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Altos limited

Mr. Boston incorporated Altos ltd on April 1, 2013. He started a business of
manufacturing Automobile with $ 50,000 in cash and $ 20,000 in bank. He did the
operations of business during the month of April 2013
1 Mr. Boston took money from his brother Mr. KMP amounted to $ 20,000 and
invested the same in the business.
2 Loan obtained from Union Bank amounted to $ 40,000 at 10% annual interest.
The interest is recorded at the end of the year.
3 For manufacturing, he bought a land for $ 10,000 and constructed a building
amounted to $ 20,000. He also bought machinery for $ 20,000 from Blackwell &
co on cash.
4 He bought Raw Material at 10% trade discount from M/s Mascon amounted to $
30,000 on credit.
5 For operations of business, he took shop on rental basis at $ 1, 000 per month and
appointed two employees on a salary of $ 4,000 each per month. They are
involved in sales operations. Payments are made on the monthly basis.
6 A cash sale of $ 9,000 was made during the month and there are credit sales of $
3,000 to Mr. Rex and $ 20000 to Mr. Thomas.
7 Goods purchased for $ 15, 000 from Danny at 10% trade discount and 5% cash
discount. 40 % amount was paid on spot.
8 Goods sold to Ultra Ltd amounted to $ 10,000 at 10% trade discount. The full
payment was made on spot.
9 Some goods worth $ 1,000 found defective and returned by Mr. Rex as per the
terms and conditions of sale.
10 Due to security reasons, Mr. Boston took a fire Insurance policy for goods and
office premises; Amount of $ 100 has been paid to United Insurance co.
11 Jack and co. purchased goods for $ 10,000 at 10% trade discount.
12 Goods purchased from Leonardo Dcosta & Bros on credit for $ 15,000 at trade
discount amounted to $ 1000.
13 For office use, furniture costing $ 10000 was purchased for cash.
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14 Electricity charges for the month amounted to $ 500 were paid by cheque.
15 Sales of $ 10,000 were made during the month to Mr. Schoenfeldt on credit. He
became insolvent and only 90% amount was recovered from him.
16 Following expenses were paid:
Stationary $ 300
Refreshment Expenses $ 125
Other Expenses $ 75
17 In a campaign for promotional activities, some goods amounted to $ 1000 were
distributed as sample.
18 In the month, they received $ 3000 from consultancy work done for Jonsons &
co
19 Following expenses were paid in pass book:
Bank charges $ 1000
20 Following income were received in pass book:
Commission $ 2000
Interest $ 400
Home Assignments:
1. Journalize the above transactions.
2. Post them into ledger.
3. Prepare a trial balance for the period ending on April 30, 2013.

4. Prepare Profit & Loss a/c for the month of April 2013.

5. Prepare Balance Sheet as on 30
th
April 2013.








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Journal Entries
Date Particulars L F Amount $ (Dr.) Amount $ (Cr.)



Ledger Accounts
Date Particulars J F Amount $ (Dr.) Date Particulars JF Amount $ (Cr.)



Trial Balance for the period ending on April 30, 2013
Particulars LF Amount $ (Dr.) Amount $ (Cr.)




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Profit & Loss a/c for the month of April 2013
Expenses Amount $
Dr.
Incomes Amount $
Cr.











Balance Sheet as on 30
th
April 2013
Liabilities Amount $ Assets Amount $