Balance Sheet Example Question- direct accounting approach

Assume the facts in Q12 you have already attempted. That is;

Hyperlink Co. ltd carried out the following transactions in the year 2018.

(a.) Paid insurance in cash for its properties for eight months amounting to $160,000. The    monthly rate was $20,000

(b.) Paid rent expenses for one year amounting to $150,000 by check

(c.) Paid advertisement expense of $540,000 to cover one and half year’s period by check.

(d.) Received commission income of $100,000 by check for ten month’s period


Record the above transactions in the respective ledger accounts

Prepare a common profit and loss accounts for the year ended 31/12/2018

Extract a common balance sheet as at 31/12/2018

NB: Hint; use the Direct accounting approach

Related questions

About the Author - Dr Geoffrey Mbuva(PhD-Finance) is a lecturer of Finance and Accountancy at Kenyatta University, Kenya. He is an enthusiast of teaching and making accounting & research tutorials for his readers.