PGP I year

IIM Amritsar

Accounting Recording System (ARS)

Case 4-4: Waltham Oil and Lube Center, Inc.
List of business transactions that had happened during the month of May to July at the Waltham
Oil and Lube Center.
1.
2.
3.
4.
5.
6.

Mr. Frank Knight invested 40,000 cash as a capital in the business

The amount of 40,000 is deposited with National Oil and Lube Centers
Furniture worth 6,000 purchased on cash
Mr. Knight invested additional capital of 10,000 in cash
Insurance payments of 1,200 paid for 12 months
35,450 deducted from Deposit account towards Oil and grease inventory (6,320),
Operating supplies and uniforms (4,130) and Equipment cost (25,200)
7. On May 1, 1,500 is paid towards lease payment which was otherwise deducted from
Deposit
8. Out of 75,000 worth of Equipment cost, 25,200 is deducted towards his deposit and
remaining amount is treated as a interest free loan from National of worth 49,800
9. Bank account shows a record of 108,600 deposits of revenue which come from day to
day operations includes 105,300 from Service revenue and 3,300 from parking revenue
10. 8,230 of oil and grease inventory purchased during the this period
11. 34,560 is paid towards salaries to all the employees
12. 1,700 is paid for utilities
13. 6,600 is paid for miscellaneous payments
14. 26,400 is paid towards lease rentals includes both fixed and variables components
15. 2,490 is paid towards repayment of loan from National i.e. 830 for 3 months
16. 4,500 is withdrawn by Mr Knight for his personal consumption
17. Mr Knight found that 340 is due for collection towards accounts receivables from parking
services
18. He also found that 730 is receivable from a local merchant towards services
19. He could realize that 2,100 is due for payment towards salaries to employees
20. He also found that 350 is outstanding for utilities payment
21. Cost of sales for the period are found to be 9,260 (i.e. Beginning of inventory 6320 plus
purchases during the period 8,230 out of which available for consumption minus the
ending inventory is 5,290)
22. During this period, depreciation of 150 charged for Furniture (i.e. 6,000/10 years divided
by 1/4 months)
23. During this period, depreciation of 3, 750 charged for Equipment (i.e.75,000/5 years
divided by 1/4 months)
24. Advance revenue received from a customer of 400 towards next month parking services
i.e. Accrued Parking Revenue or Deferred parking revenue
25. Out of 1,200 insurance payment, 300 pertaining to this period is recorded as an expense
Questions:
I.
Record the Journal entries and Ledger accounts
II.
Balance all the Ledger accounts
III.
Prepare Trial Balance, Income Statement and Balance sheet.

PGP I year

IIM Amritsar

The complete assignment to be submitted to Mr Johan by tomorrow 11.30

am through Class Coordinator, Ms. Vandita

Accounting Recording System (ARS)

Case 4-4: Waltham Oil and Lube Center, Inc.

List of Accounts to be prepared

1. Cash
2. Capital
3. Deposit with National
4. Furniture
5. Prepaid Insurance
6. Oil and grease inventory
7. Operating supplies and uniforms
8. Equipment
9. Lease payments
10. Interest free loan from National
11. Services Revenue
12. Parking Revenue
13. Salaries
14. Utilities
15. Miscellaneous expenses
16. Withdrawal
17. Accounts receivable Parking Revenue
18. Accounts receivable Services Revenue
19. Salaries payable
20. Utilities payable
21. Depreciation on Furniture
22. Depreciation on Equipment
23. Accumulated Depreciation
24. Advance Parking Revenue or Deferred parking revenue
25. Insurance expense