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 | | | |
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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:
- Unearned service revenue that has been earned, $3,600.
- Accrued service revenue, $8,100
- Supplies used in operations, $600.
- Accrued salary expense, $1,400.
- Insurance expense, $1,800.
- 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.
