بسم الله الرحمن الرحيم Assignment 1 Marks 375 10 Points Cour

بسم الله الرحمن الرحيمassignment1marks375 10 Pointscourse Titleprin

Prepare a concise and clear version of the assignment instructions by removing any non-essential details such as submission deadlines, formatting specifics, and procedural notes. Only include the core tasks and necessary context for completing the assignment.

Answer all questions based on the provided data. Include your personal details (Name, Student ID, CRN, Date of submission). Submit your answers in MS Word format using Times New Roman, 14-point font. The assignment must be completed individually and submitted via the Blackboard System. Late submissions will receive zero, and plagiarism will result in zero marks.

Paper For Above instruction

Question 1

Prepare the balance sheet for ALOMARI Delivery Service from the following account information as of December 31 (amounts in dollars):

• Accounts receivable: $10,000
• Accounts payable: $18,000
• Building: $28,000
• Common stock: $30,000
• Cash: $8,000
• Notes payable: $45,000
• Office equipment: $12,000
• Trucks: $55,000
• Retained earnings: ?

Question 2

Given the balances for Lance’s Consulting Firm, Inc. as of December 31, determine the Net Income. The accounts are:

• Accounts payable: $6,400
• Wages expense: $35,000
• Accounts receivable: $7,000
• Rent expense: $5,000
• Cash: $10,000
• Retained earnings: $68,700
• Office supplies: $1,000
• Land: $53,000
• Building: $99,000
• Unearned revenue: $7,000
• Supplies expense: $15,000
• Dividends: $20,000
• Consulting revenue: $150,000
• Common stock: $12,900

Question 3

Record journal entries for Dolly Barton’s transactions in October:

1. Invested $10,000 cash and $15,000 of computer equipment for common stock.
2. Paid $500 for a 12-month insurance premium.
3. Completed a word processing assignment and received $1,000 cash.
4. Paid $200 for office supplies.
5. Paid $2,000 for October’s rent.

Question 4

Enter transactions for ABC Company to avoid adjusting entries at period end. Provide the journal entries, including adjusting entries on December 31, 2017:

1. Acquired an insurance policy for two years on April 1, 2017, for $8,000.
2. Received rent of $12,000 for six months starting November 1, 2017.

Ensure all journal entries are properly recorded and include the necessary adjustments at year-end without requiring reversal entries.

Paper For Above instruction

Financial Statements and Transactions Analysis

Financial accounting involves the systematic recording, summarizing, and reporting of financial transactions of an entity. It provides stakeholders with essential information about the financial position and performance of a business. This paper addresses various aspects of accounting through a series of questions designed to assess understanding of balance sheets, income statement calculations, journal entries, and adjusting entries.

Question 1: Preparing a Balance Sheet for ALOMARI Delivery Service

The first task involves constructing a balance sheet from given account balances for ALOMARI Delivery Service as of December 31. A balance sheet is a snapshot of a company's financial position at a specific point in time, comprising assets, liabilities, and shareholders' equity.

Given the account balances, the assets include accounts receivable ($10,000), building ($28,000), cash ($8,000), office equipment ($12,000), and trucks ($55,000). Liabilities consist of accounts payable ($18,000) and notes payable ($45,000). The equity section includes common stock ($30,000) and retained earnings (unknown and to be calculated).

The calculation of retained earnings requires adjusting the accounting equation: Assets = Liabilities + Equity. Summing assets: $10,000 + $28,000 + $8,000 + $12,000 + $55,000 = $113,000. Total liabilities: $18,000 + $45,000 = $63,000. Therefore, Retained Earnings = Assets - Liabilities - Common Stock = $113,000 - $63,000 - $30,000 = $20,000.

The completed balance sheet will include all assets, liabilities, and equity components, ensuring the fundamental accounting equation balances.

Question 2: Calculating Net Income for Lance’s Consulting Firm

Net income reflects the profitability of a business over a period. It is calculated as revenues minus expenses. Using the provided data, total revenues are from consulting services: $150,000. Expenses include wages ($35,000), rent ($5,000), supplies ($15,000), and possibly other operational expenses.

The total expenses sum to $55,000 ($35,000 + $5,000 + $15,000). Therefore, net income equals total revenues minus total expenses: $150,000 - $55,000 = $95,000.

This net income figure indicates the firm’s profitability during the year, useful for assessing performance and planning future strategies.

Question 3: Journal Entries for Dolly Barton’s October Transactions

Proper recording of journal entries is fundamental to maintaining accurate financial records. The transactions are straightforward and involve common accounting practices:

1. Investment in common stock: Debit Cash ($10,000) and Office Equipment ($15,000); Credit Common Stock ($25,000).
2. Prepaid insurance: Debit Prepaid Insurance ($500); Credit Cash ($500).
3. Service rendered and cash received: Debit Cash ($1,000); Credit Service Revenue ($1,000).
4. Office supplies purchased: Debit Office Supplies ($200); Credit Cash ($200).
5. Prepaid rent for October: Debit Rent Expense ($2,000); Credit Cash ($2,000).

These entries accurately reflect the transactions and provide the foundation for financial statement preparation.

Question 4: Entries for ABC Company to Prevent Reversing Adjustments

To ensure no reversing entries are needed at period end, transactions should be entered in a manner that the adjustments at year-end are inherently reflected. For insurance, the initial entry records the full amount as an asset, and the adjusting journal on December 31 recognizes the expense accrued.

1. Acquisition of a two-year insurance policy: Initially, record the full amount as a prepaid asset:

• Debit Prepaid Insurance ($8,000); Credit Cash ($8,000)

At year-end, record the insurance expense for the elapsed period (nine months from April 1 to December 31):

• Debit Insurance Expense ($6,000); Credit Prepaid Insurance ($6,000)

2. Rent received for six months starting November 1: Record the receipt of rent:

• Debit Cash ($12,000); Credit Unearned Revenue ($12,000)

At December 31, recognize the earned portion (two months):

• Debit Unearned Revenue ($4,000); Credit Rent Revenue ($4,000)

These entries ensure the financial statements accurately reflect the expenses incurred and revenue earned, matching the periods when they are related.

Conclusion

Understanding core accounting principles, correct journal entry procedures, and proper adjustment techniques are crucial for accurate financial record-keeping. The exercises demonstrated the practical application of these concepts, emphasizing the importance of precision and compliance in accounting practices. Mastery of these foundational skills facilitates reliable financial reporting, strategic decision-making, and regulatory adherence in the business environment.

References

• Craig, R. (2019). Principles of Financial Accounting. McGraw-Hill Education.
• Albrecht, W. S., et al. (2018). Accounting Principles. Cengage Learning.
• Kimmel, P. D., et al. (2020). Financial Accounting: Tools for Business Decision Making. Wiley.
• Wild, J. J., et al. (2021). Financial Accounting. McGraw-Hill Education.
• Gibson, C. H. (2017). Financial Reporting and Analysis. South-Western College Pub.
• Horngren, C. T., et al. (2019). Introduction to Financial Accounting. Pearson.
• Schroeder, R. G., et al. (2020). Financial Accounting Theory and Analysis. Cengage Learning.
• Harrison, W. T., & Horngren, C. T. (2018). Financial Accounting. Pearson Education.
• Stickney, C. P., et al. (2018). Financial Accounting: An International Perspective. Cengage.
• Spiceland, J. D., et al. (2021). Financial Accounting with International Financial Reporting Standards. McGraw-Hill Education.