To complete accounting cycle, consider the following list of selected transactions. The transactions were completed by Bati
Question:
To complete accounting cycle, consider the following list of selected transactions. The transactions were completed by Bati Service Center in the year of 2016.
a) January 2,AtoYimer took Birr 1000,000 from his personal savings and deposited it in the name of Bati service center.
b) February 1,Bati service center borrowed 50,000birr 3 years commercial loan at 12% annually, interests payable annually.
c) February 28, Purchased office equipment priced at 6,000birr, giving a 10% promissory note, maturity date July 1, 2016, in exchange.
d) March 2, Received 4,000birr cash for services rendered.
e) April 11, Purchased office supplies 1,000birr on account.
f) May 10, Paid 1,000birr in cash for the office supplies purchased on April 11.
g) June 15, Purchased truck for 550,000birr in cash for to be used for business travel.
h) July 1, Paid off a short-term liability of 6,200birr.
i) July 1, Rent office space at annual rental fee of 12,000birr, the full amount of annual rental fee was paid in advance.
j) August 15, performed service and send invoice of 30,000birr to client for service rendered.
k) September 15, Collected cash of 30,000birr from client (see August 15).
l) November 15, Signed a 100,000birr service agreement with one client, the service period will be started on February 1, 2017.
m) November 30, Received 30,000birr cash as down payment for service agreement signed on November 15.
n) December 31, determined that employee' salary expense for the year 2016 is 20,000birr and will be paid on Jan. 10, 2017.
o)Placed order for 2,000birr additional office supplies to be delivered on January 10, 2017. (Assuming the purchase order is based on F.O.B. Destination).
The data needed to determine year-end adjustments are as follows:
1.Adjustment for accrued interest for 3years 12% commercial loan borrowed on February 1, 2016 at December 31, 2016
2.Estimated depreciation of equipment for the year, 1000 birr.
3.The book value for the office supplies on hand at December 31, 2016 is 250 birr.
4.Estimated depreciation of truck for the year, 10,000 birr.
5.Accrued rent expense is 6000 birr
Instruction:
ü Record the journal entries
ü Prepare ledger (post to ledger account)
ü Prepare trial balance
ü Prepare adjusting entries and adjusted trial balance
Expert Answer:
Date Particulars Ledger Folio Debit Credit January 2 Bank Ac To AtoYimer Ac 1000000 100000... View the full answer
