Mr. Mazin started a business in the month of March 2020. He has to prepare a financial statement at the end of the month for review of the operation of his business. The following transactions are given below. You are required to help Mr. Mazin to prepare his financial statement.

March 1. Invested a cash of RO 50,000 and land worth RO 20,000 to start a new business

March 2. Purchased machinery and other equipment’s on account RO 15,000

March 3. Purchased office supplies for cash RO 1,500

March 3. Purchased insurance policy for the building RO. 960 for one year.

March 4. Decided to recruit a helper next month.

March 8. Provided services to a client RO 2,000 and received 60% of the amount and remaining after two months

March 10. Service provided to another client Mr. Salim RO 1,200 but he agreed to pay later.

March 12. Purchased Office supplies for cash RO 5,000

March 14. Mr. Mazin agreed to purchase a new machinery for RO 5,800 in the month of December 2020.

March 15. Received remaining cash from the client services provided on March 8th .

March 17. He purchased a new car RO 12,000 for personal use with his own money.

March 17. He purchased a new television for RO 889 with the money given by his father.

March 18. Provided services to another client for RO 500 and he paid only RO. 150 remaining, he agreed to pay next month.

March 22. Purchased a packing machine and returned it back on the same day as it was defective OMR 299.

March 25. Paid cash RO. 5000 for the machinery purchased on March 2nd .

March 28. Took money from the business for personal use RO 1,200

March 30. Received amount from the customer whose service is provided on March10th..

March 31. Paid wages for the month RO 3000

March 31. Planned to purchase additional office supplies for RO 4,580 next month.

March 31. Received water and electricity bill for the month RO. 89.

From the above transaction you are required to prepare:

1. Analyze the transaction by using accounting equation. 

2. Prepare the Journal entries for the month of March. 

3. Post the entries and calculate the balances. 

4. Use the balances to prepare the unadjusted trial Balance. 

5. After completing the Unadjusted trial balance use the below information to prepare the Adjusted Trial Balance. 

Additional information

a. The revenue earned but not recorded at the end of the month is RO 2,000

b. Insurance expense for the month RO 80

c. The machinery has a useful life of 5 years and a residual value of RO 500.

d. Office supplies at the end of the month 3200.

e. Depreciation on all fixed asset to be provided 6% of the asset value.

6. Use the adjusted Trial Balance to prepare Income statement, statement of owners’ equity and statement of financial Position.