Exercise 1

ABC is a company which provides accounting and legal services. During January, the following events and transactions occurred:

On January 2, Mohamed and Kamel decide to open ABC Company. They invest 20,000 SAR cash in ABC Company in exchange for 20,000 SAR of ordinary shares.

On January 3, ABC receives 10,000 SAR in cash from XYZ Company for services provided in January.

On January 4, ABC purchases on account a land costing 30,000 SAR.

On January 5, ABC pays office rent for January in cash 3,000 SAR.

On January 6, ABC pays in cash 1,000 SAR for a one-year insurance policy.

On January 10, ABC pays a 3,000 SAR cash dividend to shareholders.

On January 14, ABC pays in cash employee salaries of 2,400 SAR.

On January 18, ABC purchases supply of materials in cash for 1,500 SAR.

On January 24, ABC pays 800 SAR bills in cash. The company previously recorded the bills as an increase in Accounts payable.

Instructions

1. Journalize the January transactions
2. Post the January transactions
3. prepare the trial balance of ABC on January 31

Exercise 2

XYZ is a company which provides services. It was set on January 2, 2015. During the first month of operations, the following events and transactions occurred:

1.On January 2, Mahdi and Karim invest 40,000 SAR cash in XYZ Company in exchange for 40,000 SAR of ordinary shares.

2.On January 3, XYZ receives 10,000 SAR in cash from customers.

3.On January 6, XYZ purchases supplies in cash for 4,500 SAR.

4.On January 9, XYZ pays rent for January in cash 6,000 SAR.

5. On January 12, XYZ provides 12,000 SAR of services for customers. The company receives cash of 5,000 SAR and the remaining balance will be paid next month.

6. On January 16, XYZ purchases on account equipment costing 5,000 SAR.

7. On January 19, XYZ pays in cash 1,500 SAR for insurance policy.

8.On January 22, XYZ pays in cash employee salaries of 2,400 SAR.

9. On January 25, XYZ receives a 1,000 SAR cash advance from a client for services that are expected to be completed by March 31.

Instructions:Journalize the January transactions

Exercise 3

MSN is a company which provides services. During the first month of operations, the following events and transactions occurred:

On March 2, Mounir and Farid decided to open MSN Company. They invested 40,000 SAR cash in MSN Company in exchange for ordinary shares.

On March 4, MSN purchased a supply of materials on account costing 5,000 SAR.

On March 5, MSN performed services for 20,000 SAR. The payment by the customer will be made on March 24.

On March 10, MSN paid a 6,000 SAR cash dividend to shareholders.

On March 14, MSN paid in cash employee salaries of 4,800 SAR.

On March 24, MSN received 20,000 SAR in cash for the services performed on March 5.

Instructions

1. Journalize the March transactions
2. Post the March transactions to the ledger
3. Prepare a trial balance at the end of March