Program name (ADP)

Punjab College (Bhara Kahu)

Course Name Accounting-I (AD1AF)  

Program ADP (A & F)

Exam Mid-term

Semester 1st

Total Points 30

Time Allowed 1:30 hrs.

Instructor Prof. Sajid Yaqoob

Student Name: …………………………………………….

Registration #: …………………………………………….

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 Subjective
Time Allowed: 1:30 hrs. Total Marks: 30

Note: Attempt all the questions.

(Provide supporting examples to justify your answers (Where required).
Question No 1:
(Topic: Accounting and business Environment and Recording Business Transactions)
a. At December 31, 2016 the business records of Ali & Co. show these balances:
Insurance expense $ 8,000 Accounts receivable $ 8,000
Cash 37,000 Notes payable 12,000
Accounts payable 7,000 Retained earnings 10,000
Advertising expense 3,000 Salary expense 25,000
Service revenue 80,000 Equipment 50,000
Dividends 13,000 Common stock 29,000
Requirements:
Prepare income statement and statement of retained earnings. 05
b. Texas sales consultants completed the following transactions during the latter part of January:
Jan 22 Performed service for customer on account, $8,000.
30 Received cash on account from customer, $7,000.
31 Received a utility bill, $180 which will be paid during February.
31 Paid monthly salary to salesman, $2,000.
31 Paid advertising expenses of $700.
Requirement:
Journalize the above transactions and prepare cash account. 05

Question No 2: (Topic: The Adjusting Process)

The trial balance of Yasin Investment Advisors, INC. at November 30, 2017
Accounts Title Debit balances Credit balances

Cash $ 4,300

Accounts receivable 15,100

Prepaid expenses 2,300

Supplies 1,000

Equipment 30600

Accumulated depreciation $ 3,900

Accounts payable 6,400

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 -------
Salary payable

Unearned service revenue 5,800

Common stock 4,000

Retained earnings 23,000

Dividends 4,100

Service revenue 17300

Salary expense 3,000

Supplies expense -------

Depreciation expense -------

Rent expense -------

Total $ 60,400 $ 60,400

Adjustment data at November 30, 2017:

a. Unearned service revenue still unearned, $500.
b. Prepaid rent still in force, $2,000.
c. Supplies used during the month, $800.
d. Depreciation for the month, $400.
e. Accrued salary expense, $600.

Requirement:
Journalize the adjusting entries and prepare work sheet. 10

Question No 3: (Topic: Completing the accounting cycle and Merchandise inventory)

a. Brown Insurance Agency reported the following items at Nov.30, 2018
Service revenue $ 40000 Supplies expense $ 1000
Salary expense 6000 Depreciation expense 3000
Rent expense 8000 Dividends 4000

Requirement:

Journalize Brown’s closing entries, as needed for these accounts. 04

b. Assume that model store bought and sold a line of dolls during December as follows:

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 Dec, 01 Beginning inventory 13 units @ $ 11 per unit.

“ , 03 sale 9 units.

“ , 08 purchase 17 units @ $ 13 per unit.

“ , 10 sale 13 units

Model store uses the perpetual inventory system.

Requirements: 06

1. Compute the cost of ending inventory using FIFO method.

2. Compute the cost of ending inventory using LIFO method.