Professional Documents
Culture Documents
School of Commerce
Department of Accounting & Finance
Fundamentals of Accounting II Assignmnet
Sales Data:
Date Units Selling price Total
February 12 800 Br.140 Br.112,000
March 5 1,200 135 162,000
18 1,400 130 182,000
June 22 500 150 75,000
July 1 900 155 139,500
September 26 1,800 145 261,000
December 11 1,300 150 195,000
Total 7,900 1,126,500
1
@ INSTRUCTIONS:
Answer the following questions accordingly.
A. Using the periodic inventory system; determine the cost of the inventory
on December 31, year 4, under the following inventory costing methods:
i) First - In - First out
ii) Average cost
B. Determine the gross profit for the year under each of the above methods
asked in A (i) & A (ii).
C. Using the perpetual inventory system ; determine the cost of the
inventory on December 31, 2003, under the following inventory costing
methods:
i) First - In - First out
ii) Average cost
D. Determine the gross profit for the year under each of the above methods
asked in C (i) & C (ii).
2
their basic earnings. The labour union contribution is facilitated by the
company and, therefore, is included in the company accounting record.
ð All employees, except Ayenew Teklay agreed to contribute a fixed $25,
on a monthly basis as Edir/social contribution, this is off the company
books.
ð All workers are expected to work 160 hrs / month.
Instruction: Based on the above data prepares the payroll sheet for the
company, and record payment to salary to all employees appropriately. The
gross earning of all employees, the total deduction from each employee and
the net pay of all employees should be shown in your computations clearly.
Instructions:
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liabilities:
Required: Prepare journal entry to record the investments.
Required: Prepare journal entry to record the investments.
Solution: 3
i) To record the investment of Alemu:
Q5. Suppose Jemal & Hamdu have capital balance in the year 2001 as
follows:
Jemal Hamdu
Capital balance as on January 1, 2001 Br. 60,000 Br 40,000
Capital balance as on December 31, 2001 65,000 35,000
The net income of the partnership is Br. 50,000 for the year 2001.
Required: Compute the share of net income for Jemal & Hamdu under the
following conditions,
if
a) Jameal & Hamdu agree to share net income or loss on the basis of
Beginning capital account balances
b) Jemal & Hamdu agree to share net income or loss based on ending
capital account balances.
Q6. Samuel & Tofiq partnership contract provides annual salary allowance
for Samuel Br.100, 000 and Tofiq Br. 60,000 respectively. The net income
for the year is Br.300, 000. Assume that the salaries are paid monthly
during the year.
Required: Compute the share of net income for each partner.
Q7. Sultan and Tilahun partnership contract provides, that Sultan and
Tilhanu (i) have monthly salaries of Br. 2,500 and Br. 2,000 respectively;
(ii) are allowed interest at 12% on their capital balances at January 1 of the
current fiscal year, which amounted to Br. 80,000 and Br. 60,000
respectively; and (iii) divide the remainder of net income equally. The
partnership generated net income for the year is Br. 75,000.
Required:
a) Divide the above net income for Partners of Sultan & Tilahun for the
year.
b) Assume the above illustration continuous, and the partnership generated
net income for the year is Br. 50,000. Required: Divide the above net
income for partners of Sultan & Tilahun for the year.
Q8. Assume that partners Tezera & Umer have capital balance of Br. 50,000
each (a total Br. 100,000) on June 1. Each sells one-fifth (1/5) of his
respective equity to Solomon for Br. 10,000 in cash.
Required:
a) Prepare journal entry to record the admission of Solomon
b) Compute the total capital of the partnership after admission.
4
Q9. Assume Dawit and Elias are partners, share net income or loss equally
and that each has a capital account balance of Br. 60,000. Assume also that
the carrying amounts of partnership assets are approximately equal to
current fair values. On June 1, Fikadu invests own land that had a cost of
Br. 30,000 and Br. 20,000 cash. Dawit and Elias agree to admit Fikadu to
the partnership by investment of land and cash; net income and losses of
the new partnership are to be shared equally. The land has a market value
of Br. 40,000.
Required:
a) Compute the partnership total capital before admission of Fikadu
b) Prepare the entry to record Fikadu’s admission.
c) Determine total capital of the partnership after admission.
Q10. Assume Siraj and Tilahun are partners, share net income or loss
equally. Each has a capital account balance of Br. 50,000. Assume also that
the carrying amounts of partnership assets are approximately equal to
current fair values. On June 1, Umer invests Br. 50,000 cash. Siraj and
Tilahun agreed to admit Umer. Assume that the balance of land account had
been Br. 70,000 before Umer’s admission and its current market value is Br.
90,000.
Required:
1. a) Determine total capital of old partnership before dissolution.
2. b) Prepare the entry to record the adjusted capital account balances
after revaluation
5
Q12. After closing the accounts on June 1, prior to liquidating the
partnership, the capital account balances of Girm, Helen and Israel are Br.
13,000, 26,000 and 31,000 respectively. Cash, noncash assets, and
liabilities total Br. 17,000, 83,000 and Br 30,000 respectively. Between
June 1 and June 30, the noncash assets are sold for Br 41,000, the
liabilities are paid, and the remaining cash is distributed to the partners.
The partners share net income and loss in the ratio of 1:2:3.
Required: Distribute the cash for each partner and record the necessary
journal entries to liquidate the partnership for the period June 1- 30.
Q14. On March 10, Alem Company issued for cash 5,000 shares of no- par
common stock (with stated value of Br.10) a Br 14 and on August 7 it issued
for cash 1,000 shares of Br 50 par preferred stock at Br 54.
Required
a) Give the entries for March 10 and August7. Assume that the common
stock is to be credited with the stated value.
b) What is the total amount invested by all stockholders as of August 7?
6
Required:
A) Record the transactions of January 11, July2, and December 19
B) What is the balance in Pain-in-Capital from sale of Treasury stock on December 31 of
the current year?
C) Where will the balance in paid-in-Capital from sale of treasury stock e reported on the
Q16. The stockholders equity and related accounts of Elias Manufacturing
balance sheet?
Corporation as of November 1, 1990, the beginning of the fiscal year, are as
4. follows:
The stockholders equity and related accounts of Elias Manufacturing Corporation as of
November 1, 1990, the beginning of the fiscal year, are as follows:
Preferred stock subscription receivable--------------------------------- Br 120,000
Preferred 8% stock, Br 50 par (100,000 shares authorized
20,000 shares issued) ------------------------------------------------ 1000,000
Preferred stock subscribed (3,000 shares) ---------------------------- 150,000
Paid in capital in excess of pare-- Preferred stock 80,000
Common stock, Br 25 par (500,000 shares authorized,
100,000 shares issued) ---------------------------------------------- 2,500,000
Paid-in Capital in Excess of par-Common stock--------------------- 600,000
Retained earnings----- --------------------------------------------------- 3,150,000
161
During the fiscal year ended October 31, 1991 Elias Manufacturing Corporation
completed the following transactions
Downloaded by affecting
Kalkidan Shashigo stockholders' equity:
(kalkidan9@gmail.com)
Required:
1. Prepare the journal entries to record the transactions listed, identifying
each transaction by the appropriate letter.
2. Prepare the stockholders' equity section of Elias Manufacturing Company
balance sheet as October 31, 1991. The beginning retained earning balance
must be increased by the net income for the year, Br 710,000, and reduced by
the dividends declared and paid, Br 280,000