Department of Managment

Masters of Business Adminstration

Course: Financial and Managerial Accounting

By: Anteneh

Submitted to (Instructor):- Kirubel Asegidew (Ass Prof)

Date---------------

---------------, Ethiopia

Answer key
1. Instruction: Show your computation (NB. Neatness and clear
presentations has its own values)

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 Individual assignment Financial and Managerial Accounting

Required: Journalize the March transactions.

Post
Date Description Ref Debit Credit
March 1 Cash 120, 000 00
               Nuru Meda, Capital 120, 000 00
3 Land 20, 000 00
Building 44, 000 00
Equipment 12, 000 00
00
Cash 76, 000
5 Advertising expense 3,200 00
Cash 3200 00

6 Prepaid insurance 2480 00

Cash 2480 00

5 Supplies 468 00
Account payable 468 00

10 Equipment 5000 00
Account payable 5000 00

18 Cash 2400 00
Golf revenue 2400 00

25 Dividends 2000 00
Cash 2000 00

30 Salary expense 1800 00

Cash 1800 00

30 Account payable 5000 00

Cash 5000 00

31 Cash 1500 00
Golf revenue 1500 00

2. A. Journalize for the adjusting entries

i. Adjusting entries for Insurance expense
Insurance expense 9000
Prepaid insurance 9000

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 Individual assignment Financial and Managerial Accounting

ii. Adjusting entries to record supply expense

Supply expense 3900
Supply 3900
iii. Adjusting entries to record Depreciation expense
Depreciation expense 9600
Prepaid insurance-building 9600
Depreciation expense 3200
Prepaid insurance-building 3200
iv. Adjusting entries to record Unearned rent revenue
Unearned rent revenue 7600
Earned rent revenue 7600
v. Adjusting entries to record salary expense
Salary expense 750
Salary payable 750
vi. Adjusting entries to record Rent revenue
Rent receivable 1600
Rent revenue 1600
vii. Adjusting entries to record Interest expense
Interest expense 20000
Interest payable 20000

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 2 B. Haile Resort
Work Sheet

For Month Ended August 31, 2022

Account Title Trial balance Adjustments Adjusted trial balance
Debit Credit Debit Credit Debit Credit
Cash Br. 39,200 00 39200 00

Prepaid Insurance 9,000 00 9000 00 0 00

Supplies 5,200 00 3900 1300 00

Land 40,000 00 40,000 00

Buildings 240,000 00 240,000 00

Equipment 32,000 00 32,000

Accounts Payable Br. 9,000 00 9000 00

Unearned Rent 9,200 00 7600 00 1600

Revenue
Mortgage Payable 100,000 00 100,000 00

Share Capital— 200,000 00 200,000

Ordinary
Retained Earnings 0 00 0
Dividends 10,000 00 10,000 00

Rent Revenue 172,400 00 7600 00 180000 00

Salaries and 89,600 00 750 00 90350 00
Wages Expense
Utilities Expense 18,400 00 18,400 00

Maintenance and 7,200 00 7,200 00

Repairs Expense
Br.490,600 00 Br.490,600 00

Supplies expense 3900 00 3900 00

Insurance expense 9000 00 9000 00
Depreciation expense 9600 00 12800 00
3200
Interest expense 20000 20000 00
Accumulated 9600 00 9600 00
Depreciation-building

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 Individual assignment Financial and Managerial Accounting

Accumulated 3200 00
Depreciation-equipment
Salaries payable 750 00 750 00
Interest payable 2000 00 20000
0

Haile Resort
Adjusted Balance
August 31, 2022
Debit Credit
Cash Br. 39,200
Supplies 1,300
Land 40, 000
Buildings 240,000
Accumulated Depreciation-building 9, 600
Equipment 32,000
Accumulated Depreciation- Equipment 3, 200
Accounts Payable Br. 9,000
Salaries payable 750
Interest payable 20, 000
Unearned Rent Revenue 1, 600
Mortgage Payable 108, 350
Share Capital—Ordinary
Br.352, 500 Br.152, 500

3. A. Journalize for the adjusting entries

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 Individual assignment Financial and Managerial Accounting

1. Adjusting entries for received service revenue

Cash 12000
Account receivable 12000
2. Adjusting entries to record Service revenue
Account receivable 9800
Service revenue 9800
3. Adjusting entries to record bad debt expense
Bad debt expense 2860
Allowance for doubtful account 2860
4. Adjusting entries to record Insurance expense
Insurance expense 960
Prepaid insurance 960
5. Adjusting entries to record depreciation expense
Depreciation expense 5000
Accumulated depreciation-equipment 5000
6. Adjusting entries to record note receivable
Note receivable 14, 400
Cash 14, 400
7. Adjusting entries to record rent expense
Prepaid Rent 20000
Cash 20000
8. Adjusting entries to record salary expense
Salary expense 5020
Salary payable 5020
Soft Tech, Consulting Engineer Trial
Balance

5
 Soft Tech, Consulting Engineer Trial
Work Sheet
For Month Ended December 31, 2022
Account Title Trial balance Adjustments Adjusted total balance Statement of profit or Statement of financial
loss position
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit

Cash 59,000 00 12000 00 14400 00 36600 00 36600 00

00
20000

Accounts 99,200 00 9800 00 12000 00 97000 00 97000 00

Receivable

Allowance for 00 1,500 2860 00 4360 00 4360 00

Doubtful
Accounts

Supplies 3,920 00 3920 3920

Prepaid 2,200 00 960 00 1240 00 1240 00

Insurance

Equipment 50,000 00 50,000 00 50,0 00

00

Accumulated 12500 00 5000 00 17500 00 17500 00

Depreciation—
Equipment

Notes Payable 14400 00 14400 00 14400 00

Share, Capital 104,020 00 104,020 00 104,020 00

Dividend 34,000 00 34000 00 34000 00

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 Individual assignment Financial and Managerial Accounting

Service Revenue 200,0 9800 00 20980 00

00 0

Rent Expense 19,500 00 20000 00 39500 00

Salaries and 61,000 00 61,000 00

Wages Expense

Utilities Expense 2,160 00 2,160 00

Office Expense 1,440 00 1,440 00

332,420 00 332,420 00

Supplies expense 9800 00 9800 00 9800 00

Insurance expense 960 00 960 00 960 00

Depreciation 5000 00 5000 00 5000 00

expense

Notes receivable 14400 00 14400 00

Bad debt expense 2860 00 2860 00

Prepaid rent 20000 00

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 A. Income statement
Soft Tech, Consulting Engineer Trial
Income statement
For Month Ended December 31, 2022

Revenue
Service revenue 209800
Expense
Salaries and Wages Expense 61000
Rent expense 39500
Salary expense 9800
Insurance expense 960
Depreciation expense 5000
Bad debt expense 2860
Utilities Expense 2,160
Office Expense 1,440
Total expense (122720)
Net income 87080

B. Statements of owner’s equity

Soft Tech, Consulting Engineer Trial
Statements of owner’s equity
For Month Ended December 31, 2022
Beginning Arian’s capital 0
Add Additional investment 104,020
Less Net Income 87080
Sub totals 191100
Less Withdrawal (34000)
Ending Arian’s capital 157100

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 Individual assignment Financial and Managerial Accounting

C. Balance sheet
Soft Tech, Consulting Engineer Trial
Balance sheet
For Month Ended December 31, 2022
Account title Debit Credit
Cash
36600
Accounts Receivable
97000
Notes receivable
14400
Prepaid rent 20000
Allowance for Doubtful 4360
Accounts
Supplies
3920
Prepaid Insurance
1240
Equipment
50,000
Accumulated 17,500
Depreciation—Equipment
Notes Payable 14,400
Share, Capital 186900
Total 223160 223160

4. A) Journalize the March transactions.

Post
Date Description Ref Debit Credit
March, 1 Cash 35, 000 00
2021.                Arian, Capital 35, 000 00
1 Truck 6000 00
Cash 2000 00
400
Account payable 4000
3 Supplies 1500 00
Account payable 1500 00

5 Prepaid insurance 1200 00

00

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 Individual assignment Financial and Managerial Accounting

Cash 1200
14 Account receivable 4800 00
Service revenue 4800 00

18 Account payable 2000 00

Cash 2000 00

20 Salary Expense 7000 00

Cash 7000 00

21 Cash 3800 00
Account Receivable 3800 00

28 Account Receivable 2500 00

Service revenue 2500 00

31 Advertise expense 2000 00

Cash 2000 00

31 Dividend 3000 00
Cash 3000 00

b) Prepare necessary Ledger Accounts.

Cash Account receivable
35, 000 2000 4800 3800
3800 1200 2500
2000 7300 3800
7000 3500
2000
3000
38, 800 17, 200 Truck
21, 600 6000

Supplies Prepaid insurance

1500 1200

Account payable Salary Expense

2000 4000 7000

1500
3500
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 Individual assignment Financial and Managerial Accounting

Advertise Expense Dividend

2000 3000

Service Revenue Arian Capital

4800 35000
2500
7300

C) Prepare a Trial Balance at March 31

Arian’s Carpet Cleaners
Trial Balance
March 31, 2021
Cash 21600 00
Accounts receivable 3500 00
Supplies 1500 00
Prepaid insurance 1200 00
Truck 6000 00
Accounts payable 3500 00
Arian’s, Capital 35000 00
Dividend 3000 00
Service Revenue 7300 00
Advertise expense 2000 00
Salary expense 7000 00

45800 00 45800 00

Journalize and post the adjusting entries

9. Adjusting entries for unbilled service revenue

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 Individual assignment Financial and Managerial Accounting

Account receivable 1000

Service revenue 1000
10. Adjusting entries to record depreciation expense
Depreciation expense 200
Accumulated depreciation 200
11. Adjusting entries to record insurance expense
Insurance expense 100
Prepaid insurance 100
(Hint 1200*1/12=100)
12. Adjusting entries to record supply expense
Supply expense 1100
Supply 1100
(Hint 1500-400=1100)
13. Adjusting entries to record salary expense
Salary expense 700
Salary payable 700

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 Arian’s Carpet Cleaners
Work Sheet

For Month Ended March 31, 2021

Account Title Trial balance Adjustments Adjusted total balance Statement of profit or Statement of financial
loss position
Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit
Cash 21600 00 21600 00 2160 00
0
Accounts 3500 00 1000 00 4500 00 4500 00
receivable
Supplies 1500 00 1100 00 400 00 400 00

Prepaid insurance 1200 00 100 00 1100 00 1100 00

Truck 6000 00 6000 00 6000 00

Accounts payable 3500 00 3500 00 3500 00

Arian’s, Capital 35000 00 35000 00 35000 00

Dividend 3000 00 3000 00 3000 00

Service Revenue 7300 00 1000 00 8300 00 8300 00

Advertise expense 2000 00 2000 00 2000 00

Salary expense 7000 00 700 00 7700 00 7700 00

45800 00 45800 00
Supplies expense 1100 00 1100 00 1100 00
Insurance expense 100 00 100 00 100 00

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 Individual assignment Financial and Managerial Accounting

Depreciation 200 00 200 00 200 00

expense
Accumulated 200 00 200 00 200 00
Depreciation
Salaries payable 700 00 700 00 700 00
3100 00 3100 00 47700 00 47700 00 11100 00 8300 00 00

        Net Loss 2800 00 2800 00

11100 00 11100 00 39400 00 39400 00

D. Income statement
Arian’s Carpet Cleaners
Income statement
For Month Ended March 31, 2021
Revenue
Service revenue 8300
Expense
Advertise expense 2000
Salary expense 7000
Supply expense 1100
Insurance expense 100
Depreciation expense 200
Total expense (11100)
Net Loss (2800)

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 Individual assignment Financial and Managerial Accounting

E. Statements of owner’s equity

Arian’s Carpet Cleaners
Statements of owner’s equity
For Month Ended March 31, 2021
Beginning Arian’s capital 0
Add Additional investment 35000
Less Net loss (2800)
Sub totals 32200
Less Withdrawal (3000)
Ending Arian’s capital 29200

F. Statement of cash flow

Arian’s Carpet Cleaners
Statement of cash flow
For Month Ended March 31, 2021
Cash flows from operating activities:
Cash received from customers...................................................... Birr 3800
Deduct cash payments for expenses and
Payments to creditors........................................................ (12200)
Net cash flow from operating activities...................................... Birr (8400)
Cash flows from investing activities:
Cash payments for acquisition of Equipment....................................... (2000)

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 Individual assignment Financial and Managerial Accounting

Cash flows from financing activities:

Investment by owner ............................ Birr 35,000
Deduct: cash withdrawal by owner........................ (3000)
Net cash flow from financing activities............................................................32000
Net cash flow May 31, 2014 and cash balance..........................................Birr 21600

G. Balance sheet
Arian’s Carpet Cleaners
Balance Sheet
For Month Ended March 31, 2021
Account title Debit Credit
Cash 21600
Accounts receivable 4500
Supplies 400
Prepaid insurance 1100
Truck 6000
Accumulated-depreciation 200
Accounts payable 3500
Salary payable 700
Arian’s, Capital 29200
Balance 33600 33600

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