Analyze and record the above events in the financial records

Reference no: EM133369404

Case: On January 3, 2003, Ale Hab, an ex-manager of the CBE Bole Branch, established his own consultancy business. He named his business "AH Consultancy Services". The objective of the business is to render financial consultancy services to clients on a fee basis. Below are business activities occurred during the first month of operation of the firm (3 to 31 of January, 2003).

a. Alemu deposited $20,000 cash in a bank account in the name of his business - AH Consultancy Services (Deposit slip # 1). He has $250,000 cash in his personal bank account with Dashen Bank and $50,000 cash in a safe deposit box at home.

b. Alemu transferred furniture worth $30,000 from his home for office uses by AH Consultancy Services (Asset receipt note #1). He also has extra home furniture, residential house and personal car worth $620,000, $800,000 and $360,000, respectively.

c. Alemu purchased office supplies worth $5,000 from various suppliers agreeing to pay the sum within two weeks (Purchase invoice #1). Two-fifth of the supplies will be used for personal purposes while the remaining is for use by AH. Three-fifth of the liability is arranged to be settled from business cash sources.

d. AH received $20,000 cash for consultancy services it rendered to a cash client (Cash sales invoice #1).

e. AH paid $3,000 cash for advertising aired through ETV (Cash payment voucher #1).

f. AH forecasted that services fees in the next two weeks will amount to $5,000.

g. AH received $10,000 additional cash investment from its owner (Cash receipt note #1).

h. AH rendered consultancy services worth $15,000 to clients who promised to pay the sum within a month (Credit sales invoice #1).

i. AH sold one of the furniture invested by its owner for $5,000 cash (Cash receipt note #2). The furniture had a recorded value of $5,000.

j. AH collected $5,000 cash from clients who received services in item-8 above (Cash receipt note #3).

k. AH paid $2,000 cash to suppliers on credit (Cash payment voucher #2).

l. AH purchased a used car for business purposes. The business paid $8,000 cash for the car (Cash payment voucher #3). Brokers estimated that the car currently worth only $5,000 and the Inland Revenue assessed the car at $12,000 for property tax purposes.

m. AH borrowed $4,000 cash from Dashen Bank (Cash receipt note #4). The loan is repayable over ten months.

n. AH employed an accountant and a secretary for monthly salary of $1,200 and $700, respectively (Employment contract #2 and #4).

o. AH incurred and paid for the following expenses(Cash payment voucher #4)
• Wages................................................. $6,000
• Rent.................................................... 4,500
• Utilities................................................ 1,200
• Others.................................................. 800

p. AH determined that cost of supplies remained on hand at the end of the current month total $1,300 (Supplies inventory report #1).

q. AH paid $450 cash to Dashen Bank consisting of $400 principal and $50 one month interest on part of the loan due in January (Cash payment voucher #5).

r. AH paid its owner $5,000 cash to pay house utility expenses (Cash payment voucher #6).

Required:

Question 1: Analyze and record the above events in the financial records of AH Consultancy Services

Question 2: And prepare financial statements for the business for the month of January 2003.

Reference no: EM133369404

Questions Cloud

How do you assess the central banking in the philippines : No plagia-rism. Explain further, own answer. How do you assess the central banking in the philippines? Is it good or what?

Why does the yale endowment have signi?cantly lower exposure : Why does the Yale endowment have signi?cantly lower exposure to global publicly-traded equity markets than the average US university endowment?

What impact did keynes believe business optimism : What impact did Keynes believe business optimism had on the economy?

What is the current occupancy rate for office space in small : What is the current occupancy rate for office space in Small City? How much office space will be absorbed each year for the next three years?

Analyze and record the above events in the financial records : Analyze and record the above events in the financial records of AH Consultancy Services and prepare financial statements for the business for the month

Statistical concept of population : How does using the statistical concept of 'population' to group people instead of race change how you think about human variation

What calendar year did interest rates raise the most : In what calendar year did interest rates raise the most? How much did they raise? In what calendar year did interest rates lower the most? How much did they low

Identify and critically discuss the exchange rate risk : Assuming EAAP enters a credit contract to purchase aluminium steel from a US company to complete its new construction plant at an agreed sum of $1,000,000.00

Concept of race so prevalent in modern society : Why is the concept of race so prevalent in modern society when anthropologists refute its use in virtually all instances?

User Account

All Pages