Assignment - 1 MBA 1303

Bangladesh Open University

MBA Program
Semester: 211; Level: 1st
Course Title: Financial Accounting Submit by January 12, 2024

Instructions for Assignment Submission

1. Answer all questions in your own handwriting on A4 size white paper.
2. Fill-in the cover page (see page#6 of Academic Calendar) of your assignment with care.
3. Submit the assignment to the study centre coordinator or his/her delegate and ensure his/her
signature on your Assignment Acknowledgement Form (see page#7 of Academic Calendar).
4. Don’t make spiral binding. Instead, make soft binding.
5. If it is noticed that your assignment is copied from another student’s assignment, your
assignment will automatically be cancelled.
6. In the case of delayed submission, the School will not acknowledge the submission of the
assignment(s) and will not be responsible for any damage or loss of the assignment(s).
7. Preserve the photocopy of each assignment so that you can claim its marks if your marksheet
shows "Not submitted" or "Zero" in assignment(s).
8. Join the WhatsApp group (https://chat.whatsapp.com/GcS9jcPWT4qIABrgrZ3zpq) if you haven’t
yet joined.

Questions

1. (a) Can a business enter into a transaction in which only the left side of the basic accounting
equation is affected? If so, give an example.
(b) Monjurul Haque opened a law office, Monjurul Haque, Attorney at Law, on July 1, 2023. On
July 31, The balance sheet showed cash Tk.400,000, Accounts Receivable Tk.1,50,000,
Supplies Tk.50,000, Office Equipment Tk.5,00,000, Accounts Payable Tk.4,20,000, and
Monjurul Haque, Capital Tk.6,80,000. During August the following transactions occurred.
i. Collected Tk.1,40,000 of accounts receivable.
ii. Paid Tk.2,70,000 cash on accounts payable.
iii. Earned fees for Tk.6,40,000, of which Tk.3,00,000 is collected in cash and the
balance is due in September.
iv. Purchased additional office equipment for Tk.1,00,000, paying Tk.40,000 in cash
and the balance on account.
v. Paid salaries Tk.1,50,000, rent for August Tk.90,000, and advertising expenses
Tk.35,000.
vi. Withdrew Tk.55,000 in cash for personal use.
vii. Received Tk.2,00,000 from Standard Bank money borrowed on a note payable,
viii. Incurred utility expenses for the month on account Tk.25,000.
Required:
(i) Prepare a tabular analysis of the August transactions, beginning with July 31 balances.
The column heading should be as follows: Cash + Accounts Receivable + Supplies +
Office Equipment = Notes Payable + Accounts Payable + Monjurul Haque, Capital.
(ii) Prepare an income statement for August, an owner’s equity statement for August, and a
balance sheet at August 31.

MBA 211/Dr. SI/MBA 1303-SI Page # 1

2. Lars Linken opened Lars Cleaners on March 1, 2023. During March, the following
transactions were completed.
Mar. 1 Owner invested Tk.1500,000 cash in the company.
1 Borrowed Tk.6,00,000 cash by signing a 6-month, 6%, Tk.6,00,000
note payable. Interest will be paid the first day of each subsequent
month.
1 Purchased used truck for Tk.8,00,000 cash.
2 Paid Tk.1,50,000 cash to cover rent from March 1 through May 31.
3 Paid Tk.2,40,000 cash on a 6-month insurance policy effective March 1.
6 Purchased cleaning supplies for Tk.2,00,000 on account.
14 Billed customers Tk.3,70,000 for cleaning services performed.
18 Paid Tk.50,000 on amount owed on cleaning supplies.
20 Paid Tk.1,75,000 cash for employee salaries.
21 Collected Tk.1,60,000 cash from customers billed on March 14.
28 Billed customers Tk.4,20,000 for cleaning services performed.
31 Paid Tk.35,000 for gas and oil used in truck during month (use
Maintenance and Repairs Expense).
31 Owner withdrew Tk.90,000 cash from the company.

The chart of accounts for Lars Cleaners contains the following accounts: Cash, Accounts
Receivable, Supplies, Prepaid Insurance, Prepaid Rent, Equipment, Accumulated
Depreciation—Equipment, Accounts Payable, Salaries and Wages Payable, Notes Payable,
Interest Payable, Owner’s Capital, Owner’s Drawings, Income Summary, Service Revenue,
Maintenance and Repairs Expense, Supplies Expense, Depreciation Expense, Insurance
Expense, Salaries and Wages Expense, Rent Expense, and Interest Expense.
Required:
(a) Journalize the March transactions.
(b) Post to the ledger accounts.
(c) Prepare a trial balance at March 31.
(d) Journalize the following adjustments.
(i) Services performed but unbilled and uncollected at March 31 were Tk.20,000.
(ii) Depreciation on equipment for the month was Tk.25,000.
(iii) One-sixth of the insurance expired.
(iv) An inventory count shows Tk.28,000 of cleaning supplies on hand at March 31.
(v) Accrued but unpaid employee salaries were Tk.1,08,000.
(vi) One month of the prepaid rent has expired.
(vii) One month of interest expense related to the note payable has accrued and will be
paid April 1.
(e) Post adjusting entries to the ledger.
(f) Prepare an adjusted trial balance.
(g) Prepare the income statement and an owner’s equity statement for March and a classified
balance sheet at March 31.

MBA 211/Dr. SI/MBA 1303-SI Page # 2

4. Karim’s Book Warehouse distributes hardcover books to retail stores and extends credit
terms of 2/10, n/30 to all of its customers. At the end of May, Karim’s inventory consisted of
books purchased for Tk.1,80,000. During June, the following merchandising transactions
occurred.
June 1 Purchased books on account for Tk.1,60,000 from Binsfeld Publishers, FOB
destination, terms 2/10, n/30. The appropriate party also made a cash payment of
Tk.5,000 for the freight on this date.
3 Sold books on account to Reading Rainbow for Tk.2,50,000. The cost of the books
sold was Tk.1,44,000.
6 Received Tk.10,000 credit for books returned to Binsfeld Publishers.
9 Paid Binsfeld Publishers in full, less discount.
15 Received payment in full from Reading Rainbow.
17 Sold books on account to Rapp Books for Tk.1,80,000. The cost of the books sold
was Tk.1,08,000.
20 Purchased books on account for Tk.1,80,000 from McGinn Publishers, FOB
destination, terms 2/15, n/30. The appropriate party also made a cash payment of
Tk.6,000 for the freight on this date.
24 Received payment in full from Rapp Books.
26 Paid McGinn Publishers in full, less discount.
28 Sold books on account to Baeten Bookstore for Tk.1,60,000. The cost of the books
sold was Tk.97,000.
30 Granted Baeten Bookstore Tk.12,000 credit for books returned costing Tk.72,00.

Karim’s Book Warehouse’s chart of accounts includes the following: No. 101 Cash, No. 112
Accounts Receivable, No. 120 Inventory, No. 201 Accounts Payable, No. 401 Sales Revenue,
No. 412 Sales Returns and Allowances, No. 414 Sales Discounts, and No. 505 Cost of Goods
Sold.
Required:
Journalize the transactions for the month of June for Karim’s Book Warehouse using a
perpetual inventory system.

MBA 211/Dr. SI/MBA 1303-SI Page # 3

 Assignment - 2 MBA 1303
Bangladesh Open University
MBA Program
Semester: 211; Level: 1st
Course Title: Financial Accounting Submit by February 23, 2024

(The assignment is to be presented in own handwriting on A4 size white pages)

Questions
1. (a) “Depreciation provides funds for replacement of plant assets.” Do you agree? Explain
with examples.
(b) On January 1, 2020, Miyako Electronics Company, an electronic tool manufacturer,
acquired a piece of new industrial equipment for Tk. 120,000. The equipment had a
useful life of 8 years and salvage value was estimated to be Tk. 20,000 and its total
production is estimated 48,000 units. Miyako Company estimated that the new
equipment can produce 10,000 electronic tools in its first year. It estimates that
production will decline by 1,000 units per year over the remaining life of the equipment.
The straight-line, units of output, double declining balance, and sum-of-the- years’ digits
methods may be used.
Required:
(i) Which depreciation method would minimize net income for income tax reporting for
the three years period ending December 31, 2022?
(ii) Which depreciation method would maximize net income for financial statement
reporting for the three years period ending December 31, 2022?

2. (a) Describe the two most commonly used methods of estimating uncollectible accounts
expense when the allowance method is employed.
(b) You are provided with the following information for Ashraf Textiles Ltd. for the month
ended October 31, 2014. The company uses a periodic method for inventory.
Unit Cost or
Date Description Units Selling Price
October 1 Beginning inventory 60 Tk.24
October 9 Purchase 120 26
October 11 Sale 100 35
October 17 Purchase 70 27
October 22 Sale 65 40
October 25 Purchase 80 28
October 29 Sale 120 40
Reqiured:
(i) Calculate (a) ending inventory, (b) cost of goods sold, (c) gross profit, and (d) gross
profit rate under each of the following methods.
(1) FIFO.
(2) Average-cost.
(ii) Compare results for the two cost flow assumptions.

MBA 211/Dr. SI/MBA 1303-SI Page # 4

3. (a) Explain the procedure for issuance of shares in Bangladesh.
(b) Moonlit Limited was organized on January 1, 2023. It is authorized to issue 10,000 8%,
Tk.1,000 par value preference shares, and 500,000 no-par ordinary shares with a stated
value of Tk.20 per share. The following share transactions were completed during the
first year.
Jan. 10 Issued 100,000 ordinary shares for cash at Tk.48 per share.
Mar. 1 Issued 5,000 preference shares for cash at Tk.1,050 per share.
Apr. 1 Issued 18,000 ordinary shares for land. The asking price of the
land was Tk.980,000. The fair value of the land was Tk.920,000.
May 1 Issued 80,000 ordinary shares for cash at Tk.45 per share.
Aug. 1 Issued 10,000 ordinary shares to attorneys in payment of their bill
of Tk.320,000 for services provided in helping the company
organize.
Sept. 1 Issued 10,000 ordinary shares for cash at Tk.50 per share.
Nov. 1 Issued 1,000 preference shares for cash at Tk.1,060 per share.
Required:
(i) Journalize the transactions.
(ii) Post to the equity accounts.
(iii) Prepare the share capital section of the statement of financial position at December
31, 2023.

MBA 211/Dr. SI/MBA 1303-SI Page # 5

 Assignment - 3 MBA 1303
Bangladesh Open University
MBA Program
Semester: 211; Level: 1st
Course Title: Financial Accounting Submit by March 22, 2024
(The assignment is to be presented in own handwriting on A4 size white pages)
Questions

1. (a) Describe how contingent liabilities and preliminary expenses are treated on the balance sheet.
(b) The Trial Balance of Miskat Wholesale Company contained the following accounts at
December 31, the end of the company’s current fiscal year:
Miskat Wholesale Company
Trial Balance
December 31, 2023
Accounts Titles Debit Credit
Cash Tk. 33,400
Account Receivable 37,600
Merchandise Inventory 1,00,000
Land 92,000
Building 1,97,000
Accumulated Depreciation-Building Tk. 54,000
Equipment 83,500
Accumulated Depreciation-Equipment 42,400
Notes Payable 50,000
Accounts Payable 37,500
Nahid, Capital 2,97,800
Nahid, Drawing 20,000
Sales 9,02,100
Sales Discounts 4,600
Cost of Goods Sold 7,09,900
Salaries Expense 69,800
Utilities Expense 19,400
Repair Expense 5,900
Gas and Oil Expense 7,200
Insurance Expense 3,500
Total Tk. 13,83,800 Tk. 13,83,800

Adjustment Data:
(i) Depreciation is Tk. 20,000 on building and Tk. 18,000 on equipment (Both are
administrative expenses)
(ii) Interest of Tk. 7,000 is due and unpaid on notes payable at December 31.
Other data:
(iii) Salaries are 80% selling and 20% administrative.
(iv) Utilities expense, repair expense, and insurance expense are 100% administrative.
(v) Gas and oil expense is a selling expense.
Required:
Prepare a classified income statement and an owner’s equity statement for the year ended
December 31, 2023, and a classified balance sheet as at December 31, 2023.

MBA 211/Dr. SI/MBA 1303-SI Page # 6