The Complete Accounting Cycle
Raju Designs Ltd. completed the following transactions during the first two months:
|
Nov 1 |
Deposited Rs.50,000 in the bank in the company’s bank account in exchange for 5,000 shares of RS.10 each. |
|
1 |
Paid one months’ rent, Rs.2,000 |
|
1 |
Paid the premium on a one year insurance policy, Rs.2,400 |
|
3 |
Bought office equipment for cash. Rs.3,000 |
|
5 |
Brought office supplies on credit, Rs.3,460 |
|
9 |
Received cash for services provided, Rs.4,900 |
|
15 |
Paid assistant’s salary for the first fortnight, Rs.700 |
|
18 |
Billed customers for services provided, Rs.4,300 |
|
20 |
Paid creditors for office supplies, Rs.2,300 |
|
28 |
Paid electricity bill for the month, Rs.270 |
|
29 |
Received cash from customers billed on November 18, Rs.3,100 |
|
29 |
Paid assistant’s salary for the second fortnight, Rs.700 |
|
30 |
Paid dividend, Rs.1,000 |
|
Dec. 1 |
Paid monthly rent, Rs.2,000 |
|
7 |
Bought office supplies on credit, Rs.1,900 |
|
9 |
Billed customers for services provided, Rs.7,800 |
|
10 |
Received cash from customers billed on Nov 18, Rs.1,200 |
|
15 |
Paid assistant’s salary for the first fortnight, Rs.700 |
|
18 |
Paid creditors for office supplies, Rs.1,500 |
|
29 |
Paid electricity bill for the month, Rs.310 |
|
30 |
Paid office assistant’s salary for second fortnight, Rs.700 |
|
31 |
Paid dividend, Rs.1,200 |
Required
1. Prepare journal entries to record the November transactions.
2. Open the necessary ledger accounts and post the November journal entries.
3. Prepare a trial balance for November on a worksheet form, and complete the worksheet using the following information:
- One month’s insurance has expired, Rs.200
- Inventory of unused office supplies, Rs.2,910
- Estimated depreciation on office equipment, Rs.50
- Estimated income tax, Rs.1,500
4. Prepare the November profit and loss account, statement of retained earnings and balance sheet.
5. Prepare and post the November adjusting and closing entries
6. Prepare the November post closing trial balance
7. Prepare and post journal entries to record the December transactions
8. Prepare a trial balance for December on a worksheet form, and complete the worksheet using the following information:
- One month’s insurance has expired, Rs.200
- Inventory of unused office supplies, Rs.4,050
- Estimated depreciation on office equipment, Rs.50
- Estimated income tax, Rs.1,400
8. Prepare the December profit and loss account, statement of retained earnings and balance sheet.
9. Prepare and post the August adjusting and closing entries
10. Prepare the December post closing trial balance