Question

The following transactions occurred during the year 1999:

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

On March 2, $20000 was paid as a rent for the office.

On March 3, he purchased office equipment for10000$ paid 2000 cash and 8000 on credit.

On March 3, he purchased supplies for 500$ cash.

On march 3, $1500 was paid for advertising expenses

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

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

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

On march 23, he withdrew $ 1000 in cash for personal use.

On march 24, he performed a legal services for clients for $5000 cash

On march 25, he performed a legal service for client for $10000 of service he received cash of 6000 and it bill the balance 4000 on account.

On march 27,$500 paid cash as a payment of equipment credit

On march 29,hr received 1800 in cash from client who had been billed

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

On march 31, used office supply during the month $150

Adjustment data

The equipment purchased on March 3, 1999, is being depreciated using the straight-line method over 10 years, with a salvage value of $1,800.

Abdulaziz Law office estimates that uncollectible accounts receivable at year-end are $2200.

The short-term note is dated march 1, 1999, and carries a 5% interest rate.

prepar adjusted rtial balance and closing entry and financial statement

Answer 1

Journal entries
1-Mar	Cash	$100,000
	Capital		$100,000
1-Mar	Cash	$10,000
	Notes payable		$10,000
2-Mar	Rent	$20,000
	Cash		$20,000
3-Mar	Office Equipment	$10,000
	Cash		$2,000
	Accounts payable		$8,000
3-Mar	Supplies	$500
	Cash		$500
3-Mar	Advertising Expenses	$1,500
	Cash		$1,500
20-Mar	Salaries	$3,000
	Cash		$3,000
23-Mar	Prepaid Insurance	$30,000
	Cash		$30,000
23-Mar	Drawings	$1,000
	Cash		$1,000
24-Mar	Cash	$5,000
	Service revenue		$5,000
25-Mar	Cash	$6,000
	Accounts receivable	$4,000
	Service Revenue		$10,000
27-Mar	Accounts payable	$500
	Cash		$500
29-Mar	Cash	$1,800
	Accounts receivable		$1,800
31-Mar	Utilities expenses	$250
	Utilities payable		$250
31-Mar	Supplies expenses	$150
	Supplies		$150
Adjusting entries
31-Mar	Depreciation	$68
	Accumulated Depreciation		$68
	(Depreciation for 1 month)
	(10000-1800)/10 = $820 depreciation every year
	820/12*1 = $68 depreciation per month
31-Mar	Bad debts	$2,200
	Provision for Bad debts		$2,200
31-Mar	Interest expenses	$42
	Interest payable		$42
	(Interest on notes payable for 1 month)
	$10000 x 5% x 1/12 = 42
31-Mar	Insurance expenses	$2,500
	Prepaid Insurance		$2,500
	(30000 x 1/12)
31-Mar	Prepaid Rent	$18,333
	Rent		$18,333
	(assuming rent is paid for 1 year, 11 months rent transferred to prepaid account)
Trial balance
	Particulars	Debit	Credit
	Cash	$64,300
	Accounts receivable	$2,200
	Provision of bad debts		$2,200
	Office Equipment	$10,000
	Accumulated Depreciation		$68
	Supplies	$350
	Prepaid Insuance	$27,500
	Prepaid Rent	$18,333
	Capital		$100,000
	Drawings	$1,000
	Notes Payable		$10,000
	Accounts payable		$7,500
	Utilities payable		$250
	Interest payable		$42
	Service Revenue		$15,000
	Rent	$1,667
	Advertising Expenses	$1,500
	Salaries	$3,000
	Insurance expenses	$2,500
	Utilities expenses	$250
	Supplies expenses	$150
	Depreciation	$68
	Bad debts	$2,200
	Interest expenses	$42
	Total	$135,060	$135,060
Income Statement
	Service Revenue		$15,000
	Less: Operating expenses
	Rent	$1,667
	Advertising Expenses	$1,500
	Salaries	$3,000
	Insurance expenses	$2,500
	Utilities expenses	$250
	Supplies expenses	$150
	Depreciation	$68
	Bad debts	$2,200	$11,335
	Operating Income		$3,665
	Non operating expenses
	Interest expenses		$42
	Net profit		$3,623
Closing Entries
	Income summary	$15,000
	Service Revenue		$15,000
	Rent	$1,667
	Advertising Expenses	$1,500
	Salaries	$3,000
	Insurance expenses	$2,500
	Utilities expenses	$250
	Supplies expenses	$150
	Depreciation	$68
	Bad debts	$2,200
	Interest expenses	$42
	Income summary		$11,377
	Retained Earning	$3,623
	Income Summary		$3,623
Adjusted trial balance after closing entries
	Particulars	Debit	Credit
	Cash	$64,300
	Accounts receivable	$2,200
	Provision of bad debts		$2,200
	Office Equipment	$10,000
	Accumulated Depreciation		$68
	Supplies	$350
	Prepaid Insuance	$27,500
	Prepaid Rent	$18,333
	Capital		$100,000
	Drawings	$1,000
	Notes Payable		$10,000
	Accounts payable		$7,500
	Utilities payable		$250
	Interest payable		$42
	Retained Earnings		$3,623
	Total	$123,683	$123,683
Balance sheet
	Assets
	Current Assets
	Cash		$64,300
	Accounts receivable
	(net of provision of bad debts)		$0
	Supplies		$350
	Prepaid Insurance		$27,500
	Prepaid Rent		$18,333
	Total Current Assets		$110,483
	Fixed Assets:
	Equipment	$10,000
	Less: accumulated Depreciation	$68	$9,932
	Total Assets		$120,415
	Liabilities
	Current liabilities:
	Notes Payable		$10,000
	Accounts payable		$7,500
	Utilities payable		$250
	Interest payable		$42
	Total Current Liabilities		$17,792
	Owners Equity
	Capital	$100,000
	Add: Retained earnings	$3,623
	Less: Drawings	($1,000)	$102,623
	Total Liabilities & Owners Equity		$120,415