F.A MID TERM PAPER :p

Department of Computer Science, University Of Karachi

BSCS (Final Year) (BSCS-607 – Financial Accounting)

Name: Seat No: 0

1) Security Service Company adjusts its accounts at the end of month. On November 30, adjusting entries are prepared to record:

a) Depreciation Expense for November.
b) Interest Expense that has accrued during November.
c) Revenue earned during earned November that has not yet been billed to customers.
d) Salaries, payable to company employees, which have accrued.
e) The portion of the company’s prepaid insurance that has expired during November.
f) Earning portion of the amount collected in advance from a customer.

Indicate the effect of each adjusting entries on the major elements of the company’s financial statements – that is upon revenues, expenses, net income, assets, liabilities and owner equity. The answer for adjusting entry a is provided as an example. Symbols I for increase, D for Decrease, and NE for no effect.

Adjusting Entries	Income Statement			Balance Sheet
	Revenue - Expenses		= Net Income	Assets =	Liab + OE
a	NE	I	D	D	NE	D
b
c
d
e
f

2) The accounts of Martinez Political Consulting at December 31, 20X6, follow:

Accounts payable $ 5,100 Angel Martinez, capital, Accounts receivable 6,600 December 31, 20X5 $ 59,800 Accumulated depreciation— Angel Martinez, withdrawals 50,400 building 37,800 Note payable, long-term 27,800 Accumulated depreciation— Other assets 3,600 computers 11,600 Other current liabilities 4,700 Advertising expense 2,200 Prepaid insurance 1,100 Building 104,400 Prepaid rent 6,600 Cash 16,500 Salary expense 24,600 Service revenue 93,500 Salary payable 3,900 Computers 22,700 Supplies 2,500 Depreciation expense 1,300 Supplies expense 5,700 Insurance expense 800 Unearned service Interest payable 600 revenue 5,400 Interest expense 1,200

Required: All adjustments have been journalized and posted, but the closing entries have not yet been made. Prepare the company's classified balance sheet in report format at December 31, 20X6. Show totals for total assets, total liabilities, and owner's equity.

Department of Computer Science, University Of Karachi

BSCS (Final Year) (BSCS-607 – Financial Accounting)

Name: Seat No: 0

1) From the following selected accounts of Hyundai Energy at June 30, 20X4, prepare the entity's closing entries:

Liu Hyundai, capital $ 21,600 Interest expense $ 2,200 Service revenue 101,100 Accounts receivable 14,000 Unearned revenues 1,350 Salary payable 850 Salary expense 12,500 Depreciation expense 10,200 Accumulated depreciation 35,000 Rent expense 5,900 Supplies expense 1,700 Liu Hyundai, withdrawals 40,000 Interest revenue 700 Supplies 1,400

What is Hyundai's ending capital balance at June 30, 20X4?

2) Data for the unadjusted trial balance of Links Resorts at December 31, 20X2, follow:

Cash $ 3,000 Horst Schulz, capital $49,100 Other current assets 9,400 Horst Schulz, withdrawals 51,800 Property, plant, Service revenue 93,600 and equipment 66,200 Salary expense 42,700 Accumulated depreciation 21,800 Depreciation expense Accounts payable 6,100 Supplies expense Salary payable Insurance expense Unearned service revenue 5,300 Utilities expense 2,800

Adjusting data at the end of the year include the following:

1. Unearned service revenue that has been earned, $3,600.
2. Accrued service revenue, $8,100
3. Supplies used in operations, $600.
4. Accrued salary expense, $1,400.
5. Insurance expense, $1,800.
6. Depreciation expense, $2,900.

Horst Schulz, the owner, has received an offer to sell the company. He needs to know the following information within one hour: Net income for the year covered by these data. Without opening any accounts or making any journal entries, provide Schulz with the requested information. Prepare an income statement, and show all computations.