AIN SHAMS UNIVERSITY

FACULTY OF ENGINEERING
CREDIT HOURS ENGINEERING PROGRAMS
Basic Science

Spring 2023

ASU323: Introduction to Accounting

Assignment 2
Answer the following question:
Question 1:
• Prepare journal entries for the transactions
• Post transactions to the accounts in the general ledger
• Prepare Income Statement, Statement of Owner’s Equity, and Balance Sheet
• Adjust all the accounts for one month period, then prepare the adjusted Income
Statement, Statement of Owner’s Equity, and Balance Sheet
Given the following transactions for a factory:
1. Dec. 1st: The owner invested $150,000 to start the business
2. Dec. 1st: Paid $50,000 to rent the factory building for one year
3. Dec. 3rd: Buy a stock of raw material for $90,000 cash
4. Dec. 5th: Borrowed $350,000 from a bank (with 13% interest)
5. Dec. 5th: Purchased office supplies for $300 to be paid Jan. 1st
6. Dec. 7th: Buy $300,000 worth of machines to start production. Paid $100,000 cash and
$200,000 to be paid on 5 years (assume the lifetime = 10 years with $15,000 salvage value)
7. Dec. 18th: Used $30,000 worth of material for the production
8. Dec. 18th: Used $50 of the supplies
9. Dec. 21st: Sell products for $55,000 cash
10. Dec. 22nd: Billed $25,000 for products to be paid
11. Dec. 25th: Paid $10,000 wages
 AIN SHAMS UNIVERSITY, FACULTY OF ENGINEERING
Basic Science, i-Credit Hours Engineering Programs
Spring 2023 Assignment 2
ASU323: Introduction to Accounting
Assignment 2 2/2

Question 2:

Given the following transactions for a Factory:

• Two Partners invested total $500,000, to start the business.
• They get $1,000,000 loan from a bank with yearly interest of 24%
• They paid $300,000 for one year of rent.
• They paid $900,000 cash to buy Machines (the machines have no salvage value after 15
years)
• Get $2,000,000 worth raw materials. With paying only $100,000 Cash.
• For the first month, they paid $40,000 in wages.
• For the first month, the factory consumes $200,000 worth raw materials.
• The factory sells products with $300,000 in cash.
• The factory delivers products with $150,000 without receiving the money yet.
If the Owners want to check on the business after the first month, answer the following questions
for them:

1 The “Cash” account is balanced at …….

a) $40,000 b) $610,000 c) $460,000 d) None of them
2 The “Rent Expense” account is adjusted to …….
a) $25,000 b) $300,000 c) $250,000 d) None of them
3 The “Machine Depreciation” is …….
a) $75,000 b) $5,000 c) $60,000 d) None of them
4 The “Loan interest” for this month is …….
a) $240,000 b) $83,333 c) $20,000 d) None of them
5 The total “Revenues” are equal …….
a) $300,000 b) $450,000 c) $150,000 d) None of them
6 The total “Expenses” are equal …….
a) $290,000 b) $90,000 c) $250,000 d) None of them
7 Net Income is equal …….
a) $10,000 b) $360,000 c) $165,000 d) None of them
8 The Owners’ equity is equal …….
a) $500,000 b) $665,000 c) $1,665,000 d) None of them
9 The total “Assets” are equal …….
a) $3,580,000 b) $3,780,000 c) $1,800,000 d) None of them
10 The total “Liabilities” are equal …….
a) $1,000,000 b) $2,920,000 c) $1,920,000 d) None of them