Okasha Muhsin was a Malaysian pilot of Oman Airs. During Covid 19, when airlines business hit hard,
Question:
Okasha Muhsin was a Malaysian pilot of Oman Airs. During Covid 19, when airlines business hit hard, Okasha also lost his job and repatriated back to Malaysia. He tried hard to rejoin some other airlines but as the pandemic remained affected till two years he could not get his luck anywhere else. After a long joblessness and difficult time, instead of getting hopeless, he and his wife Sakeena decided to start a small business.
Sakeena suggested a Burger parlor as within their leftover savings and some financial support from their friends they can manage such kind of star-ups. After doing market research and peer-discussion, they have realized that they can start their business from coming month onwards.
Following are the summary of transactions happened:
May 1, Okasha invested $40,000 cash in his business
May 1, paid a $24000 cheque for renting an outlet suitable for his business.
May 3, purchased second hand equipment (burner, fryer, oven and chiller) worth $2200 on cash $ 2800 on account.
May 5, paid $3600 cash for a 1 year insurance policy effective from May 1
May 12, started his parlor and got a sale of $ 9000
May 18, paid $ 3000 cash on amount owed to a supermarket and $ 2800 an amount owed to second hand equipment’s shop
May 20, paid $3600 cash to Sakeena as a compensation for continuous help.
May 21, earned cash $ 6800 from customers.
May 25, billed a customer $ 12000 after providing catering service for his party.
May 31, paid $ 700 for gas and electricity bills.
May 31 withdrew $ 11200 cash for personal use.
By the end of the month Okasha realized that his business is expanding and it needs a proper chart of accounts. You are as his trustworthy friend and graduate with accounting knowledge.
Instructions
Journalize and post the May transactions.
Prepare a trial balance at May 31.
Enter the following adjustments.
Unbilled and uncollected revenue for catering performed at May 31 were $5400.
Depreciation on equipment for the month was $1000.
A grocery account shows $1200 of supplies on hand at May 31.
Accrued but unpaid salaries were $2,000.
One-twelfth of the insurance expired.
Prepare the income statement and owner’s equity statement for May and a classified balance sheet at May 31.
Journalize and post adjusting entries.
Journalize and post-closing entries and complete the closing process.
Prepare a post-closing trial balance at July 31.
Expert Answer:
Journalize and post the May transactions Date Account Particulars Debit Credit 01May Okasha invested 40000 cash in his business Cash 4000000 Okasha Ca... View the full answer
