Group Assignment

Haramaya University
College of Business and Economics

Department of Accounting and Finance
Fundamentals of Accounting I Group Assignment
(Maximum 5 individual per group)
Submission Date: November16, 2023 Weight (10http://ielts-
up.com/%)
1. The following transactions were completed by Montrose Company during May of the current
year.
May 3. Purchased merchandise on account from Floyd Co., $4,000, terms FOB shipping point,
2/10, n/30, with prepaid freight of $120 added to the invoice.
5. Purchased merchandise on account from Kramer Co., $8,500, terms FOB destination,
1/10, n/30.
6. Sold merchandise on account to C. F. Howell Co., list price $4,000, trade discount 30%,
terms 2/10, n/30. The cost of the merchandise sold was $1,125.
8. Purchased office supplies for cash, $150.
10. Returned merchandise purchased on May 5 from Kramer Co., $1,300.
13. Paid Floyd Co. on account for purchase of May 3, less discount.
14. Purchased merchandise for cash, $10,500.
15. Paid Kramer Co. on account for purchase of May 5, less return of May 10 and discount.
16. Received cash on account from sale of May 6 to C. F. Howell Co., less discount.
19. Sold merchandise on cash, $2,450. The cost of the merchandise sold was $980.
22. Sold merchandise on account to Comer Co., $3,480, terms 2/10, n/30. The cost of the
merchandise sold was $1,400.
24. Sold merchandise for cash, $4,350. The cost of the merchandise sold was $1,750.
25. Received merchandise returned by Comer Co. from sale on May 22, $1,480. The cost of
the returned merchandise was $600.
Instructions
i. Journalize the preceding transactions assuming that:

a) Montrose Company uses a periodic inventory system.
b) Montrose Company uses a perpetual inventory system.
ii. Journalize the adjusting entry for merchandise inventory shrinkage, $3,750.
2. The cash in bank account for DX Co. on May 31 of the current year indicated a balance of
$13,215.80 after both the cash receipts journal and the check register for May had been
posted. The bank statement indicated a balance of $19,513.90 on May 31. Comparison of the
bank statement and the accompanying cancelled checks and memorandums with the records
revealed the following reconciling items.
A. Checks outstanding totaled $7,070.10.
B. A deposit of $3,915.20, representing receipts of May 31, had been made too late to
appear on the bank statement.
1
C. The bank had collected $3,120 on an interest bearing note left for collection. The face of
the note was $3,000.
D. A check for $69 returned with the statement had been recorded erroneously in the check
register as $96. The check was for payment of an obligation to YX Co. for the purchase
of supplies on account.
E. A check drawn for $42 had been erroneously charged by the bank as $24.
F. Bank service charges for May amounted to $21.80.
Instructions:
i. Prepare bank reconciliation.

ii. Record the necessary entries in general journal form.
iii. What is the amount of cash in bank that should appear on the balance
sheet as of May 31?
3. Prepare journal entries for each of the following:
a. Issued a check to establish a petty cash fund of $500.
b. The amount of cash in the petty cash fund is $120. Issued a check to replenish the fund,
based on the following summary of petty cash receipts: office supplies, $300 and
miscellaneous administrative expense, $75. Record any missing funds in the cash short and
over account.
4. On February 20, 2002, XY Co. discounted at Abyssinia Bank a note receivable at 16%
arising from sale of merchandise. The note was for Br-100,000, 120 days dated on Dec. 20,
2001, 15%. Assume the fiscal period of X Co. ends on Dec. 31.
Instruction:
A. Calculate a bank discount and proceed.

B. Prepare a necessary journal entry.
5. On February 20, 2002, XY Co. discounted at Abyssinia Bank a note receivable at 16%
arising from sale of merchandise. The note was for Br-100,000, 120 days dated on Dec. 20,
2001, 15%. Assume the fiscal period of X Co. ends on Dec. 31.
Instruction:
A. Calculate a bank discount and proceed.
B. Prepare a necessary journal entry.
6. Assume that Walia Company issued a promissory note to Idget Company at a term of
90days, 8% note for birr 20,000 dated on February 20.
Compute:
A. Maturity date
B. Interest
C. Maturity value

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Haramaya University

College of Business and Economics

i. Journalize the preceding transactions assuming that:

i. Prepare bank reconciliation.

A. Calculate a bank discount and proceed.

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