CLASS EXERCISES-SESSION-1,2

Learning Objective:
1. What is accounting?
2. The Accounting Equation.
3. Users of Accounting.
. !o" to #o transactiona$ ana$%sis?
&. !o" to 're'are journa$ entr%.
(. !o" to 'ost entries in $e#ger accounts.
). !o" to 're'are tria$ ba$ance.
*o. + *o. ,age *o.
1 2A-1 .3
2 2A-( .(
3 2/-& ..
+ *o.1 Use following title of accounts to complete journal entries of given transactions.

CASH A/C RECEIVABE A/C !A"ABE RE#$ E%!E#SE
&RA'I#( CA!I$A SAARIES E%!E#SE E)UI!*E#$
+UR#I$URE SERVICE I#C,*E SU!!IES
-. *r.A /eposite/ into 0an1 Rs.234333 to start a 0usiness
5. !ai/ rent for t6ree mont6s at Rs.5233 per mont6
7. Boug6t office e8uipment from B9Co. for Rs. -33334 pai/ to t6em Rs.7333
an/ promise/ to pa: t6e 0alance after two mont6s.
;. Ren/ere/ services to clients an/ receive/ cas6 Rs. 2333
2. !urc6ase supplies for cas6 Rs. ;33
<. !ai/ salaries to staff Rs.2;33
=. Boug6t furniture for Rs. 75334pai/ to >9Co. Rs.-533 an/ promise/ to pa:
0alance after one mont6
?. 'it6/rew cas6 for personal use Rs. 7333
@. Bille/ to #asir for services ren/ere/ Rs. -5233
-3. Receive/ from #asir Rs.2333
0*1T2U3T0O*
AA !repare journal entries
BA !ost to le/ger accounts
CA !repare a trial 0alance at Bul: 7-45332
+ *o.2
'rite four steps of anal:sis for eac6 transaction
-. *r. A6me/ investe/ cas6 Rs. -524333
5. Boug6t merc6an/ise for cas6 Rs.53333
7. !ai/ rent for t6e mont6 Rs.2333
;. !urc6ase office supplies for Rs.-233
2. Sol/ goo/s for cas6 Rs.2333
<. !urc6ase goo/s on cre/it from #asir Ali Rs.-3333
=. !ai/ salaries to office staff Rs. -5233
?. !ai/ to #asir Ali Rs.7233
@. Sol/ goo/s on cre/it to A0i/ Rs.-2333
-3. *erc6an/ise return to #asir Ali Rs.523
--. (oo/s were returne/ 0: A0i/ Rs.=23
-5. 'it6/rew cas6 for personal use Rs.-333
-7. Sol/ ol/ mac6ine at Rs.233
+ *o.3
In Bul: 53324 #asir Bamal starte/ 0usiness an/ complete/ following transactions.

Bul: - He /eposite/ C -<24333 cas6 in a 0usiness 0an1 account.Duse cas6 as title.
Bul: 5 !urc6ase/ e8uipment for C 224333 from ABC Co. pai/ C534333 an/
0alance will 0e pai/ after t6ree mont6.
Bul: = !ai/ rent for t6ree mont6s C -233
Bul: -5 !urc6ase goo/s on cre/it from >6an 9 Co. C -533
Bul: -= !ai/ salaries to staff C 5233
Bul: 53 !ai/ to >6an 9 Co.C =33
Bul: 57 !ai/ insurance C ;33
Bul: 5= #asir wit6/rew C -233 cas6 from t6e 0usiness for personal use
0*1T2U3T0O*
AA !repare journal entries
BA !ost to le/ger accounts
CA !repare trial 0alance at Bul: 7-45335
+- Compute t6e missing amount in t6e accounting e8uation for eac6 entit:A
Assets Liabi$ities O"ner4s Equit%
3o5'an% A C E C<-4?33 C7;4;33
3o5'an% / <24@33 E 7;4;33
3o5'an% 3 ?-4=33 =@4?33 E
+-& Orac$e 3or'oration starte/ -@%@ wit6 total assets of C24?-@ million an/ total
lia0ilities of C54?<- million. At t6e en/ of -@%@4 ,racleFs total assets stoo/ at C=45<3
million4 an/ total lia0ilities were C742<2 million.
Required
-. &i/ t6e ownersF e8uit: of ,racle Corporation increase or /ecrease /uring -@%@E
B: 6ow muc6E
5. I/entif: two possi0le reasons for t6e c6ange in ownersF e8uit: of ,racle /uring
t6e :ear.
+-( $elemar1eting AssociatesF 0alance s6eet /ata at *a: 7-4 53%54 an/ Bune 734 53%54
followA
6a% 317 2892 :une 387 2892
$otal assets C-234333 C-@24333
$otal ia0ilities -3@4333 -7-4333
Required
+ollowing are t6ree assumptions a0out investments an/ wit6/rawals 0: t6e owner of t6e
0usiness /uring Bune. +or eac6 assumption4 compute t6e amount of net income or net loss
of t6e 0usiness /uring Bune 53%5.
-. $6e owner investe/ C24333 in t6e 0usiness an/ ma/e no wit6/rawals.
5. $6e owner ma/e no a//itional investments in t6e 0usiness 0ut wit6/rew C--4333
for personal use.
7. $6e owner investe/ C;-4333 in t6e 0usiness an/ wit6/rew C<4333 for personal
use.
+. *O. )
-. >6ali/ investe/ in 0usiness cas6 Rs.;33334 office e8uipment Rs.<34333
5. !urc6ase merc6an/ise for cas6 Rs. <333
7. !urc6ase goo/s on cre/it from Ga6i/ Rs.-3333
;. Sol/ merc6an/ise on cre/it to Amir Rs.-3333
2. !ai/ rent eHpense Rs.<33
<. Sol/ merc6an/ise for cas6 Rs. 7233
=. Earne/ commission Rs. -3333
?. !urc6ase supplies on cre/it from Aleem Rs. ?33
@. !ai/ traveling eHpense Rs. <23
-3. Sol/ merc6an/ise to *r. >areem Rs. ;333 on cre/it.
--. >6ali/ wit6/rew cas6 for personal use Rs. 7333
-5. Ren/ere/ services to client an/ receive/ commission Rs. 5333
-7. !ai/ insurance for t6e mont6 Rs. 233
0*1T2U3T0O*
AA !repare journal entries
BA !ost to le/ger accounts
CA !repare a trial 0alance at Bul: 7-45335
+. *O. ;
-. >6ali/ investe/ in 0usiness Rs.;33334 +urniture Rs.5;43334 e8uipment Rs.-2333
5. !urc6ase merc6an/ise for cas6 Rs. <333
7. !urc6ase office stationar: for Rs.5333
;. !urc6ase goo/s on cre/it from Ga6i/ Rs.-3333
2. Sol/ merc6an/ise on cre/it to Amir Rs.-3333
<. !ai/ rent eHpense Rs.<33
=. Sol/ merc6an/ise for cas6 Rs. 7233
?. Bille/ to *r. Bilal for service ren/ere/ Rs. -3333
@. !urc6ase supplies on cre/it from Aleem Rs. ?33
-3. !ai/ traveling eHpense Rs. <23
--. Sol/ merc6an/ise to *r. >areem Rs. ;333 on cre/it.
-5. Receive/ cas6 from *r. >areem Rs.-233
-7. >6ali/ wit6/rew cas6 for personal use Rs. 7333
-;. !ai/ insurance for t6e mont6 Rs. 233
-2. Receive/ cas6 from *r. Bilal Rs.?333
0*1T2U3T0O*
AA !repare journal entries
BA !ost to le/ger accounts
CA !repare a trial 0alance at Bul: 7-45335
+-. Helen Ingersoll owns an/ operates an interior /esign stu/io calle/ Ingersoll
Interiors. $6e following amounts summariIe t6e financial position of 6er 0usiness on
August 7-4 53%5A
Assets J Liabi$ities K
O"ner4s
Equit%
3ash <
Accounts
2eceivab$e < 1u''$ies < Lan# =
Accounts
,a%ab$e <
!e$en
0ngerso$$7
3a'ita$
Bal. 54523 -4233 -54333 ?4333 =4=23
&uring Septem0er 53%54 t6e following events occurre/.
a. Ingersoll in6erite/ C534333 an/ /eposite/ t6e cas6 in t6e 0usiness 0an1 account.
0. !erforme/ services for a client an/ receive/ cas6 of C=33.
c. !ai/ off t6e 0eginning 0alance of accounts pa:a0le.
/. !urc6ase/ supplies on account4 C-4333.
e. Collecte/ cas6 from a customer on account4 C-4333.
f. Investe/ personal cas6 of C-4333 in t6e 0usiness.
g. Consulte/ on t6e interior /esign of a major office 0uil/ing an/ 0ille/ t6e client for
services ren/ere/4 C54;33.
6. Recor/e/ t6e following 0usiness eHpenses for t6e mont6A
-. !ai/ office rent4 C@33.
5. !ai/ a/vertising4 C-33.
i. Sol/ supplies to anot6er 0usiness for C-23 cas64 w6ic6 was t6e cost of t6e
supplies.
j. 'it6/rew cas6 of C-4-33 for personal use.
Required
-. Anal:Ie t6e effects of t6e prece/ing transactions
5. !repare (eneral Bournal entries of a0ove transactions.
7. !repare (eneral e/ger.
;. !repare $rial Balance for t6e mont6 en/e/ Septem0er 7345335
2. !repare t6e income statement of Ingersoll Interiors for t6e mont6 en/e/
Septem0er 734 53%5.
<. !repare t6e 0alance s6eet of Ingersoll Interiors at Septem0er 734 53%5.
+ -18 +ollowing transactions were complete/ 0: *r.>6ali/ /uring t6e mont6 of
Bul:435.
Bul: -A >6ali/ investe/ in 0usiness cas6 Rs.22333 4 office supplies Rs.-2334 office
e8uipment Rs.;2333
Bul:7A ,0taine/ loan from 0an1 Rs.-334333
Bul: 2A !urc6ase office e8uipment from >arim 9Co. for Rs.52333 an/ pai/ Rs.-5333
Bul: -3A !ai/ rent for office premises in a/vance for t6ree mot6s Rs.7333 per mont6.
Bul: -5A !urc6ase goo/s on cre/it from ABC 9 Co. Rs 52333
Bul: -2A Sol/ merc6an/ise to >as6if Rs.2333
Bul: -< !ai/ salaries Rs.;233
Bul: 53A !ai/ to >arim Rs.5333
Bul: 57A Receive/ form >as6if Rs.-233
Bul: 52A !ai/ to ABC 9 Co. Rs.7333
Bul: 5=A !ai/ installment of 0an1 loan Rs 2333
Bul: 73A !ai/ a/vertising eHpense Rs 7333
0*1T2U3T0O*
!repare journal entries4 $ Laccount an/ $rial Balance.
+-11 Recor/ing transactions /irectl: in t6e le/ger4 preparing a trial 0alance

>en *aIanec o0taine/ a corporate c6arter form t6e state of !enns:lvania an/ starte/ a
ca0le television service. &uring t6e first mont6 of operations *aIanec complete/ t6e
following selecte/ transactionsA
a. *aIanec 0egan t6e 0usiness wit6 an investment of C734333 cas6 an/ a 0uil/ing
value/ at C234333. $6e corporation issue/ common stoc1 to *aIanec.
0. Borrowe/ C524333 from t6e 0an14 signe/ a note pa:a0le.
c. !ai/ C754333 for transmitting e8uipment.
/. !urc6ase/ office supplies on account4 C;33.
e. !ai/ emplo:ee salar:4 C-4733.
f. Receive/ C233 for ca0le $V service performe/ for customers.
g. Sol/ ca0le service to customers on account4 C54733.
6. !ai/ C-33 of t6e account pa:a0le create/ in /.
i. Receive/ a C<33 0ill for utilit: eHpense t6at will 0e pai/ in t6e near future.
j. Receive/ cas6 on account4 C-4-33.
1. !ai/ t6e following cas6 eHpenseA
D-. Rent on lan/4 C-4333
D5. A/vertising4 C?33.
l. &eclare/ an/ pai/ /ivi/en/s of C54<33.
2equire#:
-. ,pen t6e following $LaccountsA cas6M Accounts Receive/M ,ffice SuppliesM
$ransmitting E8uipmentM Buil/ingM Accounts !a:a0leM #ote !a:a0leM Common
Stoc1M &ivi/en/sM Service RevenueM Salar: EHpenseM Rent EHpenseM A/vertising
EHpenseM Utilities EHpense.
5. Recor/ t6e a0ove transactions in t6e $Laccounts using a journal. Use t6e letters to
i/entif: t6e transactions.
7. $rial Balance