Question

In: Accounting

Mr. Ali the owner of a business in Muscat; incorporates as Software Programming Company that specialises...

Mr. Ali the owner of a business in Muscat; incorporates as Software Programming Company that specialises in providing computer programming services and selling computer devices and accessories. The business has been established on 1st July 2019 without having specialized accounting department or system. However, at the end of July the business faces major difficulties and misunderstanding of the process of recording and journalizing the relevant economic transactions that have been done during the first month in an appropriate and standardized way. In this case you are required to handle some financial problems that Mr. Ali has provided you with the following transactions:

July 1. Mr. Ali The owner invests OMR 110,000 cash in the business.

July 2. The business purchased office equipment for OMR 45,000 cash. With annual depreciation of 10% for the next 10 years with no expected salvage value.
July 3. The business purchased for OMR 3,600 on account from a Supply Company computer paper and other supplies expected to last for several months.

July 5. The business provided OMR 14,000 of programming and maintenance services for a customer. It received cash of OMR 7,000, and it billed the balance of OMR 7,000 on account.

July 7. The business purchased computer accessories as an inventory in order to resell them. The business purchased 1000 headsets for OMR 10 each.
July 10. The business paid OMR 4,000 from the purchases due balance for the supplier.
July 15. The baseness purchased supplies OMR 8,000 in cash.

July 20. The business sold 550 units for customers for OMR 20 each.

July 23. The business received OMR 5,500 of the sales due balance from the customers.

July 27. Mr. Ali withdrawn OMR 1,600 cash from the business for his personal use.
July 28. The business hired a new secretary with basic salary of OMR 650.

July 29. The business received OMR 4,500 for programming services that will provide during the next 3 months.
July 30. The business paid the following expenses in cash for July: Store rent OMR 1,000, salaries and wages of employees OMR 3,400.
July 31. The business purchased a 6-month insurance policy for OMR 1,800

July 31. Received and paid the electricity and other utilities bills of OMR 1,100.

From the above transaction you are required to prepare

7. Post the entries and calculate the balances. (0.5 Mark*13 = 6.5 marks)

Solutions

Expert Solution

Amount in OMR
Date Account Titles Debit Credit
July.1 Cash 110,000
Ali, Capital 110,000
July.2 Office Equipment      45,000
Cash      45,000
July.3 Office Supplies        3,600
Accounts Payable        3,600
July.5 Cash        7,000
Accounts Receivable        7,000
Service revenue      14,000
July.7 Purchases      10,000
Accounts Payable      10,000
July.10 Accounts Payable        4,000
Cash        4,000
July.15 Office Supplies        8,000
Cash        8,000
July.20 Accounts Receivable      11,000
Sales      11,000
(550 x 20 )
July.23 Cash        5,500
Accounts Receivable        5,500
July.27 Drawing, Ali        1,600
Cash        1,600
July.28 No Entry
July.29 Cash        4,500
Unearned Revenue        4,500
July.30 Store Rent        1,000
Salaries & Wages        3,400
Cash        4,400
July.31 Prepaid Insurance        1,800
Cash        1,800
July.31 Electricity & other utilities bill Expense        1,100
Cash        1,100
Balances:- Amount in OMR
Debit Credit
Cash                          61,100
Electricity & other utilities bill Expense                            1,100
Prepaid Insurance                            1,800
Store Rent                            1,000
Salaries & Wages                            3,400
Unearned Revenue        4,500
Drawing, Ali                            1,600
Accounts Receivable                          12,500
Office Supplies                          11,600
Accounts Payable        9,600
Sales      11,000
Purchases                          10,000
Service revenue      14,000
Office Equipment                          45,000
Ali, Capital 1,10,000
Total                      149,100 149,100

Related Solutions

Mr. Ali the owner of a business in Muscat; incorporates as Software Programming Company that specialises...
Mr. Ali the owner of a business in Muscat; incorporates as Software Programming Company that specialises in providing computer programming services and selling computer devices and accessories. The business has been established on 1st July 2019 without having specialized accounting department or system. However, at the end of July the business faces major difficulties and misunderstanding of the process of recording and journalizing the relevant economic transactions that have been done during the first month in an appropriate and standardized...
Mr. Ali the owner of a business in Muscat; incorporates as Software Programming Company that specialises...
Mr. Ali the owner of a business in Muscat; incorporates as Software Programming Company that specialises in providing computer programming services and selling computer devices and accessories. The business has been established on 1st July 2019 without having specialized accounting department or system. However, at the end of July the business faces major difficulties and misunderstanding of the process of recording and journalizing the relevant economic transactions that have been done during the first month in an appropriate and standardized...
Mr. Ali the owner of a business in Muscat; incorporates as Software Programming Company that specialises...
Mr. Ali the owner of a business in Muscat; incorporates as Software Programming Company that specialises in providing computer programming services and selling computer devices and accessories. The business has been established on 1st July 2019 without having specialized accounting department or system. However, at the end of July the business faces major difficulties and misunderstanding of the process of recording and journalizing the relevant economic transactions that have been done during the first month in an appropriate and standardized...
Mr. Ali the owner of a business in Muscat; incorporates as Software Programming Company that specialises...
Mr. Ali the owner of a business in Muscat; incorporates as Software Programming Company that specialises in providing computer programming services and selling computer devices and accessories. The business has been established on 1st July 2019 without having specialized accounting department or system. However, at the end of July the business faces major difficulties and misunderstanding of the process of recording and journalizing the relevant economic transactions that have been done during the first month in an appropriate and standardized...
Mr. Ali the owner of a business in Muscat; incorporates as Software Programming Company that specialises...
Mr. Ali the owner of a business in Muscat; incorporates as Software Programming Company that specialises in providing computer programming services and selling computer devices and accessories. The business has been established on 1st July 2019 without having specialized accounting department or system. However, at the end of July the business faces major difficulties and misunderstanding of the process of recording and journalizing the relevant economic transactions that have been done during the first month in an appropriate and standardized...
Combining the personal expenses of Mr Ali with the expenses of his business, Ali Auto Shop,...
Combining the personal expenses of Mr Ali with the expenses of his business, Ali Auto Shop, would violate the a. Cost principle. b. Ethics principle. c. Monetary unit assumption. d. Economic entity assumption.
Mr Kaur started a software business. He decided to incorporate. He did so, calling his company...
Mr Kaur started a software business. He decided to incorporate. He did so, calling his company Kaur and Sons Pty Ltd. Mr Kaur sold the assets and goodwill of his software business to Kaur and Sons Pty Ltd for $30,000. Rather than the company paying him $20,000 in cash, the company issued 20,000 shares worth $1.00 each to Mr Kaur. At the time of the sale, the company still owes $10,000 to Mr Kaur. This debt relates to $10,000 of...
Q4 Mr Ali has been working as a finance officer in a famous consumer goods company...
Q4 Mr Ali has been working as a finance officer in a famous consumer goods company in Oman. Recently Ali met his friend Qasim in a coffee shop. Ali has come to know that Qasim is working in another consumer goods company and both these companies are strong competitors. Ali and Qasim both discussed and shared different experiences and strategies of their company, knowing that both companies are tough opponents. These companies give tough time to each other, especially in...
Mr. Ali decided to set-up his own business of Shoe making. He needs raw materials, building,...
Mr. Ali decided to set-up his own business of Shoe making. He needs raw materials, building, equipment and machinery, and finance to meet up overhead expenses. He wants interest (Riba) free financing. How Islamic Banking can help him in this situation to meet his working capital needs? 1. Take any Islamic Bank working in Pakistan. 2. Explain what Islamic Financing products are available to help Ali? 3. In case, Ali needs long term financing then how Islamic bank can help...
Mr. Jabir is owner of Super Night Lamp Manufacturing SOAG, located in Salalah. His business is...
Mr. Jabir is owner of Super Night Lamp Manufacturing SOAG, located in Salalah. His business is suffering from loss since last two years. He wanted to improve his business activity but bank and other investors were not ready to invest his business. Mr. Tahsin was appointed as auditor to check books of account. According to Mr. Jabir change the audit report and give a positive report which actually was not. On the basis of given scenario answer following questions: a)...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT