1. Project 1 problem solving
Name:- abdulaziz alabdulkader 2

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

3. 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 ,000
Cash ,000
Adjusting Entry:
Dec 31, 2003 Interest Receivable
Interest Revenue
(Accrue one month’s interest)
* 8,000 * 12% * 1/12 = 80

4. 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
Cash
Adjusting Entry:
Dec 31, 2003 Rent Expense
Prepaid Rent

5. 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 ,000
Note Payable ,000
Adjusting Entry:
Dec 31, 2003 Interest Expense
Interest Payable
(Accrue one month’s interest)
*8,000 * 12% * 1/12 = 80

6. 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

7. Thank you