Reference no: EM133108075

Question 1 - Record the following accounting entries in the General Journal.

1. The Health Department of a Hospital bought X-Ray equipment for $100,000. The date today is Jan 15. They will pay the supplier after 4 months.

2. On February 28 they received a utility bill for the Hospital for $32,400. This bill is for the month of February. They will pay this bill on March 15. Record this transaction.

3. The Provincial Government allocates funds to the Hospital in January and in July every year. The Hospital has received their Grant of $12,000,000 on July 5. Funds have been transferred to the Hospital's Bank Account. Record this transaction. .

4. Record the payment for the X-Ray machine discussed in item (a).

5. The hospital also offers training services to other doctors visiting from the U.S.A. The training course is for one month and they are charging $75,000. The training was given in March. Record this event on the 31st of March.

6. Payment for the Training course was received on April 20. Record this transaction in the General Journal.

7. Record the Annual depreciation for the X-Ray machine bought in January. The date is December 31, 2010. The X-Ray machine is depreciated on a four year straight line basis with zero salvage value.

8. Create a ledger account for bank/cash for the above mentioned transactions. The opening balance of the cash account is $180,000. Work out the closing balance

Question 2 - A government organization has bought a new computer system for its organization. The cost of the computer system is $2,800,000. The computer system has a useful life of four years. At the end of four years the system will be scrapped. The computer was bought at the end on 15th December 2005. At the time of purchase the organization paid $1,300,000. The remaining amount was paid in the next fiscal year on 1st of June 2006.

Record the amount of expenses under an Accrual System of Accounting and under the Cash System of Accounting.