Question

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

Mr. Salah opened the accounting analyst services in January 2020. He plans to prepare the monthly financial statement dated 31 January 2020. During this month period he completed the following transaction.

January 1. Mr. Salah invested cash OMR 30,000, computer value OMR 2,000

January 2. Paid OMR 1500 cash for the rent of office space for the next 3 months.

January 3. Purchased other office tools OMR 950 on credit.

January 4. Hired a helper agree salary OMR 700.

January 8. Completed work for a client and immediately collected cash OMR 2,80

January 10. Perform services for a client and sent a bill OMR 500 to be paid later.

January 12. Purchased supplies OMR 8,000 in cash.

January 14. Mr. Salah has booked an equipment for OMR 999 and the expected delivery of an equipment will be in the month of February.

January 15. Received cash OMR 3000 from a client for the service to be provided for the month of February and March 2020.

January 17. Pay school fees OMR 450 for the kids from his personal fund.

January 18. Collected OMR 200 on the amount owed by the client.

January 22. Purchased laptop and returned it back on the same day as it was defective OMR 299

January 25. Paid cash OMR 500 for liability on the office tools

January 28. Owner withdrew OMR. 500 cash for personal use.

January 30. Completed work for another client OMR. 600 but paid only for 50% of the amount. The remaining agree to pay later.

January 31. Paid salary of helper. OMR 700.

January 31. Planned to purchase additional supplies of OMR 500.

January 31. Received electricity bill OMR 250.

From the above transaction you are required to prepare:

5. Analyze the transaction by using accounting equation. (0.5 Mark*8 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

a. Rent expense for the month OMR 500

b. Office supplies at the end of the month 4500.

c. Unearned revenue OMR 1500. At the end of the month.

d. The computer has useful life 3 years and residual value OMR 200

e. The earned revenue not recorded at the end of the month OMR 1450.

10. Use the adjusted Trial Balance to prepare Income statement, statement of owners’ equity and statement of financial Position. (6.5 marks)

Answer 1

Prepare journal entries as follows:

						Accounting Equation
Date	Account Titles	Debit (OMR)	Credit (OMR)			Assets	=	Liability	+	Capital
Jan. 01	Cash	30000				30000
	Computer	2000				2000
	Salah, Capital		32000							32000
Jan. 02	Prepaid Rent	1500				1500
	Cash		1500			-1500
Jan. 03	Office tools	950				950
	Accounts payable		950					950
Jan. 04	No Entry
Jan. 08	Cash	280				280
	Service revenue		280							280
Jan. 10	Accounts Receivable	500				500
	Service revenue		500							500
Jan. 12	Supplies	8000				8000
	Cash		8000			-8000
Jan. 14	No entry
Jan. 15	Cash	3000				3000
	Unearned service revenue		3000					3000
Jan. 17	No entry
Jan. 18	Cash	200				200
	Accounts receivable		200			-200
Jan. 22	Laptop	299				299
	Cash		299			-299
Jan. 22	Cash	299				299
	Laptop		299			-299
Jan. 25	Accounts payable	500						-500
	Cash		500			-500
Jan. 28	Salah, withdrawal	500								-500
	Cash		500			-500
Jan. 30	Accounts Receivable	300				300
	Cash [600 × 50%]	300				300
	Service Revenue		600							600
Jan. 31	Salaries Expense	700								-700
	Cash		700			-700
Jan. 31	No entry
Jan. 31	Telephone expense	250								-250
	Accounts payable		250					250
						35630	=	3700	+	31930

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Prepare Adjusted entries as follows:

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Adjusted Trial Balance as follows:

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