Fundamentals Of Financial Accounting Assignment

ACCOUNTING
FUNDAMENTALS

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
(a) Ledgers accounts...............................................................................................................1
(b) List of accounts balances at April,30................................................................................2
(c) Statement of Profit & loss for the month ended April,30.................................................2
TASK 2............................................................................................................................................3
(a) Ledger Accounts...............................................................................................................3
(b) Trial Balance at 31 January..............................................................................................4
(c) Statement of Profit and Loss for the month ended 31 January.........................................4
TASK 3............................................................................................................................................5
(a) Ledgers accounts...............................................................................................................5
(b) Trial Balance at 31 January..............................................................................................7
(c) Statement of Profit and Loss for the month ended 31 January.........................................7
TASK 4............................................................................................................................................8
TASK 5..........................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Accounting is the language apply by all companies to communicate with management,
investors and of the organisation (Bushman and Williams, 2012). Accounting is depending on
the fundamentals equation that are helping to solve complex activities and also defines business's
success and failure. In this report covers various journal entries and accounts has been developed
along with Profit & loss account, Balance sheet and trial balance account.
TASK 1
(a) Ledgers accounts
Cash a/c
Date Particular Amount (£) Date Particular Amount (£)
April,5 To Capital a/c 300.00 April,7 By Purchase a/c 200.00
April,8 To Loan a/c 250.00 April,15 By Motor van a/c 150.00
April,20 To Sales a/c 350.00 April,28 By rent a/c 50.00
April,29 By Loan a/c 200.00
April,30 By Drawings a/c 60.00
By Balance c/d 240.00
Total 900.00 Total 900.00
May,1 To Balance b/d 240.00
Capital a/c
Date Particular Amount (£) Date Particular Amount (£)
April, 30 To balance c/d 300.00 April,5 By Cash a/c 300.00
May, 1 By Balance c/d 300.00
Purchase a/c
Date Particular Amount (£) Date Particular Amount (£)
April,7 To Cash a/c 200.00 April,30 By Trading a/c 200.00
Loan a/c
Date Particular Amount (£) Date Particular Amount (£)
April,29 To Cash a/c 200.00 April,8 By Cash a/c 250.00
April,30 To balance c/d 50.00
1

250.00 250.00
May, 1 By Balance c/d 50.00
Motor Van a/c
Date Particular Amount (£) Date Particular Amount (£)
April,15 To Cash a/c 150.00 April,30 By Balance c/d 150.00
May,1 To Balance b/d 150.00
Rent a/c
Date Particular Amount (£) Date Particular Amount (£)
April,28 To cash a/c 50.00 April,30
By profit & loss
a/c 50.00
Sales a/c
Date Particular Amount (£) Date Particular Amount (£)
April,30 By Trading a/c 350.00 April,20 To cash a/c 350.00
Drawings a/c
Date Particular Amount (£) Date Particular Amount (£)
April, 30 To Cash a/c 60.00
(b) List of accounts balances at April,30
Particulars Debit (£) Credit (£)
Cash A/c 240.00
Capital a/c 300.00
Purchase a/c 200.00
Loan a/c 50.00
Motor van a/c 150.00
Rent a/c 50.00
Sales a/c 350.00
Drawings a/c 60.00
Total 700.00 700.00
(c) Statement of Profit & loss for the month ended April,30
Particulars Amount (£)
Sales a/c 350.00
2

Less – Cost of goods sold 100.00
Gross Profit 250.00
Less – Expenses
Rent a/c 50.00
Net Profit 200.00
Statement of Financial position as at April, 30
Amount (£) Amount (£)
Non Current assets
Motor van 150.00
Current Assets
Cash 240.00
Closing Stock 100.00 340.00
Total Assets 490.00
Capital a/c 300.00
Add – Net Profit 200.00
Less – Drawings 60.00 440.00
Current Liabilities
Short term loan 50.00
Total Liabilities 490.00
Working Note -
Cost of Goods Sold = Purchase – Closing stock
100.00 = 200.00 – 100.00
TASK 2
(a) Ledger Accounts
Cash a/c
Date Particular Amount (£) Date Particular Amount (£)
3

Jan,1 To capital a/c 5000.00 Jan,2 By Motor Van a/c 600.00
Jan,4 To loan from Sergei 1000.00 Jan,3 By Purchase a/c 1300.00
Jan,13 To Sales a/c 300.00 Jan,10 By Motor Expenses a/c 200.00
Jan,20 To Sales a/c 500.00 Jan,24
By Storage expenses
a/c 150.00
Jan,27 By Loan a/c 350.00
Jan,30 By Drawings a/c 175.00
Jan,31 By Balance c/d 4025.00
6800.00 6800.00
To Balance c/d 4025.00
Capital a/c
Date Particular Amount (£) Date Particular Amount (£)
January,31 To Balance c/d 5000.00 January,31 By cash a/c 5000.00
February,1 By Balance b/d 5000.00
Motor Van a/c
Date Particular Amount (£) Date Particular Amount (£)
Jan,2 To cash a/c 600.00 Jan,31 By Balance c/d 600.00
Feb, 1 To Balance b/d 600.00
Purchase a/c
Date Particular Amount (£) Date Particular Amount (£)
Jan, 3 To cash a/c 1300.00 Jan, 31 By Balance c/d 1300.00
May, 1 To Balance b/d 1300.00
Loan from Sergei a/c
Date Particular Amount (£) Date Particular Amount (£)
Jan, 27 To cash a/c 350.00 Jan, 4 By cash a/c 1000.00
Jan, 31 To Balance c/d 650.00
1000.00 1000.00
4

Feb, 1 By Balance b/d 650.00
Motor Van expenses a/c
Date Particular Amount (£) Date Particular Amount (£)
Jan, 10 To cash a/c 200.00 Jan, 31 By Balance c/d 200.00
Feb, 1 To Balance b/d 200.00
Sales a/c
Date Particular Amount (£) Date Particular Amount (£)
Jan, 31 To Balance c/d 800.00 Jan, 13 By cash a/c 300.00
Jan, 20 By cash a/c 500.00
800.00 800.00
Feb, 1 By Balance b/d 800.00
Storage Expenses a/c
Date Particular Amount (£) Date Particular Amount (£)
Jan, 24 To cash a/c 150.00 Jan, 31 By Balance c/d 150.00
Feb, 1 To Balance b/d 150.00
Drawings a/c
Date Particular Amount (£) Date Particular Amount (£)
Jan, 30 To cash a/c 175.00 Jan, 31 By Balance c/d 175.00
Feb, 1 To Balance b/d 175.00
(b) Trial Balance at 31 January
Particulars Debit (£) Credit (£)
Cash a/c 4025.00
Capital a/c 5000.00
Motor van a/c 600.00
Purchase a/c 1300.00
Loan a/c 650.00
5

Motor van expenses a/c 200.00
Sales a/c 800.00
Storage expenses a/c 150.00
Drawings a/c 175.00
6450.00 6450.00
(c) Statement of Profit and Loss for the month ended 31 January
Particulars Amount (£) Amount (£)
Sales a/c 800.00
Less – Cost of Goods sold 500.00
Gross Profit 300.00
Less- Expenses
Motor van expenses 200.00
Storage expenses 150.00 350.00
Net Loss 50.00
Statement of financial position at January, 31
Particulars Amount (£) Amount (£)
Non Current assets
Motor Van 600.00
Current assets
Cash 4025.00
Closing Stock 800.00 4825.00
Total assets 5425.00
Capital account 5000.00
Less- Net loss 50.00
Less – Drawings 175.00 4775.00
Current liabilities
Short term loan 650.00
Total Liabilities 5425.00
6

Working Notes – Cost Of goods sold = Purchase – Closing inventories
= 1300.00 – 800.00 = 500.00
TASK 3
(a) Ledgers accounts
Cash a/c
Date Particular Amount (£) Date Particular Amount (£)
Jan, 1 To Balance b/d 343.00 Jan, 5 By Wages a/c 12.00
Jan, 7 To Smith's a/c 18.00 Jan, 9 By Max's a/c 21.00
Jan, 11 To Sales a/c 64.00 Jan, 14 By Wages a/c 14.00
Jan, 21 To Sales a/c 110.00 Jan, 14 By Purchases a/c 75.00
Jan, 23 To Harvey's a/c 25.00 Jan, 15 By Rich's a/c 162.00
Jan, 28 To Sales a/c 84.00 Jan, 20
By Fixtures and
fittings a/c 32.00
Jan, 31 To Sales a/c 31.00 Jan, 21 By Wages a/c 17.00
Jan, 23 By office expenses a/c 3.00
Jan, 28 By Wages a/c 15.00
Jan, 31 By Balance c/d 323.00
674.00 674.00
Feb, 1 To Balance b/d 323.00
Capital a/c
Date Particular Amount (£) Date Particular Amount (£)
Jan, 1 To Payables 33.00 Jan, 1 By Cash in hand a/c 343.00
Jan, 31 To balance c/d 1049.00 By Inventory 458.00
By Furniture and
fittings 198.00
By Receivables 83.00
1082.00 1082.00
Fixtures and fittings a/c
Date Particular Amount (£) Date Particular Amount (£)
7

Jan, 1 To Balance b/d 198.00 Jan, 31 By Balance c/d 230.00
Jan, 20 To cash a/c 32.00
230.00 230.00
Feb, 1 To Balance b/d 230.00
Sales a/c
Date Particular Amount (£) Date Particular Amount (£)
Jan, 31 To Trading a/c 412.00 Jan, 2 By Harvey's a/c 124.00
Jan, 11 By Cash a/c 64.00
Jan, 21 By Cash a/c 110.00
Jan, 28 By Cash a/c 84.00
Jan, 31 By Cash a/c 30.00
412.00 412.00
Wages a/c
Date Particular Amount (£) Date Particular Amount (£)
Jan, 5 To cash a/c 12.00 Jan, 31 Profit and loss a/c 58.00
Jan, 14 To cash a/c 14.00
Jan, 21 To cash a/c 17.00
Jan, 28 To cash a/c 15.00
58.00 58.00
Purchase a/c
Date Particular Amount (£) Date Particular Amount (£)
Jan, 5 To Rich's a/c 150.00 Jan, 31 By Trading a/c 225.00
Jan, 14 To cash a/c 75.00
225.00 225.00
Office Expenses a/c
Date Particular Amount (£) Date Particular Amount (£)
Jan, 23 To cash a/c 3.00 Jan, 31 Profit and loss a/c 3.00
Receivables from Smith's a/c
Date Particular Amount (£) Date Particular Amount (£)
Jan,1 To Balance b/d 18.00 Jan, 7 By Cash a/c 18.00
Receivables from Harvey's a/c
8

Date Particular Amount (£) Date Particular Amount (£)
Jan, 1 To Balance b/d 39.00 Jan, 23 By Cash a/c 25.00
Jan, 2 To Sales a/c 124.00 Jan, 31 By Balance c/d 138.00
163.00 163.00
Feb, 1 To Balance b/d 138.00
Receivables from Moon's a/c
Date Particular Amount (£) Date Particular Amount (£)
Jan, 1 To Balance b/d 26.00 Jan, 31 By Balance c/d 26.00
Feb, 1 To Balance b/d 26.00
Payable to Rich's a/c
Date Particular Amount (£) Date Particular Amount (£)
Jan, 15 To cash a/c 162.00 Jan, 1 By Balance b/d 12.00
Jan, 5 By purchase a/c 150.00
162.00 162.00
Payable to Max's a/c
Date Particular Amount (£) Date Particular Amount (£)
Jan, 9 To cash a/c 21.00 Jan, 1 By Balance b/d 21.00
Inventory a/c
Date Particular Amount (£) Date Particular Amount (£)
Jan, 1 To Balance b/d 458.00 Jan, 31 By Trading a/c 458
Jan, 31 To Trading a/c 374.00 Jan, 31 By Balance c/d 374.00
Feb, 1 To Balance b/d 374.00
(b) Trial Balance at 31 January
Particulars Debit (£) Credit (£)
Cash in hand a/c 323.00
Capital a/c 1049.00
Fixtures and fittings a/c 230.00
Sales a/c 412.00
9

Wages a/c 58.00
Purchase a/c 225.00
Office expenses a/c 3.00
Receivables a/c
Harvey 138.00
Moon 26.00
Inventory a/c 458.00
1461.00 1461.00
(c) Statement of Profit and Loss for the month ended 31 January
Particulars Amount (£)
Sales 412.00
Less- Cost of goods sold 309.00
Gross profit 103.00
Less – Expenses
Wages 58.00
Office Expenses 3.00 61.00
Net Profit 42.00
Statement of Financial position at 31 January
Particulars Amount (£)
Non current assets
Fixtures and fittings 230.00
Current assets
Inventory 374.00
Trade receivables (138+26) 164.00
Cash 323.00 861.00
Total Assets 1091.00
Capital account 1049.00
Add – Net Profit 42.00 1091.00
Total Liabilities 1091.00
10

Working Note: Cost of goods sold = Opening inventories + Purchase – Closing stock
= 458.00 + 225.00 – 374.00309.00
TASK 4
(a) Ledgers account
Sales a/c
Date Particular Amount (£) Date Particular
Amount
(£)
Jun, 27 To Trading a/c 28500.00 Jun, 2 By Claire – Receivable a/c 8500.00
Jun, 14
By Hywel – Receivable
a/c 9000.00
Jun, 20 By Cash a/c 6000.00
Jun, 24
By Mandy – Receivable
a/c 5000.00
28500.00 28500.00
Sales Returns a/c
Date Particular
Amount
(£) Date Particular
Amount
(£)
Jun, 22
To Claire –
Receivables 1000.00 Jun, 27 By Trading a/c 1000.00
Purchase a/c
Date Particular
Amount
(£) Date Particular
Amount
(£)
Jun, 13
To Georgina –
Payable a/c 12000.00 Jun, 27 By Trading a/c 16500.00
Jun, 21
To Andrew – Payable
a/c 4500.00
16500.00 16500.00
Cash a/c
Date Particular Amount Date Particular Amount
11

(£) (£)
Jun, 20 To Sales a/c 6000.00 Jun, 25
By Georgina – Payable
a/c 11160.00
Jun, 24
To Claire –
Receivable 7125.00 Jun, 27
By Andrew – Payable
a/c 4410.00
Jun, 25
To Hywel –
Receivables 9000.00 Jun, 27 By Balance c/d 6555.00
22125.00 22125.00
To Balance b/d 6555.00
Discount allowed a/c
Date Particular
Amount
(£) Date Particular
Amount
(£)
Jun,24
To Claire –
Receivable 375.00 Jun, 27 By Profit and loss a/c 375.00
Discount received a/c
Date Particular
Amount
(£) Date Particular
Amount
(£)
Jun, 27 To Profit & loss a/c 930.00 Jun, 25
By Georgina – Payable
a/c 840.00
Jun, 27
By Andrew – Payable
a/c 90.00
930 930.00
Claire – receivable a/c
Date Particular
Amount
(£) Date Particular
Amount
(£)
Jun, 2 To Sales a/c 8500.00 Jun, 22 By Sales return a/c 1000.00
Jun, 24 By Cash a/c 7125.00
Jun, 24 By Discount allowed a/c 375.00
8500.00 8500.00
12

Hywel – receivable a/c
Date Particular
Amount
(£) Date Particular
Amount
(£)
Jun, 14 To Sales a/c 9000.00 Jun, 25 By Cash a/c 9000.00
Mandy – receivables a/c
Date Particular
Amount
(£) Date Particular
Amount
(£)
Jun, 24 To Sales a/c 5000.00 Jun, 27 By Balance c/d 5000.00
To Balance b/d 5000.00
Georgina – payable a/c
Date Particular
Amount
(£) Date Particular
Amount
(£)
Jun, 25 To Cash a/c 11160.00 Jun, 13 By Purchase a/c 12000.00
Jun, 25
To Discount received
a/c 840.00
12000.00 12000.00
Andrew – payable a/c
Date Particular
Amount
(£) Date Particular
Amount
(£)
Jun, 27 To Cash a/c 4410.00 Jun, 21 By Purchase a/c 4500.00
Jun, 27
To Discount received
a/c 90.00
4500.00 4500.00
Trial balance at 27 June
Particulars Debit Credit
Sales a/c 28500.00
Purchase a/c 16500.00
Cash a/c 6555.00
Sales return a/c 1000.00
13