Account Assignment Solved (Doc)

Account

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Account is a record daily routine transactions in the general ledger of any company. The
term of account applied by company where suppliers sell goods to customers and grant credit
terms as per the policy (Obasogie & Newman, 2016). The presented report based on the Ben
cake company which is produced their final accounts at the financial year end June 30, 2019 and
record every transaction. There are adjusting journal entries, prepare income statement, balance
sheet and produce work sheet for adjust amount into trial balance.
MAIN BODY
(A) Worksheet
Ben's Cake Worksheet For the month ended June 30, 2019
Account titles Trial Balance Adjustments
Adjusted trial
balance
Dr. Cr. Dr. Cr. Dr. Cr.
Cash at bank 24362 24632
Sales Revenue 961400 961400
Account Receivable 102528 102528
Sales return and allowances 13332 13332
Inventory 145600 145600
Cost of Sales 549744 549744
Prepaid Insurance 7872 1312 6560
Discount Received 11232 11232
Office Supplies on hand 4368 2324 6692
Freight inward 12480 12480
Furniture and fixtures 53040 4820 48220
Sales salaries expenses 91104 3200 87904
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Accumulated depreciation
furniture and fixtures 14560 14560
Delivery expenses 24400 24400
Delivery equipment 62400 13230 49170
Advertising expenses 35880 35880
Rent expenses 38200 38200
Equipment 24960 24960
Office salaries expenses 45000 880 44120
Accounts Payable 36036 36036
Electricity expenses 13400 13400
Loan Payable (Long term) 156000 156000
Discount Allowed 9100 9100
Ben Jamin, Capita 66142 66142
Ben Jamin, Drawings 37620 37620
Suspense account 54180 33332
Total 1297470 1297470 1276622 1276622
(B) Income Statement
Income statement of Ben Cake For the year ended, June 30,
2019
Particular Amount ($) Amount ($)
Revenues
Sales revenues 961400
Discount Received 11232 972632
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Expenses
Cost of sales 549744
Sales salaries expenses 87904
Depreciation expenses 18050
Rent Expenses 38200
Electricity Expenses 13400
Discount Allowed 9100
Delivery expenses 24400
Advertising expenses 35880 776678
Net Income 195954
(c) Balance Sheet
Balance sheet of Ben Cake For the year ended, June 30, 2019
ASSETS ($)
Non current asset
Prepaid Insurance 6560
Furniture & fixtures (53040 – 14560) 38480
Office supplies on hand 6692
Delivery Equipment (62400 – 24960) 37440
Current Assets
Cash at bank 24362
Accounts Receivable 102528
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Inventory 145600
Other assets 58930
Total Assets 420592
Equity & Liabilities
Owner's equity
Capital 66142
Add – Net income 199444
Less – Drawings 37620
Non current liabilities
Long term loan 156000
Outstanding salaries (3200 + 880) 4080
Current liabilities
Accounts Payable 36036
Total Liabilities 420592
(D) Adjusting Entries
Particulars L.F. Debit Credit
Insurance expenses a/c 1312
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To prepaid expenses a/c 1312
(Being adjust amount of expired
insurance)
Office Supplies a/c 2324
To cash a/c 2324
(Being increase office supplies on
hand)
Depreciation a/c 4820
To furniture and Fixture 4820
(Being depreciation less from F&F)
Depreciation a/c 13230
To Delivery Equipment a/c 13230
(Being depreciation less from
Delivery equipment)
Sales salaries a/c 3200
To outstanding sales salaries a/c 3200
(being salary payable but not
recorded)
Office salaries a/c 880
To outstanding office salaries a/c 880
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(being salary payable but not
recorded)
(E) Closing Entries
Particular Amount ($) Amount ($)
Revenues a/c 972632
To income summary a/c 972632
( To close the revenue account with
income summary)
Income Summary a/c 776678
To cost of goods sold 549744
To Depreciation expenses a/c 18050
To Rent expenses a/c 38200
To Sales salaries a/c 87904
To electricity expenses a/c 13400
To advertisement expenses a/c 35880
To Delivery expenses a/c 24400
To discount allowed a/c 9100
(To close the expenses accounts to income
summary)
Capital a/c 37620
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To drawings a/c 37620
(To close the capital accounts to drawings
account)
(F) Reverse Entries
Particulars L.F. Debit Credit
Prepaid insurance a/c 1312
To Insurance expenses a/c 1312
(To reverse insurance adjustment)
Cash a/c 2324
To Office supplies a/c 2324
(To increase office supplies adjusted)
Outstanding Sales salaries a/c 3200
To sales salaries a/c 3200
(To salary payable but not recorded)
Outstanding Office salaries a/c 880
To office salaries a/c 880
(To salary payable but not recorded)
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(G) After all the analysis it is analysed that the financial situation of Ben cake shop is good and
they are planning for further investment to expand their business activities.
Recommendation
It is essential for companies to maintain books of account as it is mandatory for all types of
country under Companies Act 2013. Books of accounts acts as a basic of financial statements of
an organisation that mainly include documents such as account, voucher, minutes, writings and
other essential documents. Thus, it has been recommended to Ben cake shop to maintain the
books of accounts in proper form as it depicts true and fair view of state of affairs of
organisation. In addition with this it is recommended to Ben cake shop to maintain their books of
accounts on accrual basis as well as according to the double entry system of accounts. Further
organisation is being advised to maintain their documents in document as well as electronic
document form for this they can undertake the software’s like Quickbook and Telly. With the
help of theirs they can effectively able to preserve company accounts. In addition with this it is
the responsibility of chief financial officer, the Managing Director, incharge of Finance and the
whole time director of company or any other individual who is nominated by board of directors
are responsible to make sure that book of accounts of company are properly maintained. As
negligence of this may lead towards, imprisonment and penalty as per according to the
Companies Act. Thus, as per according to the discussion it has been recommended to company
to maintain their books of accounts in proper and appropriate manner as with the help of this
they can effectively able to reduce the tax liability. Along with proper maintenance of books of
accounts helps company to forecast their business growth in well effective manner. As with the
help of this they can connect the dot of their past performance to their future goals. Further they
can able to have clear picture and formulate their financial strategies that further help them to
accomplish their plans in proper budgets. With the help of proper maintenance of books of
accounts company can able to operate their other functions such as operations marketing and HR
in best effective way. In addition with this with the help of proper maintenance of accounts
organisation can effectively able to stay organised while dealing with customers as well as
suppliers. Thus, it is recommended for them to update books of accounts on timely basis as with
the help of this they can have easy access to critical data on their fingertips. Further it has been
determined that with the help of proper maintenance of accounting documents that can have easy
to get funds and can further avoid interest as well as penalties. Thus, according to the above-
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mentioned discussion it has been determined and recommended to the organisation that with the
help of proper maintenance of books of accounts company can not only able to conduct their
operations in an easy and sophisticated manner but get also able to lead towards more growth.
Further it helps them to expand their business in well effective way without any issues and
problems.
CONCLUSION
As per the above report it is analysed that accounts important for every organisation that
help to record every transaction in accounting book with the help of accounting standards. There
are understanding actual position of the shop in the market and understand that the financial
position is good.
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