Yardsticks International College Departments of Masters of
Business Administration (MBA)
Course Name: Financial and Managerial Accounting
Course Code: 631
Individual assignment on: Illustrate Transaction during net
Solutions’ First month of operations
Name Section ID No
Adem Adem Seid “A” MBA (1)023/13
Submission date 21/06/2013 E.C
Submission to Dr. Mussie
Yardsticks International College Addis Ababa Ethiopia
1. Each transaction during Net Solutions’ first month of operations is described in the
following paragraphs.
1. Nov. 1, 2009 Chris Clark deposits $25,000 in a bank account in the name of Net
Solutions.
Owner’s Equity
Solution
2. Nov. 5, 2009 Net Solutions paid $20,000 for the purchase of land as a future building site.
Solution Assets Owner’s Equity
Cash+land Chris Clark, Capital
BAL. -20,000 +20,000 25,000
5000 2,0000 25,000
3. Nov. 10, 2009 Net Solutions purchased supplies for $1,350 and agreed to pay the supplier
in the near future.
Asset
Solution Liabilities + Owner’s Equity
Cash + Supplies + Land
Bal.
5,000 20,000 Capital
+1,350 +1,350
1,350 25,000
5,000 1,350 20,000
4. Nov. 18, 2009 Net Solutions received cash of $7,500 for providing services to customers.
Assets = Liabilities + Owner’s Equity
Solution
Accounts Chris Clark, Fees
Cash + Supplies + Land = Payable + Capital + Earned
Bal. 5,000 1,350 20,000 1,350 25,000
+7,500 +7,500
Bal. 12,500 1,350 20,000 1,350 25,000 7,500
[Link]. 30, 2009 Net Solutions paid the following expenses during the month: wages, $2,
125; rent, $800; utilities, $450; and miscellaneous, $275.
Solution
Liabilities + Owner’s Equity
+ + Earned — Exp.
Bal. 12,500 1,350 20,000 — Exp. — Exp. — Exp.
7,500
—3,650
25,0
6. Nov. 30, 2009 Net Solutions paid creditors on account, $950.
Solution
= Liabilities + Owner’s Equity
Utilities Misc.
Exp. — Exp.
+ Earned — Exp.
8,850 1,350 20,000 1,350 —450 —275
7,500 —800
—950 25,0
7,900 —450 —275
—800
7. Nov. 30, 2009 Chris Clark determined that the cost of supplies on hand at the end of the
month was $550.
Solution
=
Liabilities + Owner’s Equity
Capital + Earned — Exp. — Exp. — Exp. — Exp. — Exp.
7,500 —450
7,900 1,350 20,000
25,0 —450
20,0
8. Nov. 30, 2009 Chris Clark withdrew $2,000 from Net Solutions for personal use.
Assets = Liabilities + Owner’s Equity
Accounts Chris Clark, Chris Clark, Fees Wages Rent Supplies Utilities Misc.
Cash + Supp. + Land Payable +Capital — Drawing + Earned — Exp. — Exp. — Exp. — Exp. — Exp.
7,900 550 20,000 400 25,000 7,500—2,125 —800 —800 —450 — 275
-2,000 —2,000
5,900 550 20,000 400 25,000 —2,000 7,500 —2,125 —800—800 —450 — 275
1. Income statement:-a summary of the revenue and expenses for a specific period of time,
such as a month or a year.
2. Balance sheet:-a list of the assets, liabilities, and owner’s equity as of a specific date, usually
at the close of the last day of a month or a year.
3. Statement of owner’s equity: - summary of the changes in the owner’s equity have occurred
during a specific period of time, such as a month or a year.
4. Statement of cash flows:-a summary of the cash receipts and cash payments for a specific
period of time, such as a month or a year.