Question

The following transactions occurred during the year 1999:

1- March 1, lawyer Abdalaziz begins his own business as a real estate with a cash investment of 100,000$.

2- On March 2, $ 6000 was paid as a rent for the office. 3- On March 3, he purchased office equipment for3000$ cash.

4- On March 3, he purchased supplies for 500$ cash. 5- On march 10,$1500 was paid for advertising expenses

6- On March 20, he paid workers salaries s of $ 3,000 cash.

7- On March 1, Abdalaziz borrowed 10,000$ by signing 5%, one-year note on April1, 2000.

8- march 23, Purchased a one-year fire insurance policy for 30,000$.

9- On march 10, he withdrew $ 1000 in cash for personal use.

10- Onmarch 7, he performed a legal services for clients for $4000 cash

11- On march 20, received 1000$ cash advance from client.

12- On march 30, used office supply during the month $150

13- On marchr11, billed customers 1000$ for services performed.

14- On march 26, pay creditors $ 400 cash.

15- Utilities expense incurred but not paid on March 31, 1999.250$ .

16- 300$ of the balance in the unearned service revenue account remains unearned at the end of the year.

Prepare t-account and financial statmant and trial balance sheet

Answer 1

Ans.                                 Profit and Loss for the month of March 1999 (value in $)

                Particular                               $    Particular    $                    

               To Purchase of supplies          500               To Revenue                   

               To Rent (march month)           500                   (4000+1000+700*)       5700

               To Advertisement Exp.           1500              To Net Loss                    2592

   To Salary paid 3000

   To Intt on loan (1month)    42

   To Insurance (1month)    2500

   To Accured Utility Exp.    250                                                          

                                           

*Out of $1000 Advance received from customer only 300$ remained unearned service account, means $700 we can recognized revenue.

                                                           Cash/Bank A/c

         Pariticulars                               Amt.                          Particulars            Amt

   To Capital                                              100000                    By Rent paid                 6000

   To Received from customer(4000+1000)      5000                     By Equipment Purchase    3000

   To 5% Loan                                           10000                      By Supplies purchase        500

                                                                                              By Advt exp.                     1500

                                                                                             By Salary paid                   3000

                                                                                             By Paid to creditor              400

                                                                                             By Insurance                      30000

                                                                                             By Drawing                         1000

                                                                                    By Bal.C/d                         69600

                                                         Trial Balance Sheet at the end of 31 march 1999

Liabilities                                                                                  Assets

Capital A/c (100000-1000-2592)                  96408                       Equipment 3000     

5% loan (10000+42-400)                             9642                        Prepaid insurance 27500

Unearned revenue                                       300                         Prepaid Rent          5500

Accured Utilities exp.                                 250                          Debtor                   1000

                                                                                               Cash                      69600

                                                            

                                                            106600                                                      106600