Adain’s Tutorial 

A Special Commerce Coaching

212/5-GA West Rampura, Ulon Road.

TOTAL MARK 100

[Answers any 5 Question]
1. a. Define Accounting? 
  b. What is information system. Discuses the steps of information system. 
  c. Three C of Accounting. 
2. a. What is GAAP? What are the sources of GAAP.
  b. Financial statement information about four different companies is as follows. 10

January 1, 2003 Bablu Company Lablu
Company Dablu
Company Hablu Company
Assets Tk. 84000 Tk. 110000 (g) Tk. 1700000
Liabilities 50000 (d) 75000 (j)
Owner’s equity (a) 60000 50000 90000
December 31, 2003  
Assets (b) 147000 200000 (k)
Liabilities 55000 65000 (h) 80000
Owner’s equity 58000 (e) 130000 180000
Owner’s equity changes in year  
Additional investment (c) 15000 10000 15000
Drawings 250000 (f) 14000 20000
Total revenues 350000 420000 (i) 520000
Total expenses 320000 385000 342000 (I)
Instructions 
a. Determine the missing amounts.
b. Prepare the owner’s equity statement for Lablu Company. 

3. a. What is Accounting Equation? 4
  b. Mr. Mamun, CPA, Competed these transactions during October of the current year. 16
Oct. 1 Began a public accounting practice by investing Tk. 35,000 in cash and office equipment having a Tk. 40,000 fair Value.
1 Paid two months rent in advance on suitable office space, Tk. 15,000
2 Purchased on credit office equipment, Tk. 3,500 and office supplies, Tk. 650. 
5 Completed accounting work for a client and immediately received Tk. 1,500 cash there for.
9 Completed accounting work on credit for Basic Bank, Tk. 6,000
11 Paid for the items purchased on credit on October 2.
12 Paid the Tk. 6,250 premium on an insurance policy.
19 Received payment in full from Basic Bank for the work completed on October 9.
25 Completed accounting work on credit for-Eastern Realty, Tk. 4000
29 Mamun withdrew Tk. 2,500 cash from the practice to pay personal expenses.
30 Purchased additional office supplies on credit Tk. 400.
31 Paid the October utility bills, Tk. 1,350.
Required : 1. Prepare a tabular analysis of the transactions.

  2. Prepare an income statement, owner’s equity, Balance sheet. 

4. a. Define Adjusting Entries? Write Types of adjusting Entries. 3+5
  b. The trial balance of Olympic Ltd. Shows, among other items, the following balances on  
  December 31, 2003, the end of a fiscal year : 12

Accounts Receivable 225000 
9% Century City Bonds 150000 
Land 275000 
Buildings 300000 
Accumulated Depreciation-Buildings 173250
8% First-Mortgage Bonds Payable 3000000
Rent Revenue 71500
Office Expense 7500 

The following fact on this date upon inspection of the company’s records. 
a. It is estimated that approximately 2% of accounts receivable may prove uncollectable.
b. Interest is receivable semiannually on the Century City bonds on March 1 and September 1.
c. Buildings are depreciated at 5% a year, however, there were building additions of Tk. 50,000 during the year, The company computes depreciation on asset acquisitions during the year at one half the annual rate.
d. Interest on the first-mortgage bonds is payable semiannually on February 1 and August 1.
e. Rent revenue includes Tk. 3,750 that was received on November 1, representing rent on part of the buildings for the period November 1, 2003, to October 31, 2004.
f. Office supplies of Tk. 2,000 are on hand on December 31, Purchases of office supplies were debited to the office expense account.
Instructions :
1. Prepare the journal entries to adjust the books on December 31, 2003.
2. Give the reversing entries that may appropriately be made at the beginning of 2004. 

5. a. Differentiate between perpetual inventory system and periodic inventory system. 6
  b. Dazzle Book Warehouse distributes hardback books to retail stores and extends credit terms of 2/10, n/30 to all of its customers. At the end of may. Dazzle’s inventory consisted of 240 books purchased at Tk. 1200. During the month of June the following merchandising transactions occurred. 14
June. 1 Purchased 130 books on account for Tk. 5 each from Reader’s World Publishers. FOB destination, terms 1/10, n/30. The appropriate party also made a cash payment of Tk. 50 for the freight on this date.
3. Sold 140 books on account to the Book Nook for Tk. 10 each.
6. Received Tk. 50 credit for 10 books returned to Reader’s World Publishers.
9. Paid Reader’s World Publishers in full. Less discount. 
15. Received Payment in full from the Book Nook. 
17. Sold 120 books on account to Read A-Lot Bookstore for Tk. 10 each.
20. Purchased 120 books on account for Tk. 5 each from Read More Publishers. FOB destination, terms 2/15. n/30. The appropriate party also made a cash payment of Tk. 50 for the freight on this date.
24. Received payment in full from Read-A-Lot Bookstore.

26. Paid Read More Publishers in Full, less discount.
28. Sold 110 Books on account to Readers Bookstore for Tk. 10 each.
30. Granted Readers Bookstore Tk. 150 credit for 15 books returned costing Tk. 75.
Instruction :
Journalize the transactions for the month of June for Dazzle’s Book Warehouse using a perpetual inventory system. 

6. The followings are the ledger balances of Square Ltd. As on 30th June 2003 20

Accounts Title Tk. Accounts Title Tk.
Accounts Payable 275000 Land 550000
Accounts Receivable 560000 Long term Investments 105000
Advertising Expense 40000 Mortgages Payable 400000
Accumulated Dep. On Buildings 165000 Notes Payable 125000
Allowance for Doubtful Accounts 11500 Office Expenses 134000
Buildings 600000 Purchase 1154000
Capital Stock 1500000 Purchase Discounts 9500
Cash 200000 Retained earning on 30th, June 2003 112000
Freight In 150000 Sales 2050000
Insurance Expense 12000 Sales Returns 28000
Interest Expense 22000 Sales Discounts 45000
Interest Income 5500 Selling Expenses 412000
Inventory 30th June, 2003 540000 Taxes, Payroll etc. 66500
  Supplies Expense 35000

Adjustments on 30th June 2003 are required as follows : 
a. The Inventory on hand Tk. 728500
b. The Allowance for Doubtful Accounts in to be increased to a balance of Tk. 25000
c. Buildings are depreciated @ 3%
d. Accrued Selling expenses are Tk. 22000.
e. There are Supplies of Tk. 6500 on hand
f. Unexpired Insurance for the next two year total Tk. 3500
g. Accrued interest on Long-term Investment is Tk. 2000
h. Accrued payroll taxes are Tk. 7500
i. Accrued interest on mortgage is Tk. 4000
j. Income taxes are estimated at 30% of the net income before taxes.
Required : (1) An eight column work sheet (2) Adjusting entries. 

7. a. What are the Differences between General Journal and Special Journal? What are the 
  Benefits of Special Journal. 3+3
  b. On February 1, 2005, the accounts payable ledger and accounts receivable ledger of 
  Ramos Co. are shown below : 14


Accounts payable ledger : R. Huff & Co. 3,500, G. Paul Tk. 2,000 and Waldo Bros. Tk. 3000.
Accounts receivable ledger. Quinn Corp. Tk. 6000, Mason Co. Tk. 4500 and Virginia Co. Tk. 500.
The February transactions are as follows :
Feb-1 The owner K. Ramos invested additional cash in the business Tk. 15,000.
3 Purchased merchandise, cheque no 11 Tk. 12,000.
5 Received cheque in full from Quinn Corp, Mason Co. and Virginia Co. less 5% discount.
7 cash sales of merchandise total Tk. 15,500, the cost of the merchandise sold was Tk. 8,000.
10 Paid half of the balance due to R. Huff & Co. & Paul and Waldo bros. less 3% discount.
15 Received cash refund from a supplier for damaged merchandise Tk. 250.
22 Paid premium due on one year insurance policy, cheque no. 20, Tk. 2500.
Instructions :
a. Prepare cash receipts and cash payment Journal.
b. Perpare control accounts and subsidiary accounts. 
c. Prove the agreement of the control accounts and the subsidiary account balance. 

8. Short Note (4X5) 20
(a) Accounting Concepts (b) Public and Privet Accounting (c) Manual Accounting System (d) FOB (e) Gross and net price.