1. Ms. Anna started her business (Anna Car Repairing Shop) on January 1, 2018. During the first

month of its operations, the business engaged in the following transactions:

Date Transactions

Jan 1 Anna invested cash $100,000 as initial capital to start the business.

Jan 2 An amount of $36,000 was paid as advance rent for three months.

Jan 3 Paid $60,000 cash on the purchase of equipment costing $80,000. The remaining amount was recognized as note payable.

Jan 4 Purchased office supplies costing $17,600 on account.

Jan 13 Provided services to its customers and received $28,500 in cash.

Jan 13 Paid the accounts payable on the office supplies purchased on January 4.

Jan 14 Paid wages to its employees for the month of January, aggregating $19,100.

Jan 18 Provided $54,100 worth of services to its customers. They paid $32,900 and promised to pay the remaining amount in the next month.

Jan 23 Received $15,300 from customers for the services provided on January 18.

Jan 25 Received $4,000 as an advance payment from customers.

Jan 26 Purchased office supplies costing $5,200 on account.

Jan 28 Paid water bill of $19,000 for January

Jan 31 Paid $5,000 advertising expense.

Jan 31 Received electricity bill of $2,470 for January.

Jan 31 Received telephone bill of $1,494 for January.

Jan 31 Miscellaneous expenses paid during the month totaled $3,470.

Instructions:

a) Journalize the transactions with explanations (Ignore the reference numbers). (16)

b) Post the transactions in the ledger account. (16)

c) Prepare a Trial Balance for Jan 31, 2018. (10)

d) Prepare an Income Statement and a classified Balance for Jan 31, 2018 based on the information

available in the trial balance. (10)

2. Write short notes on the following accounting principles with proper example: (18)

a) Cost Principle

b) Economic Entity Assumption

c) Monetary Unit Assumption

d) Going Concern

e) Periodicity

f) Revenue Recognition Principle

g) Matching Concept

h) Accrual Basis of Accounting

i) Dual Aspect of Accounting