Principles of Accounting

Daffodil International University Department of Information Technology & Management Faculty of Science & Information Technology Final Examination, FALL 2024 Course Code: ITM101, Course Title: Principles of Accounting Instructor: DAR Date: Time: Total Marks: 40 Exam instructions: A) Answer all the Questions. [at right side the allocated marks and corresponding course outcomes are indicated] B) During the exam you are not allowed to leave the exam hall to have water or restroom, but if you finish early, you may leave the hall submitting the script. C) Do not keep your mobile phone or digital watch in your bag during the exam and keep all your belongings in a secure place. D) Be respectful to the Exam ethics. Use own Stationary. No | Questions | Marks | CLO Level 1 | a) What is the purpose of adjusting entries? b) Contrast between accounts payable and accounts receivable. c) How do you calculate net income? | 6 | CLO-1 L2 2 | Natalie Koebel started his own food delivery service, Foodway, on August 1, 2023. The following transactions occurred during the month of August. Aug 1 Goerge invested $10,000 cash in the business. 2 Purchased a used van for deliveries for $12,000. Goerge paid $2,000 cash and signed a note payable for the remaining balance. 3 Paid $500 for office rent for the month. 5 Performed $4,400 of services on account. 9 Withdrew $200 cash for personal use. 12 Purchased supplies for $150 on account. 15 Received a cash payment of $1,250 for services performed on Aug 5. 17 Purchased gasoline for $200 on account. 20 Received a cash payment of $1,300 for services performed. 23 Made a cash payment of $600 on the note payable. 26 Paid $250 for utilities. 29 Paid for the gasoline purchased on account on Aug 17. 31 Paid $1,000 for employee salaries. Instructions (a) Identify the journal entries to record each of the events listed. (Please provide explanations for each transaction) (b) Determine the ledger and Balance sheet | 12 | CLO-4 L-3 3. | The comparative statements of INCEPTA Company are presented below: INCEPTA COMPANY Income Statement For the Years Ended December 31 | 2022 Net sales (all on account) | $595,000 Expenses: Cost of goods sold | 415,000 Selling and administrative | 120,800 Interest expense | 7,800 Income tax expense | 15,000 Total expenses | 558,600 Net Income | Tk 36,400 INCEPTA COMPANY Balance Sheets December 31 Assets | 2022 Current assets Cash | Tk 21,000 Short-term investments | 18,000 Accounts receivable (net) | 91,000 Inventory | 85,000 Total current assets | 215,000 Plant assets (net) | 423,000 Total assets | Tk 638,000 Liabilities and Stockholders' Equity Current liabilities Accounts payable | Tk 122,000 Income taxes payable | 23,000 Total current liabilities | 145,000 Long-term liabilities Bonds payable | 120,000 Total liabilities | 265,000 Stockholders' equity Common stock ($5 par) | 150,000 Retained earnings | 223,000 Total stockholders' equity | 373,000 Total liabilities and stockholders' equity | 638,000 Instructions: Analyse the following ratios for 2022. (Explanation is obligatory) (a) Current ratio. (b) Inventory turnover. (c) Profit margin ratio. (d) Times interest earned (e) Debt to assets ratio. (f) Return on assets. | 12 | CLO-4 L-4 4. | Rothstein Corporation began operations as a private investigator on January 1, 2023. The trial balance columns of the worksheet for Rothstein., on March 31 are as follows. ROTHSTEIN CORPORATION Worksheet For the Quarter Ended March 31, 2023 Accounts Title | Dr. | Cr. Cash | 11,400 | Accounts Receivable | 5,620 | Supplies | 1050 | Prepaid Insurance | 2,400 | Equipment | 30,000 | Notes Payable | | 10,000 Accounts Payable | | 12,350 Owner's Capital | | 20,000 Owner's Drawings | 600 | Service Revenue | | 13,620 Salaries and Wages Expense | 2,200 | Travel Expense | 1,300 | Rent Expense | 1,200 | Miscellaneous Expense | 200 | Conditions: 1. Supplies on hand total $480. 2. Depreciation-is $800 per quarter. 3. Interest accrued on 6-month note payable, issued January 1, $300. 4. Insurance expires at the rate of $200 per month. 5. Services performed but unbilled at March 31 total $1,030. Instructions: a. Identify the adjusting journals. b. Demonstrate the worksheet. | 10 | CLO-4 L-3