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Financial Accounting (mgt101) Comprehensive assignmentFall Semester 2008
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On September 1
, 2007, Mr. Afnan organized a business called Tony’s Rentalsfor the purchase of operating an equipment rental yard. Mr. Afnan’s newbusiness was able to begin operations immediately by purchasing the assets andtaking over the location of Rent-IT, an equipment rental company that was goingout of business.The company closes its accounts and prepares financial statements at the end ofeach month.
During September, company entered into the following businesstransactions/events:Sept 1, Mr. Afnan deposited Rs. 1, 00,000 cash name of Business, Tony’sRentals.Sept1, Paid Rs. 9000 to Mr. Irfan as three month’s advance rent on the rentalyard and office formerly occupied by Rent-IT.Sept 1, Purchased for Rs. 180,000 all the equipment from Rent –IT. Paid Rs.70,000 cash and issued a one year notes payable for Rs. 110,000,plus interest at the annual rate of 9%.Sept 4, Purchased office supplies on account from Modern office Co; Rs.1,630. Payment due in 30 days (these supplies are expected to lastfor several months; so debit the office supplies asset account)Sept 8, Received Rs. 10,000 cash from McBrayan Construction Co. asadvance payment on rental equipment.Sept 12, Paid salaries for the first two weeks in September Rs. 3,600Sept15, Excluding the McBrayan Construction Co advance, equipment rentalfees earned during the first 15 days of September amounted Rs.6100, out of which Rs. 5,300 was received in Cash.Sept17, Purchased on account from the Earth Movers, Inc., Rs. 340 in partsneeded to repair a rental tractor. Payment is due in 10 days.Sept23, Collected Rs. 210 of accounts receivable recorded on September 15.Sept 25, Rented a backhoe (digging machine) to Mission Landscaping at aprice of Rs. 100 per day, to be paid when the backhoe is returned.Mission landscaping expects to keep the backhoe for about two orthree weeks.Sept 26, Paid biweekly salaries, Rs.3, 600.Sept 27, Paid the account payable to the Earth Movers, Inc., Rs.340.Sept 28, Mr. Afnan withdrew Rs. 2,000 cash from business to pay the rent onhis personal residence.Sept 29, Purchased a 12 month public –liability insurance policy for Rs. 2,700.The policy protects the company against the liability for injuries and