Project 1 problem solving Name:- abdulaziz alabdulkader 200700707 2

The balance sheet is a statement of the financial position of a business which states the assets, liabilities, and owners' equity at a particular point in time. In other words, the Balance Sheet illustrates your business's net worth. All accounts in your General Ledger are categorized as an asset, a liability or equity. The relationship between them is expressed in this equation: Assets = Liabilities + Equity. The Balance Sheet is divided into these three sections

Preparation of a classified balance sheet On Dec 1, 2003, Mr. Lender makes a loan of $8,000 to Mr. Borrower. The loan term is 3 months. The interest rate is 12% per year. Lender receives a note. Date Account Dr Cr Dec 01, 2003 Note Receivable 8,000 Cash 8,000 Adjusting Entry: Dec 31, 2003 Interest Receivable 80 Interest Revenue 80 (Accrue one month’s interest) * 8,000 * 12% * 1/12 = 80

On Dec 1, 2003, Mr. Tenant pays $800 as advance payment toward rent. The rental term begins on December 1, 2003, with monthly rental of $400. Date Account Dr Cr Dec 01, 2003 Prepaid Rent 800 Cash 800 Adjusting Entry: Dec 31, 2003 Rent Expense 400 Prepaid Rent 400

On Dec 1, 2003, Mr. Borrower takes a loan of $8,000 from Mr. Lender. The loan term is 3 months. The interest rate is 12% per year. Lender receives a note for the amount. Date Account Dr Cr Dec 01, 2003 Cash 8,000 Note Payable 8,000 Adjusting Entry: Dec 31, 2003 Interest Expense 80 Interest Payable 80 (Accrue one month’s interest) *8,000 * 12% * 1/12 = 80

Intell Company has the following balances on December 31, 2003 (see table). The company uses a periodic inventory system. Inventory count on December 31, 2003 was $62,000. Purchases (gross) $400,000 Purchase Returns $27,000 Freight In $12,000 Inventory (1/1/2003) $46,000

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