UNIT 10

Financial Accounting

REPORT

PREPARED BY: Anish Mohan Nair

LEVEL 4
YEAR: 2018-19
ASSESSOR NAME: Utsav Gandhi
Index
P1: Apply the double entry book-keeping system of debits and credits. Record sales and
purchases transactions in a general ledger from

Case 1

The following are the transactions of Kristine’s business during her first month of trading:

 Kristine starts a business and pays in £5,000 as capital

 The business buys a car for £1,000 cash
 They buy goods for resale for £500 cash
 They buy more goods for resale for £600 on credit from Mr A
 They pay rent of £200 cash
 They sell half the goods for £800 cash
 They sell the remaining goods on credit for £900 to Mrs X
 They pay £400 cash on account of the amount owing to Mr A
 They receive £500 from Mrs X
 Kristine withdraws £100 cash from the business

Journal Entry
Date Particulars LF Amount Amount
1 Cash A/c Dr 5000
To Kristine’s Capital 5000
2 Car A/c Dr 1000
To Cash A/c 1000
3 Purchase A/c Dr 500
To Cash A/c 500
4 Purchase A/c Dr 600
To Mr. A 600
5 Rent A/c Dr 200
To Cash A/c 200
6 Cash A/c 800
To Sales A/c 800
7 Mrs. X A/c Dr 900
To Sales A/c 900
8 Mr. A A/c Dr 400
To Cash A/c 400
9 Cash A/c Dr 500
To Mrs. X A/c 500
10 Drawings Dr. 100
To Cash A/c 100
10000 10000
Ledger Account

Cash A/c
Debit Credit
Date Particulars LF Amount Date Particulars LF Amount
1 To Kristine A/c 5000 2 By Car A/c 1000
5 To Sales A/c 800 3 By Purchase A/c 500
7 To Mr. X A/c 500 4 By Rent A/c 200
6 By Mr. A A/c 400
8 By Drawings A/c 100

By Balance c/d 4100

6300 6300

Kristine A/c
Debit Credit
Date Particulars LF Amount Date Particulars LF Amount
1 By Cash A/c 5000

To Balance c/d 5000

5000 5000

Car A/c
Debit Credit
Date Particulars LF Amount Date Particulars LF Amount
1 To Cash A/c 1000

By Balance c/d 1000

1000 1000
 Purchase A/c
Debit Credit
Date Particulars LF Amount Date Particulars LF Amount
1 To Cash A/c 500
2 To Mr. A A/c 600

By Balance c/d 1100

1100 1100

Rent A/c
Debit Credit
Date Particulars LF Amount Date Particulars LF Amount
1 To Cash A/c 200

By Balance c/d 200

200 200

Mr. A A/c
Debit Credit
Date Particulars LF Amount Date Particulars LF Amount
2 To Cash A/c 400 1 By Purchase A/c 600

To Balace c/d 200

600 600
 Sales A/c
Debit Credit
Date Particulars LF Amount Date Particulars LF Amount
1 By Cash A/c 800
2 By Mr. X A/c 900

By Balance c/d 1700

1700 1700

Mr. X A/c
Debit Credit
Date Particulars LF Amount Date Particulars LF Amount
1 To Sales A/c 900
2 By Cash A/c 500

By Balance c/d 400

900 900

Drawings A/c
Debit Credit
Date Particulars LF Amount Date Particulars LF Amount
1 To Cash A/c 100

By Balance c/d 100

100 100
P2: Produce a trial balance applying the use of the balance off rule to complete the ledger

Sr. Particulars L.F Debit Credit

No
1 Cash A/c 4100
2 Kristine A/c 5000
3 Car A/c 1000
4 Purchase A/c 1100
5 Mr. A A/c 200
6 Sale A/c 1700
7 Mrs. X A/c 400
8 Drawings A/c 100
9 Rent A/c 200

6900 6900
P3: Prepare Final Accounts from given trial balance

Ward’s Consulting

Trial Balance

December 31, 2018

Account Title Debit (Rs) Credit (Rs)

Cash 7000
Account Receivable 3000
Office Supplies 3000
Office Equipments 5000
Bank Loan 5000
Account Payable 1000
Common Stock 10000
Consulting Revenue 7000
Rent Expenses 600
Salaries Expense 2500
Salaries Used 1200
Utilities Expense 700

Total 23000 23000

Ward’s Consulting

Income Statement

For the month ended December 31, 2018

Revenue (Rs) (Rs)

Consulting Revenue 7000

Expenses
Rent Expense 600
Salaries Expense 2500
Supplies Used 1200
Utilities Expense 700
Total Expense 5000
Net Income 2000
 Ward’s Consulting

Balance Sheet

As at December 31, 2018

Assets (Rs) (Rs)

Cash 7000
Accounts Receivable 3000
Office Supplies 3000
Office Equipment 5000
Total Assets 18000

Liabilities
Banks Loan 5000
Account Payable 1000
6000
Equity
Common Stock 10000
Net Income 2000 12000
Total Liabilities and Equity 18000
P4: Produce final accounts for a range of examples that include Sole Traders, Partnerships or
Limited Companies.

Trial Balance of Olivia Boulton, as on 31 December 2017

Debit (Rs) Credit (Rs)

Stock at 1 January 2017 50000
Purchases 420000
Sales 557500
Shop Expense 6200
Wages 33500
Rent Paid 750
Telephone Expense 500
Interest Paid 4500
Travel Expense 550
Premises 200000
Ship Fittings 40000
Debtors 10100
Bank 5850
Cash 50
Capital 75000
Drawings 27000
Loan from Bank 150000
Creditors 14500
Value Added Tax 2000
799000 799000
 Financial Statement of Sole Traders

Trading and Profit and Loss Account

Of
Olivia Boulton for the 31 December 2017

(Rs) (Rs)
Sales 557500
Opening Stock (1 January 50000
2017)
Purchases 420000
470000
Less Closing Stock (31 42000
December 2017)
Cost Of Sales 428000
Gross Profit 129500

Less Overheads
Shop Expense 6200
Wages 33500
Rent Paid 750
Telephone Expense 500
Interest Paid 4500
Travel Expense 550
46000
Net Profit 83500
 Balance Sheet of Olivia Boulton

As on 31 December 2017

(Rs) (Rs) (Rs)

Fixed Assets
Premises 200000
Shop Fittings 40000
240000
Current Assets
Stock 42000
Debtors 10100
Bank 5850
Cash 50
58000
Less Current
Liabilities
Creditors 14500
Value Added Tax 2000
16500
Working Capital 41500
281500
Less Long Term
Liabilities
Loan from Bank 350000
Net Assets 131500

Financed By
Capital
Opening Capital 75000
Add Net Profit 83500
158500
Less Drawings 27000
Closing Capital 131500
 Trail Balance as on 31 December 2017

Particulars Debit (Rs) Credits (Rs)

Sales 250000
Purchases 156000
Sales Returns 5400
Purchase Returns 7200
Discount Received 2500
Discount Allowed 3700
Stock on 1st Jan, 2011 12350
Salaries 46000
Electricity & Gas 3000
Rent and Taxes 2000
Sundry Expense 4700
Premises 100000
Equipment 30000
Vehicles 21500
Debtors 23850
Bank Overdraft 851
Cash 125
Creditors 12041
VAT 3475
Akshit 50000
Ram 60000
Drawings 10442
Long Term 33000
Total 419067 419067
 FINANCIAL STATEMENT OF PARTNERSHIPS
TRADING AND PROFIT AND LOSS ACCOUNT
For the Year and 31 December 2017

Particular Amt Amt Amt

Sales 250000
Sales Returns 5400 244600
(-)Cost of Goods
Sold
Opening Stock 12350
(+)Purchases 156000
(-)Returns 7200 148800
(-)Closing Stock 16300 144850
Gross Profit 99750

(-)Expenses
Salaries 46000
Electricity & Gas 3000
Rent & Taxes 2000
Sundry Expenses 4700
Discount Allowed 3700 59400

(+)Income

Discount Received 2500

Net Profit 42850

 BALANCE SHEET AS ON 31 DECEMBER 2017
Particulars Amt Amt Amt
Fixed Assets
Premises 100000
Equipment 30000
Vehicles 21500 151500

Current Assets (A)

Debtors 23850
Cash 125
Closing Stock 6300 40275

Current Liabilities (B)

Bank Overdraft 851
Creditors 12041
VAT 3475 16367

Working Capital (A-B) 23908

(-) Long Term Liabilities

Loan 53000

NET ASSETS 142408

Financed By:
Akshit 50000
(+)Net Profit 21425 1425
Ram 60000
(+)Net Profit 21425
(-)Drawings 10442 70983
CAPITAL EMPLOYED 142408
M2: Make adjustments of sum accounts for example, accruals, depreciation and
prepayments before preparing the final accounts

Particulars Dr Cr
Premises at cost 120000
Depreciation (premises) 7200
Long Term Loan 52800
Capital 70000
Debtors 1900
Creditors 1600
Drawings 6750
Cash