Recording process

NO-1
Mr. Rahaman is a licensed CA. During the first month of operations of his Business the following -
events and transactions occurred.

May- 01: Invested TK. 40000 cash

May-02: Hired a sectary-Receptionist at a salary of tk.2000 per month.

May-03: Purchased tk.1200 of office supplies on account from Green Supply company.

May-07 : Paid office rent of taka 900 cash for the month.

May-11: Completed a tax assignment and billed client taka 1500 for service rendered.

May-12: Received tk. 4000 advance on a management consulting engagement.

May-17: Received cash taka 1600 for service completed for Hossian Ali.

May-30: Paid secret ary-recept ionist tk.2000 salary for t he mont h.

May-31: Paid 40% of balance due to Green supply co.

Mr. Rahaman uses the following chart of accounts:

No-101 cash, no-112 accounts receivable, no-126 supplies, no-201 accounts payable.no-265
unearned service revenue, no-301 Mr.Rahaman's capital.no -400 service revenue,no-507
salaries expenses,

Instructions:
A) Journalize the transactions
B) Post to the ledger accounts
C) Prepare a trial .balance on may 31,2007
Solutions:
Req-a
Mr. Rahaman General journal

Date Accounts title & explanation Post. ref Debit Credit

taka taka
2007 Cash 101 40000
May-01 Mr. Rahaman's capital 301 40000
(Invested capital in the business)
May-02 No entry, because no transaction
was made.
May-03 Office supplies 126 1200
Accounts payable 201 1200
(purchased supplies on account)
May-07 Rent expenses 508 900
Cash. 101 900
(paid rent for the month)
May-1 I Accounts receivable 112 1500
Service revenue 400 1500
(service fee receivable billed)
May- 12 - Cash 101 4000
Unearned revenue 205 4000
(Received fee as advance)
May- 17 Cash 101 1600
Service revenue 400 1600
.(Receipt of cash revenue)
May 30 . Salary e. , Tenses 507 2000
Cash 101 2000
(Cash paid for salaries)
May-31 Accounts payable 201 480
Cash 101 480
(paid 40% of accounts pay able due
to Green co.)

it
 Req-b
Mr.Rahaman Cash
Date Explanation Ref Debit Credit Balance
taka taka Debit Credit
2007 Mr. Rahaman's capital 40000 40000
May-01
May-07 Rent expense 900 39100
May-12 Unearned revenue 4000 43100
May-17 Service revenue 1600 44700
May-30 Salary expense 2000 42700
May-31 Accounts payable 480 42220

Accounts Receivable

Date Explanation Ref Debit Credit Balance

Taka Taka Debit Credit
Service 1500 1500
2007 Revenue
May-1 1

Office Supplies

Date Explanation Ref Debit. Credit Balance

taka taka Debit Credit
2007
May-03 Accounts payable 1200 1200

Accounts payable

Date Explanation Ref Debit Credit Balanc

taka taka Debit e
Credit
2007 Accounts payable 1200 1200
MAY-03
Cash 480 720
MAY-31
 Unearned Revenue
Date Explanation Ref Debit Credit Balance
taka taka Debit Credit
2007 cash 4000 4000
May-12

Mr. Rahaman's capital

Date Explanation Ref Debit Credit Balance
taka taka Debit Credit
2007 cash 40000 40000
May-01
Service revenue
Date Explanation Ref Debit Credit Balance
taka taka Debit Credit
2007
May-03 Accounts receivable. 1500 1500
May-31 cash 1600 3100

Salaries Expenses

Date Explanation Ref Debit Credit Balance

Taka Taka
Debit Credit

2007 Cash 2000 2000

May-30

Rent Expenses

Date Explanation Ref Debit Credit Balance

taka taka Debit Credit
2007 cash 900 900
May-30
 Req-2
Building A/C Accounts Receivable A/c
Cash A/C
Bal. 62500 92500
Bal. 49500
(e) 3000
95500

Supplies A/C Equipment A/c capital A/C

1500 (a) 1000 Bal. 25000 Bal. 73250

Bal. 500

Salary Expenses A/c Supplies Expense A/c Accumulated Dep. -Building

Bal. 43000 (a) 1000 32500

d) 1250 C) 2500
Bal. 1000
Bal. 44250 Bal. 35000

Accumulated Dep.–Equipment Withdrawals A/C Accounts payable A/c

10000 Bal. 16250 Bal. 95000

B) 5000

Bal. 15000
Req-c
Mr.Rahaman Trial Balance

May-31,2007

Accounts no Explanation Debit Credit

taka taka

101 Cash 42220

112 Accounts receivable 1500
126 Office supplies 1200
201 Accounts payable 720
205 Unearned Revenue 4000
301 Mr. Rahaman's capital 40000
400 Service revenue 3100
507 Salaries expense 2000
508 Rent expense 900

47820 47820
No-2
On January 1, 2007, Nandini established Bengal Travel Agency .the following
transactions were completed during the month;
January 1: Invested cash to start Vie agency tk.300000.
2: paid cash for January officer rent tk 10000.
5: purchased office equipment for cash tk 25000.
10: Incurred advertising costs in the Daily Times, on account tk 10000.
14: purchased office supplies for cash tk.5000
18: Earned for services rendered tk.30000 (tk.20000 cash received from
Customer and the Balance tk.10000 is billed to customers on account)
20: withdrew cash for personal use tk. 6000
23: paid the daily times amount due on January 10
25: purchased additional office supplies on account tk4000.
31: paid employees salaries fk.5000.
31: Received in cash from customers who have previously been billed on
jJanuary 18

31: Received cash from a new customer for services rendered tk 10000.
31: paid telephone, gas and electricity bills tk.3000

Required:

a) Show summary of transaction and prepare a tabular form

b) Prove the accounting principle

 1*4

Req-a
Summary of tabular analysis of transaction on accounting equation:

Transaction Assets =Liabilities +Owner’s Equity

Date cash + office +o office +A/R = + A/P Nandini's capital

supplies
equipments
2007 +300000 = + 300000 owner's
Jan-1 = Investment
2 -10000 = -10000 office rent

5 -25000 +25000
=
10 = +10000 -10000 advertising
Exp.
14 -5000 +5000
=
18 20000 +10000 = +30000 service
-revenue
20 -6000 = -6000 withdrawals

23 . 40000 = -10000
25 +4000 = +4000
31 -5000 = -5000 salaries
expenses
31 -10000 -10000
=
31 +10000 • = + 10000 service
Revenue
31 -3000 = -3000 utilities
exp
276000 + 5000 +9000 nill =4000+ 306000

310000 310000
Req b

Prove the equation:

Assets = Liabilities + owner's equity

Cash + supplies + office equipment = AT + Nandini's capital

276000 +9000 + 25000 = 4000 +306000

=310000 =310000

No-3
Helen, after receiving her certification as a physician, began her own practice on
june 1, 2007. During the first month of operation,; the following transaction occurred.
a. Invested tk 20000 in .ash in the medicine: practice.
b. Paid tk 1500 for June rent on office space.
c. Purchased medicine equipment for tk 7000 cash.
d. Purchased tk 600 of medical supplies on credit
e. Rendered services to patients for cash tk 4000.
f. Borrowed tk 1000 each from a bank on a note payable.
g. Billed patient tk 2000 upon completion of her medical treatment
h. Paid expenses: salaries tk500, telephone tk100.
i. Received bill for electricity used tk.200.
j. Received tk 1500 from patient billed previously.
k. Cost of supplies used during the month tk. 400.

Required:
a) Prepare a tabular summary of the transactions.
 Req-a
Summary of tabular analysis of transaction on accounting equation:

Transaction Assets Liabilities +Owners Equit y

No
cash + supplies +Accounts = + AP +Notes + Helena’s
Equipment payable capital
Receivable
+20000
a. +20000
= -1500 Init ial
b. -1500
invest ment
18500
Bal. c. +7000 = 18500
-7000.
Bal.
11500 7000 =+600 18500
d. +600
11500 600 7000
Bal. +4000 18500+4000 service
=600
e. revenue

Bal.
f. 15500
7000 =600 +1000 22500
+1000

+2000 22500+2000 service

Bal. g. 16500 600 7000 =600 1000
revenue
Bal. 16500 600 2000 7000 =600 1000 24500
-500 salaries.exp.
h. -600 -100 telephone exp.
23900
Bal. =600 -200Electricit y exp.
15900 600 2000 7000 1000
i. +200

Bal. 15900 600 2000 7.000 =+800 1000

23700
j. +1500 -1500

600 23700
Bal.k. 17400 500 7000 =800 1000 -400 supplies
-400 exp.
Bal.l. 17400 200 500 7000 =800 1.000 23300

25100
25100
NO-4
Nazrul owns and operates the Nazrul Plumbing shop. At the beginning of the month, the shop
had the following assets: cash 3300, Accounts receivable tk. 1900, Supplies tk.1700, tools
tk. 2550 and truck 5600. The shop had debts of tk. 1500 for supplies & tools purchased on
credit. During a short period of time, the following transactions were completed:

1) Paid one month rent tk 400.

2) Purchased supplies with cash tk.100.
3) Paid for supplies previously purchased on credit tk.500
4) Purchased tools for cash tk.200.
5) Completed work for Sattar traders and collected tk.90 for it.
6) Completed work for Esmail on credit tk.200.
4) Received payment from customer previously billed tk.600
5) Paid for oil and gas used during the month tk.150
6) Paid utility bills for the month tk. 180.
10) Paid the rent for Nazrul residence tk. 300. r

Required:

a) Show summary of transactions preparing tabular analysis.

b) Show by addition & subtractions as the effects of the transactions, on the equation
.show the new total after each transaction.