On October 1, 2018 Abdullah formed Accounting Consulting Co. to provide accounting services. The following are September 30th, 2019 balances from its ledger (Saudi Riyal):
Cash 50,000, Accounts Receivable 20,000 , Office Supplies 5,000 , Office Equipment 15,000, Accumulated Depreciation – Office Equipment 1,500 , Accounts Payable 8,500 , Owner capital 80,000
During the last quarter of the year 2019, the following transactions occurred:
Oct 1, 2019
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hired 2 accountants for a weekly salary of S.R 2,000 each, payable monthly.
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Oct 1, 2019
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Paid S.R 24,000 to Alnabil Realtors for 6 month’s rent, paid in advance.
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Oct 1, 2019
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Paid insurance for one year for S.R12,000
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Oct10, 2019
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Conducted accounting services for customers, S.R 15,000, and only one-third of the amount was received.
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Oct 20, 2019
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Purchased a new computer for S.R 3,500 cash.
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Oct 31, 2019
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Paid employee’s salaries of S.R 40,000.
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Nov 15, 2019
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Signed a contract regarding Alburj’ bookkeeping work and received S.R 100,000 cash from client as an advance payment for services to be completed at the end of January 2020
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Nov28
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Received cash from clients on account, S.R 8000.
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Nov30, 2019
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Paid employee’s salaries of S.R 35,000.
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December 2, 2019
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Received cash S.R 40,000, furniture S.R 20,000, car S.R 80,000 as an additional investment from the owner.
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December 31, 2019
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Withdrew S.R 3000 by the owner for personal use
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December 31, 2019
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Paid telephone bill and electricity bill for the period, S.R 1500, SR. 3000, respectively.
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In addition to data mentioned on above transactions, Other data to be used in adjustment:
- Office equipment depreciates annually on basis of 10% of its cost.
- The December salaries, S.R 25,000, have not been paid or recorded.
The office performs adjusting entries quarterly. Closing entries are performed annually on December 31.
Instructions:
Classified balance sheet