Question

Transactions for Ali Company for the month of November are presented below.

Nov 1.​Invested L.E. 300,000 cash and L.E. 120,000 machines in the business.

2.​Purchased land costing L.E. 175,000 for cash.

3.Billed customers for 15000 for services performed .

3.​Purchased Truck costing L.E.30,000 ,L.E.5,000 cash and the remainder on credit.

4.​Purchased supplies on account for L.E.2000.

5.​Paid L.E.3,000 for a one-year insurance policy.

6.​Received L.E. 6,000 cash for services performed.

7.​Received L.E. 10,000 for services previously performed on account.

8.​Paid Salaries to employees for L.E.3,500.

9.​Omar withdrew L.E.2,000 cash from the business.

  10. Received L.E. 20000 cash in advance for services will be submitted next month.

  11. Borrowed a loan from a bank for L.E.30,000 ( notes payable).

Required:

1) Journalize each transaction and identify each transaction by number. You may omit journal explanations.

2) Post and calculate the balance.

3) Prepare trial balance

4) Prepare financial statements

Answer 1

Journal Entries
Sl. No.	Particulars	Dr.	Cr.
1	Cash A/c	3,00,000
	Machinery A/c	1,20,000
	To Capital A/c		4,20,000
2	Land A/c	1,75,000
	To Cash A/c
3	Accounts Receivables A/c	15,000
	To Services Revenue A/c		15,000
4	Truck A/c	30,000
	To Cash A/c		5,000
	To Notes Payable		25,000
5	Purchases A/c	2,000
	To Accounts Payable		2,000
6	Insurance Expense A/c	3,000
	To Cash A/c		3,000
7	Cash A/c	6,000
	To Services Revenue		6,000
8	Cash A/c	10,000
	To Accounts Receivables A/c		10,000
9	Salaries A/c	3,500
	To Cash A/c		3,500
10	Drawing A/c	2,000
	To Cash A/c		2,000
11	Cash A/c	20,000
	To Unaerned Revenue A/c		20,000
12	Cash A/c	30,000
	To Notes Payable		30,000
13	Capital A/c	2000
	To Drawing A/c		2000

Trial Balance
Particulars		Dr.		Cr.
Cash		177500
Machinery		120000
Capital			420000
Less: Drawings			-2000	418000
Land		175000
Insurance		3000
Salaries		3500
Unearned Revenue				20000
Accounts Receivable		5000
Revenue from Services				21000
Truck		30000
Notes Payable				55000
Purchase		2000
Accounts Payable				2000
		516000		516000

Income Statement
Revenue
	Revenue from Services	21000
Total		21000
Expenses
	Insurance	3000
	Salaries	3500
	Purchase	2000
Total		8500
Net Income		12500

Balance Sheet
Liabilities		Amt	Assets		Amt
Capital	420000		Machinery		120000
Less: Drawings	-2000		Land		175000
Add:Net Income	12500	430500	Truck		30000
Unearned Revenue		20000
Notes Payable		55000	Accounts Receivable		5000
Accounts Payable		2000	Cash		177500
		507500			182500