RUSANGU UNIVERSITY

School of Business
ACCT 110 – Introduction of Accounting and Non-Profit of Accounting
December 2023
Assignment
1. Genesis Company performs the following accounting tasks during the year.
1. ________Analyzing and interpreting information.
2. ________Classifying economic events.
3. ________Explaining uses, meaning, and limitations of data.
4. ________Keeping a systematic chronological diary of events.
5. ________Measuring events in dollars and cents.
6. ________Preparing accounting reports.
7. ________Reporting information in a standard format.
8. ________Selecting economic activities relevant to the company.
9. ________Summarizing economic events.
Accounting is “an information system that identifies, records, and communicates the economic events of
an organization to interested users.”
Required:
Categorize the accounting tasks performed by Genesis as relating to either the identification (I), recording
(R), or communication (C) aspects of accounting.

2. The following are users of financial statements.

1. ________Customers
2. ________Securities and Exchange Commission
3. ________Internal Revenue Service
4. ________Store manager
5. ________Labor unions
6. ________Suppliers
7. ________Marketing manager
8. ________Vice president of finance
9. ________Production supervisor
Required:
Identify the users as being either external users or internal users.

3. Selected transactions for Green Care Company are listed below.

1. Made cash investment to start business.
2. Paid monthly rent.
3. Purchased equipment on account.
4. Billed customers for services performed.
5. Withdrew cash for owner’s personal use.
6. Received cash from customers billed in (4).
7. Incurred advertising expense on account.
Required:
List the numbers of the above transactions and describe the effect of each transaction on
assets, liabilities, and owner’s equity. For example, the first answer is: (1) Increase in assets
and increase in owner’s equity.

4. Blessing Banda started a new business and completed these transactions during December 2022.
Dec. 1 Blessing Banda transferred K56,000 cash from a personal savings account to a checking
account in the name of Banda Investment.
Dec.2 The company rented office space and paid K800 cash for the December rent.
Dec. 3 The company purchased K14,000 of electrical equipment by paying K3,200 cash and
agreeing to pay the K10,800 balance in 30 days.
Dec. 5 The company purchased office supplies by paying K900 cash.
Dec. 6 The company completed electrical work and immediately collected K1,000 cash for these
services.
Dec. 8 The company purchased K3,800 of office equipment on credit.
Dec.15 The company completed electrical work on credit in the amount of K4,000.
Dec.18 The company purchased K500 of office supplies on credit.
Dec.20 The company paid K3,800 cash for the office equipment purchased on December 8.
Dec.24 The company billed a client K600 for electrical work completed; the balance is due in 30
days.
Dec.28 The company received K4,000 cash for the work completed on December 15.
Dec.29 The company paid the assistant’s salary of K1,200 cash for this month.
Dec.30 The Company paid K440 cash for this month’s utility bill.
Dec.31 Blessing Banda withdrew K700 cash from the company for personal use.

Required
1. Prepare Journal entries for December 2022.
2. Post the transactions to the T-accounts, using transaction dates as posting references in the ledger
accounts. Label the balance of each account Bal.
3. Prepare the trial balance of Banda Investment at December 2022.
4. Prepare the Income statement for the December 2022.
5. Prepare the statement of owner’s equity for the December 2022.
3. Prepare the balance sheet as on December 2022.

1. I – Analyzing and interpreting information.

2. R – Classifying economic events.
3. C – Explaining uses, meaning, and limitations of data.
4. R – Keeping a systematic chronological diary of events.
5. I – Measuring events in dollars and cents.
6. C – Preparing accounting reports.
7. C – Reporting information in a standard format.
8. I – Selecting economic activities relevant to the company.
9. R – Summarizing economic events.

In this context:
- Identification (I) refers to recognizing and selecting economic activities relevant to the
organization.
- Recording ® involves classifying, keeping a systematic diary, and summarizing economic events.
- Communication © includes explaining, preparing reports, and reporting information in a
standard format.
1. External – Customers
2. External – Securities and Exchange Commission
3. External – Internal Revenue Service
4. Internal – Store manager
5. External – Labor unions
6. External – Suppliers
7. Internal – Marketing manager
8. Internal – Vice president of finance
9. Internal – Production supervisor

In this context:
- External users are individuals or entities outside the organization, such as customers, government
agencies (like SEC and IRS), labor unions, and suppliers.
- Internal users are individuals within the organization, such as store manager, marketing manager, vice
president of finance, and production supervisor.

1. (1) Increase in assets (Cash) and increase in owner’s equity (Owner's capital).
2. (2) Decrease in assets (Cash) and decrease in owner’s equity (Owner's capital).
3. (3) Increase in assets (Equipment) and increase in liabilities (Accounts payable).
4. (4) Increase in assets (Accounts receivable) and increase in owner’s equity (Revenue).
5. (5) Decrease in assets (Cash) and decrease in owner’s equity (Owner's capital).
6. (6) Increase in assets (Cash) and decrease in assets (Accounts receivable).
7. (7) Increase in expenses (Advertising expense) and increase in liabilities (Accounts payable).

Explanation:
1. Investing cash to start the business increases the assets (cash) and owner's equity.
2. Paying monthly rent decreases the assets (cash) and owner's equity.
3. Purchasing equipment on account increases assets (equipment) and liabilities (accounts payable).
4. Billing customers for services performed increases assets (accounts receivable) and owner's equity
(revenue).
5. Withdrawing cash for personal use decreases assets (cash) and owner's equity.
6. Receiving cash from customers billed increases assets (cash) and decreases assets (accounts
receivable).
7. Incurring advertising expense on account increases expenses (advertising expense) and liabilities
(accounts payable).

Here is a table with the journal entries for the transactions in December 2022:

Date
Account Titles and Explanation
Debit (K)
Credit (K)
Dec. 1
Cash
56
,
000
Owner’s Capital
56
,
000
Dec. 2
Rent Expense
800
Cash
800
Dec. 3
Electrical Equipment
14
,
000
Cash
3
,
200
Accounts Payable
10
,
800
Dec. 5
Office Supplies
900
Cash
900
Dec. 6
Cash
1
,
000
Service Revenue
1
,
000
Dec. 8
Office Equipment
3
,
800
Accounts Payable
3
,
800
Dec. 15
Accounts Receivable
4
,
000
Service Revenue
4
,
000
Dec. 18
Office Supplies
500
Accounts Payable
500
Dec. 20
Office Equipment
3
,
800
Cash
3
,
800
Dec. 24
Accounts Receivable
600
Service Revenue
600
Dec. 28
Cash
4
,
000
Accounts Receivable
4
,
000
Dec. 29
Salaries Expense
1
,
200
Cash
1
,
200
Dec. 30
Utilities Expense
440
Cash
440
Dec. 31
Owner’s Drawings
700
Cash
700
Date
Dec. 1
Dec. 2
Dec. 3
Dec. 5
Dec. 6
Dec. 8
Dec. 15
Dec. 18
Dec. 20
Dec. 24
Dec. 28
Dec. 29
Dec. 30
Dec. 31

Account Titles and Explanation

Cash
Owner’s Capital
Rent Expense
Cash
Electrical Equipment
Cash
Accounts Payable
Office Supplies
Cash
Cash
Service Revenue
Office Equipment
Accounts Payable
Accounts Receivable
Service Revenue
Office Supplies
Accounts Payable
Office Equipment
Cash
Accounts Receivable
Service Revenue
Cash
Accounts Receivable
Salaries Expense
Cash
Utilities Expense
Cash
Owner’s Drawings
Cash

Debit (K)
56,000
800
14,000
3,200
900
1,000
3,800
4,000
500
3,800
600
4,000
1,200
440
700

Credit (K)
56,000
800
10,800
900
1,000
3,800
4,000
500
3,800
600
4,000
1,200
440
700

Note: The table presents the journal entries in a simplified format. Each entry includes the date, account
titles, and the corresponding debit and credit amounts. The accounts affected by each transaction are also
indicated.

Certainly! Here are the T-account tables for the relevant accounts:

Cash:
Date
Description
Debit (K)
Credit (K)
Dec. 1
Owner’s Capital
56
,
000
Dec. 2
Rent Expense
800
Dec. 3
Electrical Equipment
3
,
200
Dec. 5
Office Supplies
900
Dec. 6
Service Revenue
1
,
000
Dec. 20
Office Equipment
3
,
800
Dec. 28
Accounts Receivable
4
,
000
Dec. 29
Salaries Expense
1
,
200
Dec. 30
Utilities Expense
440
Dec. 31
Owner’s Drawings
700
Bal.
64
,
760
6
,
540
Date
Dec. 1
Dec. 2
Dec. 3
Dec. 5
Dec. 6
Dec. 20
Dec. 28
Dec. 29
Dec. 30
Dec. 31
Bal.

Description
Owner’s Capital
Rent Expense
Electrical Equipment
Office Supplies
Service Revenue
Office Equipment
Accounts Receivable
Salaries Expense
Utilities Expense
Owner’s Drawings
Debit (K)
56,000
3,200
1,000
3,800
4,000
700
64,760

Credit (K)
800
900
1,200
440
6,540

Owner's Capital:
Date
Description
Debit (K)
Credit (K)
Dec. 1
Cash
56
,
000
Bal.
56
,
000
Date
Dec. 1
Bal.

Description
Cash

Debit (K)
56,000
Credit (K)
56,000

Rent Expense:
Date
Description
Debit (K)
Credit (K)
Dec. 2
Cash
800
Bal.
800
Date
Dec. 2
Bal.

Description
Cash

Debit (K)

Credit (K)
800
800

Electrical Equipment:
Date
Description
Debit (K)
Credit (K)
Dec. 3
Cash
3
,
200
Bal.
3
,
200
Date
Dec. 3
Bal.

Description
Cash

Debit (K)
3,200
3,200

Credit (K)

... and so on for each relevant account.

These T-account tables provide a visual representation of the changes in each account as a result of the
listed transactions. The balance is calculated at the end of each line to reflect the cumulative effect of the
transactions up to that point.

The trial balance is a list of all the accounts and their respective balances (debit or credit) at a specific
point in time. Here's the trial balance for Banda Investment at December 2022:

Account Title
Debit (K)
Credit (K)
Cash
64
,
760
Rent Expense
800
Electrical Equipment
3
,
200
Office Supplies
900
Service Revenue
1
,
000
Office Equipment
3
,
800
Accounts Receivable
4
,
000
Salaries Expense
1
,
200
Utilities Expense
440
Owner’s Drawings
700
Owner’s Capital
56
,
000
Total
78
,
460
61
,
540
Account Title
Cash
Rent Expense
Electrical Equipment
Office Supplies
Service Revenue
Office Equipment
Accounts Receivable
Salaries Expense
Utilities Expense
Owner’s Drawings
Owner’s Capital
Total

Debit (K)
64,760
3,200
1,000
3,800
4,000
700
78,460

Credit (K)
800
900
1,200
440
56,000
61,540

The trial balance ensures that the accounting equation (Assets = Liabilities + Owner's Equity) is in
balance. In this case, the total debits equal the total credits, indicating that the accounting records are
mathematically correct.

Income Statement for December 2022:

Revenue
Service Revenue
1
,
000
Expenses
Rent Expense
800
Salaries Expense
1
,
200
Utilities Expense
440
Total Expenses
2
,
440
Net Income
−
1
,
440
Revenue
Service Revenue
Expenses
Rent Expense
Salaries Expense
Utilities Expense
Total Expenses
Net Income

1,000
800
1,200
440
2,440
−1,440

Statement of Owner's Equity for December 2022:

Owner’s Capital, Dec. 1
56
,
000
Add: Investments
Dec. 1 - Cash
56
,
000
Subtotal
112
,
000
Less: Drawings
Dec. 31 - Owner’s Drawings
700
Net Capital at Dec. 31
111
,
300
Owner’s Capital, Dec. 1
Add: Investments
Dec. 1 - Cash
Subtotal
Less: Drawings
Dec. 31 - Owner’s Drawings
Net Capital at Dec. 31

56,000
56,000
112,000
700
111,300

Explanation:

The income statement shows the revenues and expenses for the month, resulting in a net loss of -1,440 K.
The statement of owner's equity details the changes in the owner's capital account, taking into account the
initial capital, additional investments, and owner's withdrawals. The net capital at the end of December
2022 is 111,300 K.

The balance sheet, also known as the statement of financial position, provides a snapshot of a company's
financial position at a specific point in time. Here's the balance sheet for Banda Investment as of
December 2022:

**Balance Sheet as of December 2022:**

```
Banda Investment
Balance Sheet
As of December 31, 2022

Assets:
-----------------
Cash 64,760 K
Electrical Equipment 3,200 K
Office Supplies 900 K
Office Equipment 3,800 K
Accounts Receivable 4,000 K
-----------------
Total Assets 76,660 K

Liabilities:
-----------------
Accounts Payable 11,300 K
-----------------
Total Liabilities 11,300 K

Owner's Equity:
-----------------
Owner's Capital 112,000 K
Less: Owner's Drawings 700 K
Net Capital 111,300 K
-----------------
Total Liabilities and Equity 122,600 K
```

Explanation:
- **Assets:** This section lists the resources owned or controlled by the company. In this case, it includes
cash, electrical equipment, office supplies, office equipment, and accounts receivable.

- **Liabilities:** This section represents the company's obligations or debts. Here, it includes accounts
payable.

- **Owner's Equity:** This section shows the owner's claim on the company's assets. It includes the
owner's capital (initial investment and additional investments) and subtracts owner's drawings.

The balance sheet demonstrates the fundamental accounting equation: Assets = Liabilities + Owner's
Equity. In this case, the equation holds true with total assets equaling total liabilities and owner's equity.