SEMESTER SPRING 2013 FINANCIAL ACCOUNTING (MGT101) ASSIGNMENT NO. 01 DUE DATE: 2nd May 2013 MARKS: 20
TOPIC TO BE TESTED : • Application of “Rules of debit and credit” LEARNING OBJECTIVES: • To develop an understanding for applying the rules of debit and credit
On 1st March 2013, Mr. Adnan organized a business called A.R Rentals. Mr. Adnan’s new business was able to begin operations immediately by purchasing the assets and taking over the location of Ammar Rentals, an equipment rental business. Below are the transactions for the month of March 2013: Date 2013 March 01 Transactions Mr. Adnan deposited Rs. 900,000 cash in the name of his business - A. R Rentals in the bank.
March 01 Paid Rs. 90,000 to Mr. Irfan as three month’s advance rent for the rental yard and originally recorded this payment as an asset as per policy. March 01 Purchased for Rs. 280,000 all the equipment from Ammar Rentals and paid Rs. 170,000 cash and issued a 3 months note payable for Rs. 110,000. March 04 Purchased office supplies and office furniture from Ashar & Co. amounting to Rs. 5,000 and Rs. 50,000 respectively. March 08 Received Rs. 10,000 cash from Mukhtar Construction Co. as rent of equipment March 10 Sent an invoice for Rs. 5,000 to M/S ABC for rental services provided. March 17 Rs. 3,400 paid for maintenance of equipment to Raza & company
March 27 Bank charges of Rs. 150 deducted by bank from bank account of business March 30 Received a cheque of Rs. 10,000 from M/S ABC against rental services March 31 Paid salaries for the month of March amounting to Rs. 3,600
Required: Fill the appropriate boxes of table given below (1st transaction is given as sample attempt in the table)
Debit Date Accounts involved Rs. 2013
Applied Rule of Debit and Credit with respect to the nature of account
Increase in asset a/c 900,000 Increase in Owner’s equity a/c
? 90,000 ?
? ? ?
? 170,000 ? 110,00 ?
? ? ?
? ? 55,000 ?
? 10,000 ?
? 5,000 ?
? 3,400 ?
150 ? 10,000 ? 10,000 ?
? 3,600 ?
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