Exercise Tasks:

Task 1. (with trial balance, balance sheet and income statement involved)
There is uncorrected trial balance of Certified Answering Service on 01. December, 200X:
_____________________________________________________________
Certified Answering Service
Trial balance
01. Decembar, 200X
Description
Gyro account
Customers
Inventories of office material
Prepaid insurance costs for 6 months
Equipment
Value correction of equipment
Liabilities on long-term loans
Prepaid revenues (income) of services for 3 months
Orginal equity
Non-alocated profit
Liabilities for dividends
Revenues from provided services
Costs of salaries
Rental costs
Total

Balance
payable
2.560
1.250
180
240
3.400

Balance
receivable

600
700
460
2.000
2.470
400
2.900
1.500
400
9.530

9.530

During December there were following changes:

a) Insurance costs in December 40 KM.
b) Office material issued for use 105 KM.
c) Depreciation of equipment in December 100 KM.
d) Salaries costs in December 120 KM.
e) Services done in December but not invoiced 300 KM.
f) Revenues (income) from services in December 160 KM (link with the prepaid revenues).
g) Liabilities paid in December for dividends 400 KM.
It is required to :
1.
2.
3.
4.

Open T accounts for all accounts of trial balance and enter all balances.
Determine all necessary corrective entries and enter it directly to T accounts. If
necessary open new T accounts.
Create corrected trial balance with reference date 31.12.200X.
Create balance sheet and income statement in December with reference date
31.12.200X.

Solutions :
1. Entered T accounts and amounts from trial balance.
2. Corrective recorded entries.
D
Bal
Bal

2.560

Gyro account
400 (g)
2.160

Receivables for non-invoiced

revenues from provided services
(e)
300
Bal
300

D
Bal

Customers

D
Bal
Bal

Prepaid insurance costs

240
40
(a)
200

Inventories of office material

C

D
Bal
Bal

C
180
75

D
Bal

Value correction of equipment

D

105 (b)

Equipment

Liabilities on long-term loans

C

Prepaid revenues of services

160
460 Bal
300
Bal

Non-alocated profit
2.470 Bal

C
700 Bal

D
(g) 400

D
Bal

Revenues from provided

services
2.900 Bal
300 (e)
160 (f)
3.360 Bal
Rental costs
400

3.400

600 Bal
100 (c)
700 Bal
D
(f)

1.250

Liabilities toward employees

120 (d)
120 Bal

Orginal equity
2.000 Bal

Liabilities for dividends

400 Bal

Costs of salaries
C

D
Bal
(d)

1.500
120

Bal

1.620

D
(a)
Bal

Insurance costs
40
40

D
(b)
Bal

Consumed material (Costs office

material)
105
105

Depreciation costs
C

D
(c)
Bal

C
100
100

3. Completed corrected trial balance

Certified Answering Service
(Trial balance)
31. 12. 200x.
Description
Gyro account
Customers
Receivables for non-invoiced revenues
Inventories of office material
Prepaid insurance costs for 5 months
Equipment
Value correction of equipment
Liabilities on long-term loans
Prepaid revenues of services
Liabilities toward employees
Orginal equity
Non-alocated profit
Revenues from provided services
Costs of salaries
Rental costs
Insurance costs
Consumed material (Costs office material)
Depreciation costs
Total

Balance
payable
2.160
1.250
300
75
200
3.400

Balance
receivable

700
700
300
120
2.000
2.470
3.360
1.620
400
40
105
100
9.650

9.650

4. Completed financial statements:

Certified Answering Service
Income statement
For period 01.12. - 31.12 200x.
Revenues
Revenues from provided services
Expenses
Costs of salaries
Rental costs
Insurance costs
Consumed material (Costs office material)
Depreciation costs
Profit before taxation
Profit tax
Net profit

3.360
1.620
400
40
105
100

(2.265)
1.095
(250)
845
3

Certified Answering Service

Balance sheet on 31.12. 200x.
Assets
Gyro account
Customers
Receivables for non-invoiced revenues
Inventories of office material
Prepaid insurance costs for 5 months
Equipment
Value correction of equipment
Total assets

2.160
1.250
300
75
200
3.400
(700)

2.700
6.685

Liabilities
Prepaid revenues of services
Liabilities toward employees
Liabilities for profit tax
Liabilities on long-term loans
Total liabilities

300
120
250
700
1.370
Private equity

Orginal equity
Non-alocated profit
Total equity
Total liabilities and equity

2.000
3.315
5.315
6.685

Task 2.
There are account selected from corrected trial balance of toy shop Y at the end of 31.12.2010.
Inventories of goods of the Y company in the beggining of the year were 114.600 KM, and at the end
of the year they were 88.200 KM.
Y COMPANY
Part of the corrected trial balance on 31.12.2010. Year
Revenuses from sale goods (gross sale)
495.000
Return from sale and correction
6.000
Acquisition (purchase) goods
210.600
Return of sold goods and correction
7.800
Freight costs goods during acquisition
6.900
Costs of salaries of employees (engaged in sale)
97.875
Administration salaries costs
38.625
Advertising costs
72.900
Rental costs
7.200
Insurance costs
3.600
Costs of electricity
4.680
Costs of sale material (expendable materials)
8.640
Costs of office supplies
3.525
Depreciation costs equipment (sale)
3.150
Depreciation costs office equipment
2.400
Profit tax
3.000
Using given data create income statement of the Y company. Costs for salaries, advertisement,
expendable materials, and depreciation costs equipment are costs of sale. Other costs, except the profit
tax are general administrative costs (expenses).
4

Solution:
Income statement company Y from to 01.01. 31.12.2010. Year
Revenuses from sale (gross sale)
- Return from sale and correction
Net revenues from sale (net sale)
Costs of sold goods:
Inventories at the begining of period 01.01.
+ Acquisition (purchase) goods
- Return of sold goods and correction
+ Freight costs goods
Net costs of acquisiton (purchase):
Available for sale in total (acquisation costs)
-Inventories at the end of period
Costs from sold goods
Gross profit (gross margin)
Operating costs
Costs of sale:
Costs of salaries of employees (sale)
Advertising costs
Costs of sale material
Depreciation costs equipment (sale)
Total sale costs
General and administration costs:
Administration salaries costs
Rental costs
Insurance costs
Costs of electricity
Costs of office supplies
Depreciation costs office equipment
Total general and administration costs
Total operating costs
Profit before tax payment
- Profit tax
Net profit

495.000 KM
(6.000 KM)
489.000 KM
114.600 KM
210.600 KM
(7.800 KM)
6.900 KM

(+)

209.700 KM
324.300 KM
(88.200 KM)
(236.100 KM)
252.900 KM
97.875 KM
72.900 KM
8.640 KM
3.150 KM
182.565 KM
38.625 KM
7.200 KM
3.600 KM
4.680 KM
3.525 KM
2.400 KM
60.030 KM

(+)

(242.595 KM)
10.305 KM
(3.000 KM)
7.305 KM

Tasks for individual work

Task 3 .
Ferraro Construction companies engaged in construction of foundations for buildings and parking lots.
Below is given a list of balance accounts on 30.11.20xx. as follows:
Liabilities
Customers
Gyro account
Inventories of material
Liabilities for dividends
Costs of electricity
Equipment
Liabilities for issued bills
of exchange

11.760 Equipment (official car)

30.360 Prepaid insurance costs for 5
months
? Non-alocated profit
5.700 Receivables for non-invoiced
revenues
23.400 Orginal equity
1.260 Costs of material
73.500 Costs of salaries
60.000

6.600
13.800
30.000
52.200
90.000
21.600
26.400

Create trial balance of company with appropriate title and accounts presented in order as in the balance
sheet. Determine exact balance of account Gyro account on 30.11.20xx.
Task 4.
Elena Garcia has cretaed small company named Garcia Training Centre for training of people for work
on computers.
a) Garcia started her job by transfering 39.200 actions (nominal value is 1 m.u. - money unit, per
action), and by using following funds:
Gyro account
18.400 m.u.
Furniture
6.200 m.u.
Computer (PC)
14.600 m.u.
b) She paid rent for the first month 560 m.u.
c) She bought software for her computer using short-term loan 1.500 m.u.
d) She paid advertisement in the local newspapers 200 m.u.
e) She received aplications for five day course which suppose to start next week, from five students.
Each of them should pay 400 m.u. for entire course if they all begin with it.
f) She paid fee to her temporary assistant 300 m.u.
g) She received payment from three of her applicants mentioned in e), total amount is 1.200 m.u.
h) She delivered bills for two other students from e) which didn't paid fee in cash but they have
started their course, total amount 800 m.u.
i) She paid bill for power for current month 220 m.u.
j) She paid allotment for software mentioned in c), total amount 500 m.u.
k) She received payment from one of her students mentioned in h) - 400 m.u.
l) She paid in cash 9,400 m.u. for another computer.
m) She published and paid dividend for 600 m.u.
It is required:
1. Form folllowing T accounts: gyro account, costumers, software, office furniture, equipment,
liabilities for short-term loans, original equity, liabilities for dividends, revenues from provided
services, salaries costs, costs for electrisity, rental costs, advertisement costs.
2. Record all above mentioned transactions directly to T accounts.
3. Create trial balance using current date.