Institute of Management Studies,

University of Peshawar
Subject: Principles of Accounting
Program: BBA
Semester: 1st
Section: E
Time Allowed: January 28th, 9:00 Am till January 31st, 11:55 Pm
Total Marks: 30
Name:
Section:
Instructions:
1. Read all questions carefully
2. Submit paper on google classroom on the following link
https://classroom.google.com/c/MjE2MTYwNDc5NDE1?cjc=6o5ijhv
3. Solve paper in the same document.
4. Handwritten paper will not be accepted
5. Late submitted paper will not be accepted
6. Tables are made for your convenience. Please incorporate the changes you deem
necessary

Question.1 You are to prepare a balance sheet for a hypothetical business entity of your
choosing. Include in your balance sheet the types of assets and liabilities that you think the
entity might have, and show these items at what you believe would be realistic Dollar
amounts.
Note: Obtain from the Pakistan Stock Exchange the annual report of a well-known company
Instructions
From the balance sheet and income statement, answer the following
a) What are the largest assets included in the company's balance sheet? Why would a
company of this type (size and industry) have a large investment in this particular
type of asset?
b) In reviewing the company's income statement. Did the company have a net income or
a net loss for the most recent year? What percentage of total revenues was that net
income or net loss?
c) Assume that you are a lender, and this company has asked to borrow an amount of
cash equal to 10% of its total assets, to be repaid in 90 days. Would you consider this
company to be a good credit risk? Explain. (10 Marks)
 (Name of the Business)
Balance Sheet
(Date)
Assets Liabilities + Owner’s Equity

(Name of the Business)

Income Statement
(Date)
Debit Credit

Part A

Part B
 Part C

Question. 2 Following transactions of Cheyenne Theater are summarized in the equation

form. Interpret the effects of Business Transaction and Write a separate statement for each of
the transaction explaining the nature of transaction. (5 Marks)
Assets Liabilities + Owner’s Equity
Cash Accounts Inventor Supplies Equipmen Notes Accounts Blue
Receivable y t Payable Payable Spruce’s
Capital
Balanc $ $ 37,330 $ 48,630 $ 9,130 $ 140,260 $ 54,630 $ 52,130 $ 162,270
e 33,680
a) -3,055 +11,269 +8,214
Balanc 30,625 37,330 48,630 9,130 151,529 54,630 60,344 162,270
e
b) +14,25 -14,255
5
Balanc 44,880 23,075 48,630 9,130 151,529 54,630 60,344 162,270
e
c) -19,309 -19,309
Balanc 25,571 23,075 48,630 9,130 151,529 54,630 60,344 142,961
e
d) +53,111 +53,111
Balanc 25,571 23,075 101,741 9,130 151,529 54,630 113,455 142,961
e
e) +18,54 +18,547
7
Balanc 44,118 23,075 101,741 9,130 151,529 54,630 113,455 161,508
e
f) -27,790 +48,179 +20,389
Balanc 16,328 23,075 101,741 9,130 199,708 75,019 113,455 161,508
e

Ans.
a)
b)
c)
d)
 e)
f)

Question. 3 Concord Miniature Golf and Driving Range Inc. was opened on March 1 by
Scott Verplank. The following selected events and transactions occurred during March.
Mar. 1 Invested $48,000 cash in the business.
Mar.3 Purchased Michelle Wie's Golf Land for $38,510 cash. The price consists of land
$10,520, building $21,530, and equipment $6,460. (Make one compound entry.)
Mar.5 Advertised the opening of the driving range and miniature golf course, paying
advertising expenses of $1,669.
Mar.10 Purchased golf equipment for $2,350 from Singh Company, payable in 30 days.
Mar.18 Received golf fees of $1,216 in cash,
Mar.30 Paid wages of $904.
Mar.30 Paid Singh Company in full.
Mar. 31 Received $694 of fees in cash.
Instructions (10 Marks)
1. Journalize the March’s transactions.
2. Post to Ledger Accounts
3. Prepare Trial Balance

General Journal
Date Account Titles and Explanations Debit Credit
 Postings to Ledger Accounts
Account Title Account Title
Date Debit Date Credit Date Debit Date Credit

Account Title Account Title

Date Debit Date Credit Date Debit Date Credit

Account Title Account Title

Date Debit Date Credit Date Debit Date Credit

Account Title Account Title

Date Debit Date Credit Date Debit Date Credit

Account Title Account Title

Date Debit Date Credit Date Debit Date Credit
 Account Title Account Title
Date Debit Date Credit Date Debit Date Credit

Trial Balance

Question. 4 Bramble, CPA, opened an accounting consulting practice on January 01, 2017.
During the first month of operations, the following transactions occurred. The firm closes its
accounts at the end of each month.
1. Purchased computer and networking equipment of January 1st for $ 52,000, paying $
26000 in cash and signing a $ 26000, 3 years notes payable. The useful life of
computer and networking equipment is 5 years. (Use Straight line Method)
2. Purchased $ 2400 of supplies. On January 31, determined that $ 650 of supplies were
on Hand. (5 Marks)
Instructions
a) Prepare the adjusting entries on January 31.
b) Why do businesses make adjustments at the end of each fiscal year?
Part a
Adjusting Entries
Date Accounts Titles and Explanation Debit Credit
Part b