The following Financial transactions that occurred in Al Rayan Company during the year 2021:

1- Al-Rayyan Company purchased additional equipment worth 106,000$ cash.

2- The company purchased a building for the amount of 706,000 $ cash, after the approval of the Board of Directors on the expansion policy of the company.

3- The company completed a consultancy project and handed it to the client for 536,000$ cash.

4- The company purchased equipment by paying 81,000 $ cash and signing notes payable worth 231,000 $.

5- The company has completed consulting services worth 76,000$, and the amount will be collected within 30 days.

6- The company purchased office supplies for 12,000 $ on the account.

7- The company completed consulting services worth 99,000 $, paid on account.

8- Al Rayan Company received 35,000 $ as a partial payment from a customer.

9- The company paid 29,000 $ cash to settle the account payable.

10- The company paid 56,000 $ as savings for equipment maintenance.

11- The company paid an amount of 46000 $ to publish advertisements in the local newspaper during the month of October.

12- The company paid 306,000 $ cash as salary expenses.

13- It was found from the analysis of the insurance policy that the insurance coverage amounted to 11,000 $ had expired.

14- It was found from inventory physical count that there was a cost of supplies worth 46,000 $ at the end of the month.

15- The annual depreciation of equipment is 156,000 $.

16- The useful life of the buildings is 15 years and they have no residual value.

17- The company has 7 employees and each of them gets their salaries at the end of each month. The employees did not receive their salaries for the month of December 2021 and they will be received on January 4 of the year 2022, and the total monthly salaries are 180,000 $

18- The company provided consulting services worth 156,000 $, which the client had previously paid the amount in a previous period.

• Required:

1- Preparing journal entries, settlement entries, and posting to the ledger (note. The opening balances in the balance sheet for the year 2020 must be taken into account (

2- Preparing the adjusted trial balance

3- Preparing the three financial statements (the income statement, the statement of owner equity, and the balance sheet for the year 2021).

 

Transcribed Image Text:

Al Rayan Company balance sheet As on December 31, 2020 In USA dollar 1,258,000 408,000 Assets Current assets cash Account receivable Supplies Prepaid Insurance Total current assets Property, plant and equipment equipment Subtract: accumulated depreciation Total property, plant and equipment total assets Liabilities current Liabilities Account payable Notes payable unearned revenue salaries and wages payable total Liability Owner equity capital Total liabilities and equity 1,428,000 328,000 208,000 163,000 2,127,000 850,000 2,977,000 528,000 328,000 308,000 184,000 1,348,000 1,629,000 2,977,000 Al Rayan Company balance sheet As on December 31, 2020 In USA dollar 1,258,000 408,000 Assets Current assets cash Account receivable Supplies Prepaid Insurance Total current assets Property, plant and equipment equipment Subtract: accumulated depreciation Total property, plant and equipment total assets Liabilities current Liabilities Account payable Notes payable unearned revenue salaries and wages payable total Liability Owner equity capital Total liabilities and equity 1,428,000 328,000 208,000 163,000 2,127,000 850,000 2,977,000 528,000 328,000 308,000 184,000 1,348,000 1,629,000 2,977,000

Answer rating: 100% (QA)

Question I Journal Entry Date Account Title 1 Equipment Cash To record purchase of equipment by cash ... View the full answer