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Financial Accounting


Q.2 Tom’s Trucks completed the following transactions during the first month of its operations for July 2014: a) The business began the operations by receiving $7,000 cash & a truck valued at $12,500 from Tom Smith. b) Paid 350 cash for supplies c) Prepaid insurance, $750 d) Performed delivery service for a customer & received $900 cash. e) Completed a large delivery job & invoiced the customer $1,700. f) Paid employee wages $750. g) Received $12,500 cash for performing various delivery services. h) Collected $700 in advance for delivery service to be performed later. i) Collected $1,700 cash from a customer on account. j) Purchase fuel for the truck, paying $750 with a business credit card. k) Performed delivery services on credit, $1,050. l) Paid office rent for the month $700. m) Paid $750 on account. n) Tom withdrew cash of $2,900. Required: 1) Record each transaction in the journal. Explanations are not required. 2) Prepare T accounts for the following accounts: a. Cash b. Tom S, capital 3) Prepare a worksheet showing unadjusted trial balance, adjusting entries & adjusted trial balance. Complete the worksheet using the adjustment data given at 31 July 2014: a. Accrued salary expense, $750 b. Depreciation expense, $210 c. Prepaid insurance expired, $250 d. Supplies on hand, $210 e. Unearned service revenue earned during July, $200 4) Prepare Tom’s Trucks income statement and statement of changes in equity for month ending 31 July 2014 & classified balance sheet at that date. On the income statement list expenses in decreasing order by amount. 5) Journalise adjusting entries. 6) Journalise closing entries. 7) Prepare post-closing trial balance at 31 July 2014. Marks : 30