5 to 10.

Ms. Maryam opened training services company in January 2020. She plans to prepare the monthly financial statement dated 31 January 2020. During this month period he completed the following transaction.
January 1. Ms. Maryam invested cash OMR 50,000, Equipment value OMR 5,000

January 2. Ms. Maryam went to Malaysia and paid the cost from her own money.
January 3. Paid for advertisement published in the newspaper OMR 300.

January 4. Completed work for a client and immediately collected cash OMR 5,000.

January 8. Hired an accountant and promised to give him OMR 750.
January 10. Purchased Computer OMR 1000 on credit.
January 12. Purchased supplies OMR 8,000 cash.

January 14. Ms. Maryam withdraw OMR 2,000 from the business bank account for personal use.

January 15. Performed a service for a customer who promised to pay later in this month OMR 500.

January 17. Received cash OMR 6,000 from a client for the service to be provided for the month of February and March 2020.

January 18. Collected OMR 500 on the amount owed by the client.

January 22. Purchased furniture and returned it back on the same day as it was defective OMR 600
January 25. Paid cash OMR 500 for liability on computer purchased previously.
January 28. Paid salary of the accountant OMR 750
January 30. Completed work for another client OMR 10,000 but paid only for 50% of the amount. The remaining agree to pay later.

January 31. Paid OMR 600 cash for the rent of office space for the next three months.

January 31. Received utilities bill OMR 200.

From the above transaction you are required to prepare:

5. Analyze the transaction by using accounting equation. (0.5 Mark*13 = 6.5 marks)
6. Prepare the Journal entries for the month of January. (0.25 for each account= 7 marks)
7. Post the entries and calculate the balances. (0.5 Mark*13 = 6.5 marks)
8. Use the balances to prepare the unadjusted trial Balance.
9. After completing the Unadjusted trial balance use the below information to prepare the Adjusted Trial Balance.

Additional information

1. Unearned revenue OMR 1000 at the end of the month.
2. Rent expense for the month OMR 200
3. The Equipment has useful life 3 years and residual value OMR 500
4. Office supplies at the end of the month OMR 3500.
5. The earned revenue not recorded at the end of the month OMR 2000.

10. Use the adjusted Trial Balance to prepare Income statement, statement of owners’ equity and statement of financial Position.

Answer 1

1. Analyze the transaction by using accounting equation -

2. Prepare the Journal entries for the month of January -

3. Post the entries and calculate the balances -

4. Use the balances to prepare the unadjusted trial Balance -

5. After completing the Unadjusted trial balance use the below information to prepare the Adjusted Trial Balance -

6. Use the adjusted Trial Balance to prepare Income statement, statement of owners’ equity and statement of financial Position -