Overview
Assignment Two
Saif opened a Bike Repair Shop in Dubai on March 1. During March, the following transactions were completed:
- March 1: Invested AED15,000 cash into the business.
- March 2: Purchased equipment for AED8,000, paying AED4,000 in cash and the balance on account.
- March 4: Purchased repair supplies for AED1,500 on account.
- March 6: Paid AED1,500 cash for a one-year insurance policy effective April 1.
- March 12: Billed customers AED6,000 for repair services.
- March 15: Paid AED2,000 cash on the amount owed for equipment and AED600 on the amount owed for supplies.
- March 18: Paid AED2,500 cash for employee salaries.
- March 20: Collected AED2,000 cash from customers billed on March 12.
- March 25: Billed customers AED3,800 for repair services.
- March 29: Paid AED300 cash for electricity and utilities for the shop.
- March 31: Withdrew AED900 cash for personal use.
Instructions
- Journalize and post the March transactions.
- Prepare a trial balance at March 31 on a worksheet.
- Journalize and post the following adjusting entries.
- Earned but unbilled revenue at March 31 was AED1,200.
- Depreciation on equipment for the month was AED300.
- One-twelfth of the insurance expired.
- An inventory count shows AED600 of repair supplies on hand at March 31.
- Accrued but unpaid employee salaries were AED700.
- Prepare the income statement and owner’s equity statement for March and a classified balance sheet at March 31.
- Journalize and post-closing entries and complete the closing process.
- Prepare a post-closing trial balance at March 31.
- Illustrate how accounting principles were applied in meeting IFRS requirement, supported by specific examples from the above requirements.
- Provide an analytical discussion of the financial statements, highlighting key insights into the financial performance and position of the business