ACCT 2010 Principles of Accounting I

Take home assignment # 1 (Topic: Accounting Equation Applications)

Instructions to Students:

1. Students should complete the assignment on his or her own, i.e., on

individual basis.
2. Each student should submit a separate written paper of not more than 3
pages of A4 papers (all appendixes and references inclusive, if any)
3. No cover page is necessary
4. Font type/Size: Times New Roman/11
5. 1.5 lines spacing
6. Save your file as .doc or .docx for submission purpose; and name your file
using session number-SID.doc or .docx, e.g., L7-20965312.doc
7. Assessment criteria: approach to questions; articulation of arguments; clear
discussion; writing style and approach; report organization and references
8. The assignment accounts for 7.5% of total course assessment
9. Deadline for submission: 30 September 2022 – Submit the completed
assignment to the online course platform – canvas; by 5:00 p.m.

Course Instructor: Dr. MAK Kelvin P.

Lecture sessions: L7, L8 and L9
Subject: Assignment #1 – Accounting Equation Applications
Date: 23rd September 2022

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Take home exercise #1: ACCT 2010 Principles of Accounting I – 2022 Fall Semester
Deadline for submission: 30 September 2022, by 17:00 via Canvas submission
Question 1: 25 marks

ABC Company Limited (“ACL”), which was recently incorporated, is engaging in a trial-run stage which it
has come preliminary transactions before commencing its full-scale operations for retailing household
furnishings. The balances of each item in the company’s accounting equations are given below for August
1 and for each of the next 9 business days.

Furniture Store Accounts Owners’

August Cash
Inventory Fixtures Payable Equity
$ $ $ $ $
1 5,000 18,000 2,000 3,000 22,000
2 11,000 18,000 2,000 3,000 28,000
3 11,000 18,000 6,000 3,000 32,000
4 8,000 21,000 6,000 3,000 32,000
5 8,000 27,000 6,000 9,000 32,000
6 11,000 27,000 3,000 9,000 32,000
7 6,000 27,000 9,000 10,000 32,000
8 4,000 27,000 9,000 8,000 32,000
9 4,000 26,600 9,000 7,600 32,000
10 1,000 26,600 9,000 7,600 29,000

State briefly what you think took place on each of the 9 days commencing August 2, assuming that only
transaction happened each day. The first one was done for you as an example below:

Example:

August 2: Owners invested $6,000 additional cash in ACL

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Question 2: 25 marks

Jacobson Corporation’s balance sheet at March 30, 2022, contained only the following items (appended
below in random order):

$ $
Cash 14,000 Accounts payable 8,000
Notes payable 10,000 Furniture & fixtures 3,000
Inventories 40,000 Long-term debt 12,000
Additional Paid-in Capital 80,000 Building 24,000
Land 14,000 Machinery & equipment 15,000

On March 31, 2022, these transactions and events took place:

1. Purchased merchandise on account, $3,000

2. Sold at cost for $1,000 cash some furniture that was not needed
3. Issued additional capital stock for machinery and equipment valued at $12,000
4. Purchased land for $25,000, of which $10,000 was paid in cash, the remaining being represented
by a 5-year note (long-term debt)
5. The building was valued by professional appraisers at $43,000

Prepare in good and proper form a balance sheet for March 31, 2022, showing supporting computations
for all new amounts.

Guidelines to students:

a. A vertical balance sheet presentation is the right form, please refer to sample balance sheet of
Chipotle Mexican Grill, Inc. we discussed in the class.
b. No journal entries are required.
c. You are required to show your computations for account balance movements of the following:
i. Cash: $14,000 ……
ii. Inventories:
iii. Furniture & fixtures:
iv. Machinery & equipment:
v. Land:
vi. Accounts payable:
vii. Long-term debt:
viii. Additional Paid-in Capital:
d. Building above was a self-use property, NOT a rental property.