Q1. Account classifications are shown as column headings in the table below.

For each account

classification, indicate the manner in which increases and decreases are recorded (i.e., by debits
or by credits).

Q2. Complete the following table:

Q3. Write up the asset, capital and liability’s T accounts in the books of D. Gough to record the
following transactions:
Q4. You are to enter up the necessary accounts for the month of October from the following
information relating to a small printing firm. Then balance-off the accounts and extract a trial
balance as at 31 October 2017.
2017 October 1: Started in business with capital in cash of £3,600 and £8,400 in the bank.
2: Bought goods on credit from: A. Bell £1,220; J. Smith £1,030; T. Hand £348; L.
Smart £690; S. long £1,084
4: Sold goods on time to: P. Hunt £680; A. Dexter £1,440; P. Spin £2,304.
6: Paid rent by cash £820.
9: P. Hunt paid us his account by cheque £680.
10: P. Spin paid us £2,000 by cheque.
12: We paid the following by cheque: T. Hand £348; A. Bell £1,220.
15: Paid carriage in cash £76.
18: Bought goods on time from J. Smith £582; L. Smart £1,880.
21: Sold goods on time to A. Dester £1,620.
31: Paid rent by cheque £980.

Q5. On 1 January 20X6, the Grand Union Food Stores had goods in inventory valued at $6,000.
During 20X6 its proprietor purchased supplies costing $50,000. Sales for the year to 31 December
20X6 amounted to $80,000. The cost of goods in inventory at 31 December 20X6 was $12,500.
Required:
Calculate the gross profit for the year.

Q6. Enter the following transactions of an antiques shop in the accounts and extract a trial
balance as at 31 March 2017.
2017 March 1: Started in business with £8,000 in the bank.
2: Bought goods on credit from: L. Frank £550; G. Byers £540; P. Lee £610.
5: Cash sales £510.
6: Paid wages in cash £110.
7: Sold goods on time to: J. Snow £295; K. Park £360; B. Tyler £640.
9: Bought goods for cash £120.
10: Bought goods on time from: G. Byers £410; P. Lee £1,240.
 12: Paid wages in cash £110.
13: Sold goods on time to: K. Park £610; B. Tyler £205.
15: Bought shop fixtures on time from Stop Ltd £740.
17: Paid G. Byers by cheque £700.
18: We returned goods to P. Lee £83.
21: Paid Stop Ltd a cheque for £740.
24: B. Tyler paid us his account by cheque £845.
27: We returned goods to L. Frank £18.
30: G. Prince lent us £1,000 by cash.
31: Bought a van paying by cheque £6,250.

Q7. Epler Consulting Services, Inc., opened for business on January 25, 2011. The company
maintains the following ledger accounts:

Cash Capital Stock

Accounts Receivable Office Rent
Office Supplies Revenue
Office Equipment Expense
Accounts Payable Utilities Expense

The company engaged in the following business activity in January:

Jan. 20 Issued 5,000 shares of capital ‘stock for $50,000.

Jan. 20 Paid $400 office rent for the remainder of January.
Jan. 21 Purchased office supplies for $200. The supplies will last for several months,
and payment is not due until February 15.
Jan. 22 Purchased office equipment for $15,000 cash.
Jan. 26 Performed consulting services and billed clients $2,000. The entire amount
will not be collected until February.
Jan. 31 Recorded $100 utilities expense. Payment is not due until February 20.

Instructions
Record each of the above transactions in general journal form, post to leger accounts and
prepare trail balance. Prepare the statement of profit and loss.
Q8. From the following trial balance of I. Lamb, extracted after one year's trading, prepare a
statement of profit or loss for the year ending 31 October 2016.

Inventory at 31 December 2016 was £15,600.

Q9: From the following trial balance of G. Foot after his first year's trading, you are required to
draw up a statement of profit or loss for the year ending 30 June 2016.
Inventory at 30 June 2016 was £18,000.

Q10. Bill Sankey is a sole proprietor who keeps records of his cash and bank transactions. His
transactions for the month of March were as follows:

March 1: Cash in hand £400, Cash at bank £6,000.

4 Sankey received a cheque for £1,200 from W. Abbot which was paid directly into the
bank. This represented sales.
6: Paid wages in cash £60.
8: Sold goods for cash £300.
10 Received cheque from G. Smart for £600, in full settlement of a debt of £640; this was
paid directly into the bank.
11: Paid sundry expenses in cash £48.
14: Purchased goods by cheque for £1,400.
18: Paid J. Sanders a cheque of £190 in full settlement of
 a debt of £210.
23: Withdrew £25 from the bank to pay the office cleaning company.
24: Paid wages in cash £60.
26: Sold goods for cash £380.
28: Paid salaries by cheque £240.
31: Retained cash amounting to £600 and paid the remainder into the bank.
Required:
(a) Enter the above transactions within T-accounts and bring down the balances,
(fa) Assuming no opening accounts receivable, accounts payable, or inventory, prepare a
statement of profit or loss for the month ended 31 March.

Q11. As at 30.3.20X7, your business has the following balances on its Trail balance

Account Dr ($) Cr ($ )

Bank loan 12,000

Cash at bank 11,700
Capital 13,000
Local taxes 1,880
Trade accounts payable 11,200
Purchases 12,400
Sales 14,600
Sundry payables 1,620
Trade accounts receivable 12,000
Bank loan interest 1,400
Other expenses 11,020
Vehicles 2,020
52,420 52,420
Ending inventory is 3000

Required: Prepare the statement of profit and loss

Q12. On 1 January, P Roberts starts a business with $2,500 in the bank and $500 cash. The
following transactions occur:
2 Jan. He buys raw materials on credit for $700 from J Martin.
3 Jan. He sells goods for $300 on credit to G Goddard.
7 Jan. He sells goods for $1,100 to K Lemon on credit.
12 Jan. He buys equipment for $3,000, paying by cheque.
18 Jan. He pays wages of $50 by cheque.
 20 Jan. He buys raw materials for $350, paying by cheque. He takes $80 from the cash
box for himself.
28 Jan. He pays J Martin $250 by cheque.
30 Jan. He transfers $200 cash into the bank from his cash box.
Instructions
Record each of the above transactions in general journal form, post to leger accounts and prepare
trail balance.
Q13. Following are the transactions from Sun Orthopedic Clinic, Inc for the month of October.

Oct. 1: The clinic issued 4,000 additional shares of capital stock to Doctor Soges at $50 per
share.
Oct. 4: The clinic purchased diagnostic equipment. The equipment cost $75,000, of which
$25,000 was paid in cash; a note payable was issued for the balance.
Oct. 12: Issued a check for $9,000 in full payment of an account payable to Zeller
Laboratories.
Oct. 19: Purchased surgical supplies for $2,600. Payment is not due until November 28.
Oct. 25: Collected a $24,000 account receivable from Health One Insurance Company.
Oct. 30: Declared and paid a $300,000 cash dividend to stockholders.
Instructions
a) Record the Above transactions in general journal form for Sun Orthopedic Clinic, Inc.
b) Post journal entries to ledger accounts and trial balance
c) Prepare financial statements

Q14. Enter the following transactions, completing the double entry in the books for the month of
August 2017. Also prepare financial statements. Ending inventory is 1000.
2017August 1: Started in business with £31,000 in the bank and £4,000 in cash.
2: Purchased goods £1,160 on Credit from A. Cliff.
3: Bought fixtures and fittings £4,600 paying by cheque.
5: Sold goods for cash £600.
6: Bought goods on credit £1,300 from S. Bell.
10: Paid rent by cash £800.
 12: Bought stationery £180, paying in cash.
18: Goods returned to A. Cliff £164.
21: Received rent of £480 by cheque for sublet of corner space.
23: Sold goods on time to R. Coat for £3,200.
24: Bought a van paying by cheque £16,400.
30: Paid the month's wages by cash £1,220.
31: The proprietor took cash for her own personal use £1,020.

Q15. Brown Consulting Services organized as a corporation on January 18 and engaged in the
following transactions during its first two weeks of operation:

Jan. 18 Issued capital stock in exchange f or $30,000 c ash.

Jan. 22 borrowed $20,000 from its bank by issuing a note payable.
Jan. 23 paid $100 for a radio advertisement aired on January 24.
Jan. 25 provided $1,000 of services to clients for cash.
Jan. 26 provided $2,000 of services to clients on account.
Jan. 31 Collected $800 cash from clients for the services provided on January 26.

Required:
Record each of these transactions and post them to ledger accounts
.
Q16. Trafflet Enterprises incorporated on May 3, 2011. The company engaged in the following
transactions during its first month of operations:

May 3: Issued capital ’stock in exchange f or $800,000 c ash.

May 4: Paid May office rent expense of $1,000.
May 5: Purchased office supplies for $400 cash. The supplies will last for several months.
May 15: Purchased office equipment for $8,000 on account. The entire amount is due June
15.
May 18: purchased a company car for $27,000. Paid $7,000 cash and issued a note payable
for the remaining amount owed.
May 20: Billed clients $32,000 on account.
 May 26: Declared a $5,000 dividend. The entire amount will be distributed to shareholders
on June 26.
May 29: Paid May utilities of $200.
May 30: Received $30,000 from clients billed on M ay 20.
May 31: Recorded and paid salary expense of $14,000.

Required:
Record each of these transactions and post them to ledger accounts

Q17. The McMillan Corporation incorporated on September 2, 2011. The company engaged in
the following transactions during its first month of operations:

Sept. 2: Issued capital stock in exchange f or $900,000 c ash.

Sept. 4: Purchased land and a building for $350,000. The value of the land was $50,000,
and the value of the building was $300,000. The company paid $200,000 cash and issued a
note payable for the balance.
Sept. 12: Purchased office supplies for $600 on account. The supplies will last for several
months.
Sept. 19: Billed clients $75, 000 on account.
Sept. 29: Recorded and paid salary expense of $ 24,000.
Sept. 30: Received $30,000 from client’s billed on September 19.
Required:
Record journal entries, including explanations, for the above transaction and also T account.
Q18.

Required:
Prepare the Statement of profit and loss from above transactions.
Q19.

Also prepare financial statements. Ending inventory is 4000

Q20.

Also prepare financial statements. Ending inventory is 6000.