Department of Marketing

Jahangirnagar University
Mid-Term Examination
Batch: 10th, Semester: 2nd
Course Name: Financial Accounting
Course Code: MKT 108

Time: 01 hour 20 Minutes Full Marks: 20

(Answer all the questions)

01. Who are external users of accounting data? Mention four external users of accounting data. 02
02. Describe the types of adjusting entries. 03

03. Joan Robinson opens her own law office on July 1, 2018. During the first month of operations, the
following transactions occurred.
1. Joan invested BDT 5,00,000 in cash in the law practice.
2. Purchased office equipment on account BDT 30,000.
3. Provided legal services to clients for cash BDT 10,500.
4. Performed legal services for client on account BDT 20,000.
5. Paid monthly expenses: salaries BDT 50,000, utilities BDT 3,000, and telephone BDT 1,000.
6. Joan withdraws BDT 10,000 cash for personal use.
Instruction
Prepare a tabular summary of the transactions. 04

04. The ledger of Piper Rental Agency on March 31 of the current year includes the following selected
accounts before adjusting entries have been prepared.
Debit Credit
Prepaid Insurance 3,600
Supplies 2,800
Equipment 25,000
Accumulated 8,400
Depreciation—Equipment
Notes Payable 20,000
Unearned Rent Revenue 9,900
Rent Revenue 60,000
Wages Expense 14,000

An analysis of the accounts shows the following.

1. The equipment depreciates BDT400 per month.
2. One-third of the unearned rent revenue is still unearned during this period.
3. Supplies on hand total BDT 700.
4. Insurance expires at the rate of BDT 600 per quarter.

Instructions
Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. 04
05. At the end of its first month of operations, Watson Answering Service has the following unadjusted
trial balance.
WATSON ANSWERING SERVICE
August 31, 2018
Trial Balance

Debit Credit
Cash 5,400
Accounts Receivable 2,400
Supplies 2,800
Prepaid Insurance 1,300
Equipment 60,000
Notes Payable 40,000
Accounts Payable 2,400
Ray Watson, Capital 30,000
Ray Watson, Drawing 1,000
Service Revenue 4,900
Salaries Expense 3,200
Utilities Expense 800
Advertising Expense 400
77,300 77,300

Other data:
1. Insurance expires at the rate of $200 per month.
2. $1,000 of supplies is on hand at August 31.
3. Monthly depreciation on the equipment is $900.
4. Interest of $500 on the notes payable has accrued during August.
5. Performed services for client $600 but not recorded.

Instructions
Prepare a worksheet. 07