60.1K

Verified Solution

Link Copied!

In May 2018, Ali started a business of catering equipment and services. The transactions for the month are as follow: 1. Invested $ 5,000,000 to start business and also contributed vehicle of $5,000 to start the operations. 2. Purchased catering equipment for cash $ 900,000. 3. Purchased PP&E for $ 30,000. Paid cash $ 10,000 and signed a note payable for the remaining amount. 4. Provided catering services to a client and amount is due in next 10 days' worth of $ 40,000. 5. Catering services of $ 30,000 were rendered with partial collection of $ 2,000. 6. Purchase office equipment of worth $ 100,000. Paid $ 50,000 cash and remaining amount is due in 45 days. 7. Received partial payment of $ 20,000 for services rendered in transaction 4. 8. Received $ 18,000 in full settlement of services rendered in transaction 4. 9. Paid $ 30,000 partially to supplier of office equipment in transaction 6. 10. Paid $ 15,000 in full settlement of transaction 6. 11. Company advanced a prepayment of rent worth $ 48,000 for next months. 12. Rent of first month expired in this month. 13. Received telephone bill of $5,000. 14. Owner withdrew $ 6,000 for his personal use. 15. Owner took away office equipment of $ 500,000 for his personal use. 16. Received advance of $ 20,000 from customer to render services in the next month. 17. Declared dividend of $ 1,000 for distribution in next month. 18. Employees' wages of 50,000 for the current month are unpaid and salaries of $ 20,000 are paid in current month. Instructions Prepare journal entries. Prepare Ledger accounts. Prepare Trial Balance. Show the effect of each transaction on accounting equation. Show the effect of each transaction in following manner (NE= no effect, D = decrease, I = increase). Income - Expense - Profits Assets = Liabilities + Owner's Equity 1. NE NE = NE 1 NE Submission Guidelines: Hand written assignment on A4 sheets Write your name, roll number, date, assignment number, CLO number on the top of your first page (you may use separate cover page). Files cover not mandatory Deadline Monday 12 October 2020 in the start of class) No acceptance of late submission

Answer & Explanation Solved by verified expert

See Answer