Principal of Accounting

Q No.1
AUSTIN SOUND SEREO CENTER, INC.
TRIAL BALANCE
DECEMBER 31,2002
TITLE OF ACCOUNT DEBIT CREDIT
Cash 110,350
Account receivable 54600
Note receivable 83,000
Land 100,000
Inventory-opening 40,500
Supplies 650
Prepaid insurance 1200
Furniture and Fixture 83,200
Accumulated depreciation-furniture 2400
Account payable 47,000
Note payable (long-term) 12,600
Capital-Frank 175,000
Sales revenue 338,000
Sales discount 1400
Sales return and allowance 2000
Interest revenue 600
Purchases 89,300
Purchases discount 3000
Purchases return and allowances 1200
Freight in 5200
Rent expense 8400
TOTAL 579,800 579,800

ADJUSTMENT DATA:
1. Interest revenue earned but not yet collected Rs. 400
2. Supplies on hand Rs. 100
3. Insurance expired during the year Rs. 1000
4. Depreciation for the year Rs. 600
5. Interest expense incurred but not yet paid Rs. 200
6. Inventory on hand at the end of the year Rs. 42,000
7. 5% of A/c Receivable is estimated to be uncollectible.
8. Tax expense 25% of EBT

INSTRUCTIOS:
 Adjusting entries
 Income Statement and Balance Sheet
Q No 2: Ahmad and co. presented following data on June 30, 2002

Title of account Debit Credit

Cash 15,000
A/c Receivable 25,600
Supplies 1500
Note receivable 12,000
Equipment 18,000
Furniture 25,000
Land 125,000
A/c payable 17,000
Note payable 5,000
Bank overdraft 18,600
Commission revenue 85,000
Salaries expense 24,200
Advertising expense 4500
Drawing 7000
Rent expense 12000
Capital 144,200
total 269,800 269,800

Additional information;
1. Accrued commission revenue Rs.700
2. Accrued salaries expense Rs. 4500
3. Depreciation expense on equipment 5% and on furniture 10%
4. Interest expense 8% on overdraft is due but not paid by company yet.
5. Bad debts estimated on A/c receivable 3%
Required:
i) prepare adjusting entries
ii) prepare income statement
iii) prepare balance sheet
Q No.3

Following Trial balance and adjustment data is presented by Saleem , a sole-trader at the
end of its financial year Dec.31,2012.

TITLE OF ACCOUNT DEBIT CREDIT

CASH 105,000
A/C RECEIVABLE 20,000
EQUIPMENT 132,800
ADVERTISING EXPENSE 3,000
PREPAID RENT 6,000
MISCELLANEOUS EXPENSE 2,000
OFFICE SUPPLIES EXPENSE 1,000
INTEREST EXPENSE 500
MDS. INVENTORY 7,000
COST OF GOODS SOLD 25,100
CARRIAGE OUTWARD 200
SALES RETURN 900
SALARIES EXPENSE 8,000
SALES REVENUE 240,000
COMMISSION UNEARNED 800
INTEREST INOCME 400
COMMISSION INCOME 2,500
A/C PAYABLE 5,500
CAPITAL-SALEEM 39,800
NOTE PAYABEL 5,000
BANK OVERDRAFT 7,500
LONG-TERM LOAN 10,000
TOTAL 311,500 311,500

ADJUSTMENT DATA ON DEC.31,2002:

 Depreciation on equipment 2%
 Tax rate is applied 20%
 Unused rent at the end of the Dec 31 2500
 Commission income earned by company 2000
 Interest expense outstanding 2000
 Office supplies in hand at the end of Dec 31 500

INSTRUCTION
1. ADJUSTING ENTRIES AND ADJUSTED TRIAL BALANCE
2. MULTIPLE STEP INCOME STATEMENT showing EBIT and EAT
3. BALANCE SHEET in classified form.
 Q No.4 Saleem provided following Trial Balance on December 31, 2012 and adjustment
data.

TITLE OF ACCOUNT DEBIT CREDIT

CASH 45,000 
A/C RECEIVABLE 175,000 
OFFICE EQUIPMENT 325,000 
MARKETING EXPENSE 12,500 
PREAPID ADVERTISING 8,500 
OTHER EXPENSE 6,000 
OFFICE SUPPLIES EXPENSE 3,500 
INTEREST EXPENSE 16,000 
MDS. INVENTORY-BEGINNING 27,800 
PURCHASES 275,000 
TRANSPORTATION-IN 22,000 
SALES RETURN 12,000 
SALARIES EXPENSE 65,000 
SALES REVENUE   575,000
PURCHASES RETURN   1800
PURCHASES DISCOUNT   4500
INTEREST INCOME   27,000
A/C PAYABLE   35,000
CAPITAL-SALEEM   222,300
SHORT-TERM LOAN   55,000
BILL PAYABLE   22,700
LONG-TERM LOAN   50,000
  TOTAL  993,300 993,300
     
ADJUSTMENT DATA:

1. Mds.inventory ending Rs.45,000

2. Depreciation on office equipment Rs.22,500
3. Bad debts expense 5% of A/c receivable
4. Tax rate is 2% applied
5. Salaries payable 2500
6. Interest outstanding Rs. 5000
7. Prepaid marketing expense amounting 3000

Required:
1. Adjusting entries and adjusted trial balance
2. Multiple step Income Statement showing EBIT and EAT
3. Balance Sheet classified form

Q No.5
 AUSTIN SOUND SEREO CENTER, INC.
TRIAL BALANCE
DECEMBER 31,2012
TITLE OF ACCOUNT DEBIT CREDIT
Cash 110,350
Account receivable 54600
Note receivable 8000
Inventory-opening 40,500
Supplies 650
Prepaid insurance 1200
Furniture and Fixture 183,200
Accumulated depreciation-furniture 2400
Account payable 47,000
Note payable (long-term) 12,600
Capital-Frank 100,000
Sales revenue 338,000
Sales discount 1400
Sales return and allowance 2000
Interest revenue 600
Purchases 89,300
Purchases discount 3000
Purchases return and allowances 1200
Freight in 5200
Rent expense 8400
TOTAL 504,800 504,800

ADJUSTMENT DATA:
9. Depreciation for the year $ 600
10. Inventory on hand at the end of the year $ 42,000
11. Tax rate is 40% applied

INSTRUCTIOS:
 Multiple step Income Statement showing EBIT and EAT
 Classified Balance Sheet