prepare the august profit and loss account statement of retained earnings and balanc 654849

Aug 30, 2021 | Uncategorized

The Complete Accounting Cycle

Anil Mathew started Mathew Adwaves Ltd to provide advertising services and completed the following transactions during the first two months:

July 1

Began business by depositing Rs.20,000 in the company’s bank account in exchange for 2,000 shares of RS.10 each.

1

Paid three months’ rent in advance, Rs.3,000

1

Paid the premium on a one year insurance policy, Rs.900

5

Bought office equipment on credit from Kiran Company, Rs.6,000, payable in two equal instalments on July 31 and August 31

7

Brought office supplies for cash, Rs.2,390

8

Bought art supplies on credit from Fairdeal Company, Rs.4,510

9

Billed customers for services provided, Rs.6,800

18

Received cash for services to be provided later, Rs.1,800

27

Received cash from customers billed on July 9, Rs.4,900

29

Paid salaries for July, Rs.2,100

31

Paid Kiran Company Rs.3,000

Aug. 1

Billed customers for services provided, Rs.7,400

3

Received cash from customers billed on July 9, Rs.1,900

5

Provided services for cash received on July 18

9

Paid customers for art supplies, Rs.2,100

13

Bought office supplies for August, Rs.2,300

17

Received cash from customers billed on August 1.

24

Bought office supplies for cash, Rs.1,300

29

Paid salaries for August, Rs.2,300

30

Paid dividend, Rs.120

31

Paid Kiran Company, Rs.3,000

Required

a. Prepare journal entries to record the July transactions.

b. Open the necessary ledger accounts and post the July journal entries.

c. Prepare a trial balance for July on a worksheet form, and complete the worksheet using the following information:

    1. One month’s rent has expired, Rs.1,000
    2. One month’s insurance has expired, Rs.75
    3. Inventory of unused office supplies, Rs.1,790
    4. Inventory of unused art supplies, Rs.1,830
    5. Estimated depreciation on office equipment, Rs.100
    6. Estimated income tax, Rs.120

d. Prepare the July profit and loss account, statement of retained earnings and balance sheet.

e. Prepare and post the July adjusting and closing entries

f. Prepare the July post closing trial balance

g. Prepare and post journal entries to record the August transactions

h. Prepare a trial balance for August on a worksheet form, and complete the worksheet using the following information:

    1. One month’s rent has expired, Rs.1,000
    2. One month’s insurance has expired, Rs.75
    3. Inventory of unused office supplies, Rs.1,990
    4. Inventory of unused art supplies, Rs.3,240
    5. Estimated depreciation on office equipment, Rs.100
    6. Estimated income tax, Rs.915

i. Prepare the August profit and loss account, statement of retained earnings and balance sheet.

j. Prepare and post the August adjusting and closing entries

k. Prepare the August post closing trial balance