Introduction to Financial Accounting

ACT 201

Spring 2022

Assignment 1

Marks: 8

Mr. Prodosh C. Mitter, a private investigator, started a business of detective services called

Mitters & Associates on January 1 1974. Following transactions have occurred in the first

month.

1. On January 1, Mr Mitter invested BDT100,000 in cash as capital.

2. On January 1, he paid BDT3000 for 3-months rent for the office premises at 21 Rajani

Sen Road.

3. On January 2 purchased office supplies worth BDT800.

4. On January 4, Mr Mitter opened a bank account for Mitters & Associates and deposited

BDT15000 from the cash in hand into the bank account.

5. On January 5, he received BDT2000 from Mr Dhar as an advance payment for his

service to investigate who wants to abduct Mukul Dhar and follow Dr Hemanga Hajra.

The rest of the fees will be paid upon solving the case.

6. Mr Mitter sense that it was going to be a dangerous case and purchased a .32 Colt revolver with BDT10,000 on January 6 by issuing a promissory note. He intends to use it for work purposes, and you can consider this revolver as office equipment for the business.

7. On January 6, Mr Mitter paid cash $600 for a one-year insurance policy for the revolver.

8. Mr Mitter decided to go to Rajasthan to follow Dr Hajra and Mukul. So, on January 7,

he purchased two train tickets for himself and his cousin, Tapesh Ranjan Mitter, who

is also his assistant and assisting him in the current case. He paid BDT400 in cash for

the tickets and BDT1400 for a room at Jodhpur Circuit House where they will stay

while investigating the case.

9. After 3 days of detailed investigation, on January 10 he cracked the case and found that

Dr Hajra is a good man and really trying to help Mukul. Two conman Mandar Bose

and Amiyanath Burman were the bad guys who abducted Mukul. You can consider the

service have been performed.

10. After successfully solving the case Mr Mitter gained overnight fame and he decided to

sell Feludas merchandise products. On January 15 he purchased products worth of

BDT20,000 from Mr Jatayu, FOB shipping point, terms 2/10, n/30. Assume that Mr.

Mitter uses a perpetual inventory system.

11. Mr Mitter paid fright cost of BDT900 on January 16.

12. On January 17, Mr Mitter sold BDT18000 of merchandise to Ananda Publishers,

terms 5/10, n/30. The cost of the merchandise sold was BDT12000.

13. On January 18, Ananda Publishers returned BDT4,000 of the merchandise purchased

on January 17. The cost of the returned merchandise was BDT2,000.

14. Damaged goods totalling BDT2,000 are returned to Mr Jatayu for credit on January 19.

The fair value of these goods is $1300.

15. Received full amount from Ananda Publishers on January 23

16. On January 24 Mr Mitter paid Mr Jatayu in full.

Instructions:

1. Journalize the transactions. (You may omit explanation)

2. Open ledger account and post the January transactions.

3. Prepare an income statement for the month ended January 31, 1974

4. Prepare a classified statement of financial position at January 31, 1974