Fundamentals of accounting GROUP WORK

Campus: MEG-01
Department: business management
Program: degree
Field of study: BMgt
Section: M-2DRB

GROUP MEMBERS ID
1. Entisar Masresha ADMA 1281/21

2. Eyerusalem Adebabay ADMA 1287/21

3. Yabsira Fikadu ADMA 1461/21

4. Yafet Takele ADMA 0172/21

5. Yared G/giorgis ADMA 1428/21

6. Getaneh Gulilat ADMA 0585/21

7. Eyerus Abera ADMA 1129/21

Submitted to Mr. Melak Denberu

April 7, 2022

Addis Ababa, Ethiopia

 1. During the month of July 2010, the business performed the following transactions. July 1, 2010
Sergeant Aynalem has been running a big garage as a co-owner with his friends. As of July, he
decided to start his own business known as Aynalem Garage. Sgt. Aynalem invested the
following assets and liabilities to his new Garage:
 Cash; Birr 16,400
 Account receivable of the previous business, which is allocated to Sgt. Aynalem when the
previous business is liquidated is Birr 4800,
 Supplies; Birr 2000, and
 Equipment having a value of Birr 12000.
 There were no liabilities transferred to this business.
2. July 2, 2010, paid cash Birr 2,700 in advance for rent for the next 3 months for the office of the
business.
3. July 5, 2010 received cash Birr 4000 from Maintenance service revenue.
4. July 7, 2010, purchased additional equipment for Birr 2500 on account from Yacona Engineering.
5. July 10, 2010, received cash Birr 1000 from charge customers in payment of their debt.
6. July 11, 2010, paid cash Birr 720 for salary.
7. July 12, 2010, paid Cash Birr 300 for advertisement (debit miscellaneous expense)
8. July 13, 2010, paid Cash Birr 1000 in partial payment of an amount owed to Yacona Engineering.
9. July 16, 2010, received cash Birr 3000 from maintenance service revenue.
10. July 20, 2010, paid cash Birr 900 for the purchase of supplies.
11. July 24, 2010, paid cash Birr 150 for electric bill and Birr 100 for telephone. (Charge to
miscellaneous expense).
12. July 25, 2010, delivered a maintenance service for credit customers on account for Birr 1500.
13. July 25, 2010 paid cash Birr 800 for salary.
14. July 28, 2010, paid cash Birr 1200 for the owner's withdrawal.

Required
1. Record the necessary journal entries?
2. Prepare ledger account by using T- Account?
3. Prepare trial balance?
4. Prepare financial statement such; income statement, statement of owners’ equity and balance
sheet?

1
 1. General journal

Date Description P.R Debit Credit

July 1 Cash 35,200
2010 capital 35,200
July 2 Pre paid rent 2,700
2010 cash 2,700
July 5 Cash 4,000
2010 Service income 4,000
July 7 Equipment 2,500
2010 Account payable 2,500
July 10 Cash 1,000
2010 Account receivable 1,000
July 11 Salary expense 720
2010 cash 720
July 12 Miscellaneous expense 300
2010 cash 300
July 13 Account payable 1,000
2010 cash 1,000
July 16 Cash 3,000
2010 Service income 3,000
July 20 Supplies 900
2010 cash 900
July 24 Miscellaneous expense 250
2010 cash 250
July 25 Account receivable 1,500
2010 Service income 1,500
July 25 Salary expense 800
2010 cash 800
July 28 Withdrawal 1,200
2010 cash 1,200

2
 2. Ledger account using T-account
11 cash 12 account receivable
35,200 2,700 1,500 1,000
4,000 72 BAL= 1,500-1,000
1,000 300 BAL= 500
3,000 1,000
BAL= 43,200-7,870 900
BAL= 35,330 250
800
1,200

13 supplies 14 pre paid rent

900 2,700
BAL= 900 BAL= 2,700

15 equipment 21 account payable

2,500 1000 2,500

BAL= 2,500 BAL= 2,500-1000

BAL= 1500

31 capital 32 withdrawal

35,200 1,200

BAL= 35,200 BAL= 1,200

41 service income 51 salary expense 52 miscellaneous expense

4000 720 300

3000 800 250

1,500 BAL= 1,520 BAL= 550

BAL= 8,500

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 Aynalem Garage

Trial balance

July 28, 2010

Cash 35,330 00
Account receivable 500 00
Supplies 900 00
Pre paid rent 2,700 00
Equipment 2,500 00
Account payable 1,500 00
Capital 35,200 00
Withdrawal 1,200 00
Service income 8,500 00
Salary expense 1,520 00
Miscellaneous expense 550 00
Total 45,200 00 45,200 00

4. Prepare financial statement such; income statement, statement of owners’ equity and balance sheet?
Aynalem Garage
Income statement
For the month ended July 28, 2010
Revenue
Service income 8,500
Less: expenses
Salary expense 1,520
Miscellaneous expense 550
Total expense 2,070
Net-income 6,430
Aynalem Garage
Statement of owner’s equity
For the month ended July 28, 2010
Beginning capital 35,200
Additional investment 0
Net-income 6,430
Subtotal 41,630

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Less: withdrawal 1,200
Owner’s equity 40,430
Aynalem Garage
Balance sheet
For the month ended July 28, 2010

Asset Liability
Cash 35,330 Account payable 1,500
Account receivable 500 Owners equity
Supplies 900 Capital 40,430
Prepaid rent 2,700
Equipment 2,500
Total asset 41,930 Total liability and owners equity 41,930
Project 2

Zenith Laundry, owned by Belete Mola, is a sole proprietorship business, which provides clothes
washing services. The business has been in operation for the last two years. The trial balance of the
business for the year ended December 31, 2002 is shown below
Zenith Laundry
Trial balance
December31,2002

Cash 2,425 00
Laundry supplies 1,870 00

Prepaid insurance 820 00

Laundry equipment 37,650 00

Accumulated depreciation 9,700 00

Account payable 925 00

Belete Mola, capital 22,180 00

Belete Mola, drawing 10,000 00

Laundry revenue 39,125 00

Wage expense 12,415 00

Rent expense 3,600 00

Utility expense 2,715 00

Miscellaneous expense 435 00

71,930 00 71,930 00

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 Zenith Laundry
Trial balance
December31, 2002

Account title Trial balance adjustments Adjusted trial Income

balance statement
1 Cash 2,425 2,425
2 Laundry supplies 1,870 1,390 480
3 Prepaid insurance 820 315 505
4 Laundry equipment 37,650 37,650
5 Acc. Depreciation 9,700 1,950 11,650
6 Account payable 925 925
7 Belete mola capital 22,180 22,180
8 Belete mola drawing 10,000 10,000
9 Laundry revenue 39,125 39,125 39,125
10 Wage expense 12,415 12,555 12,555
11 Rent expense 3,600 140 3,600 3,600
12 Utility expense 2,715 2,715 2,715
13 Miscellaneous expense 435 435 435
71,930 71,930
14 Laundry expense 1,390 1,390 1,390
15 Insurance expense 315 315 315
16 Depreciation expense 1,950 1,950 1,950
17 Wages payable 140 140
3,795 3,795 74,020 74,020 22,960 39,125
Net-income 39,125 - 22,960
= 16,165

Zenith Laundry
Income statement
For the month ended December 31, 2002
Revenue
Laundry revenue 39,125
Less: expenses
Wage expense 12,555
Rent expense 3,600

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 Utility expense 2,715
Miscellaneous expense 435
Laundry expense 1,390
Insurance expense 315
Depreciation expense 1,950
Total expense 22,960
Net-income 16,165
Zenith Laundry
Statement of owner’s equity
For the month ended December 31, 2002
Beginning capital 22,180
Add: Additional investment 0
Net-income 16,165
Subtotal 38,345
Less: withdrawal 10,000
Owner’s equity 28,345
Zenith Laundry
Balance sheet
For the month ended December 31, 2002

Asset Liability
Cash 2425 Account payable 925
Laundry Supplies 480 Acc. Depreciation 11,650
Prepaid insurance 505 Wage payable 140
Laundry Equipment 37,650 Total liabilities 12,715
Total asset 41,060 Owners equity
Capital 28,345
Total liability and owners equity 41,060

April 7, 2022