Pitt St Furniture Income Statements and Balance Sheet

The provided assignment is a case study on Pitt St Furniture, which includes an income statement for the year ending 31st May 2017 and a statement of financial position as on 31st May 2017. The income statement shows revenue of $90,000, with total expenses of $72,640, resulting in net income of $17,360. The balance sheet lists current assets of $64,535, non-current assets of $58,125, liabilities of $74,300, and capital of $48,360.

Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK ..............................................................................................................................................1
1. Journal accounts.................................................................................................................1
2. Posting in ledger accounts..................................................................................................5
3. Bank reconciliation statement..........................................................................................10
4. Trial balance.....................................................................................................................10
5. Income statements and balance sheet...............................................................................15
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
Accounting is the concept under which various process are performed so that all the
information which is relevant to business can be recorded in most appropriate manner (Brigham
and Ehrhardt, 2013). In this different accounts are prepared such as firstly journal is made in
which entries are made after that positing is done in ledgers. Then trial balance is made in which
all the adjustments are considered which will be further used to prepare income statement and
balance sheet (Healy and Palepu, 2012). All of this will be explained in below provided report.
TASK
1. Journal accounts
In this all the transactions that are taking place in business together with opening and
closing balances will be recorded and same is provided below.
General Journal of PITT ST FURNITURE
Date Particulars Debit Credit
01/05/17 Cash at bank A/c Dr.
Accounts receivable account Dr.
Vehicle A/c Dr.
Computer A/c Dr.
Drawings A/c Dr.
Purchases A/c Dr.
Insurance on Purchases A/c Dr.
Insurance on Vehicles A/c Dr.
Interest A/c Dr.
Vehicle registration A/c Dr.
Rates A/c Dr.
Rent A/c Dr.
Office supplies A/c Dr.
Motor vehicle expenses A/c Dr.
Wages A/c Dr.
To Accounts Payable
11850
25000
60000
5000
8000
37000
300
200
2400
600
1300
7500
450
750
4250
12000
1

To Loan from Easy Money Ltd.
To Capital
To Sales
57600
40000
55000
Petty cash book
Date Particulars Debit Credit
05/05/17 Duster expense A/c Dr.
To Petty cash
15
15
13/05/17 Signage Expense A/c Dr.
To Petty cash
50
50
Total 65 65
Cash receipt Journal
Debits Credits
Date Particulars Cash at bank Accounts receivable sales
03/05/17 Cash at bank A/c
To Sales
10000
10000
07/05/17 Cash at bank A/c
To Accounts
receivable
25000
25000
Total 35000 25000 10000
Cash payment Journals
Debit Credit
Date Particulars Accounts
payables
Pett
y
Drawin
gs
Rent Insurance
on
Insurance
on
Wages Cash at bank
2

cash purchases vehicles
01/05/
17
Petty cash
A/c
To Cash at
bank
100
100
Rent A/c
Dr.
To Cash at
bank
150
0
1500
Insurance
on
purchases
A/c
To Cash at
bank
100
100
13/05/
17
Wages A/c
To Cash at
bank
500
500
16/05/
17
Accounts
Payable
A/c
To Cash at
bank
12000
12000
26/05/
17
Petty cash
A/c
To Cash at
Bank
65
65
27/05/
17
Wages A/c
To Cash at
500
500
3

Bank
28/05/
17
Drawings
A/c
To Cash at
Bank
1000
1000
29/05/
17
Insurance
on vehicle
A/c
To Cash at
Bank
50
50
Total 12000 165 1000 150
0
100 50 1000 15815
Sales journal
Debit Credit
Date Particulars Accounts receivable sales
23/05/17 Accounts receivable A/c
To Sales
25000
25000
Total 25000 25000
Purchase journal
Debit Credit
Date Particulars Purchases Accounts payable
09/05/17 Purchases A/c
To Accounts payable
17250
17250
Total 17250 17250
Purchase return journal
4

Debits Credit
Date Particulars Accounts payable Purchase return
21/05/17 Accounts payable A/c
To Purchase return
1150
1150
Adjustment entries:
Particulars Debit Credit
1 Prepaid rent A/c Dr.
To Rent
1500
1500
2 Depreciation on vehicle A/c Dr.
To Vehicle
6250
6250
3 Depreciation on computers A/c Dr.
To Computers
625
625
4 Interest A/c Dr.
To Loan from Easy Money Ltd.
600
600
2. Posting in ledger accounts
All the entries which have been made above will have to be posted in various ledger
accounts (Weil, Schipper and Francis, 2013). This is required to be done as by this closing
balances of each account will be determined that are used in making of trial balance. So in order
to fulfil this criteria below are provided necessary ledger accounts.
Ledger accounts of PITT ST FURNITURE
Cash at bank A/c
Date Particulars Amount Date Particular Amount
01/05/17 To balance b/d 11850 01/05/17 By petty cash 100
01/05/17 By rent 1500
5

01/05/17 By insurance on
purchases
100
03/05/17 To sales 10000 13/05/17 By wages 500
07/05/17 To accounts receivable 25000 16/05/17 By accounts payable 12000
26/05/17 By petty cash 65
27/05/17 By wages 500
28/05/17 By drawings 1000
29/05/17 By insurance on
vehicle
50
31/05/17 By balance c/d 31035
46850 46850
Accounts receivable A/c
Date Particulars Amount Date Particular Amount
01/05/17 To balance b/d 25000 07/05/17 By cash at bank 25000
23/05/17 To sales 25000 31/05/17 By balance c/d 25000
50000 50000
Vehicle A/c
Date Particulars Amount Date Particular Amount
01/05/17 To balance b/d 60000
31/05/17 By balance c/d 60000
60000 60000
Computer A/c
Date Particulars Amount Date Particular Amount
6

01/05/17 To balance b/d 5000
31/05/17 By balance c/d 5000
5000 5000
Drawings A/c
Date Particulars Amount Date Particular Amount
01/05/17 To balance b/d 8000
28/05/17 To cash at bank 1000 31/05/17 By balance c/d 9000
9000 9000
Purchases A/c
Date Particulars Amount Date Particular Amount
01/05/17 To balance b/d 37000
09/05/17 To accounts payable 17250 31/05/17 By balance c/d 54250
54250 54250
Insurance on purchases A/c
Date Particulars Amount Date Particular Amount
01/05/17 To balance b/d 300
01/05/17 To cash at bank 100 31/05/17 By balance c/d 400
400 400
Insurance on Vehicle A/c
Date Particulars Amount Date Particular Amount
01/05/17 To balance b/d 200
29/05/17 To cash at bank 50 31/05/17 By balance c/d 250
7

250 250
Interest A/c
Date Particulars Amount Date Particular Amount
01/05/17 To balance b/d 2400
31/05/17 By balance c/d 2400
2400 2400
Vehicle Registration A/c
Date Particulars Amount Date Particular Amount
01/05/17 To balance b/d 600
31/05/17 By balance c/d 600
600 600
Rates A/c
Date Particulars Amount Date Particular Amount
01/05/17 To balance b/d 1300
31/05/17 By balance c/d 1300
1300 1300
Rent A/c
Date Particulars Amount Date Particular Amount
01/05/17 To balance b/d 7500
01/05/17 To cash at bank 1500 31/05/17 By balance c/d 9000
9000 9000
Office supplies A/c
8

Date Particulars Amount Date Particular Amount
01/05/17 To balance b/d 450
31/05/17 By balance c/d 450
450 450
Motor Vehicle expenses A/c
Date Particulars Amount Date Particular Amount
01/05/17 To balance b/d 750
31/05/17 By balance c/d 750
750 750
Wages A/c
Date Particulars Amount Date Particular Amount
01/05/17 To balance b/d 4250
13/05/17 To cash at bank 500
27/05/17 To cash at bank 500 31/05/17 By balance c/d 5250
5250 5250
Accounts Payable A/c
Date Particulars Amount Date Particular Amount
16/05/17 To cash at bank 12000 01/05/17 By balance b/d 12000
21/05/17 To purchase return 1150 09/05/17 By Purchases 17250
31/05/17 To balance c/d 16100
29250 29250
9

Loan from easy money Ltd. A/c
Date Particulars Amount Date Particular Amount
01/05/17 By balance b/d 57600
31/05/17 To balance c/d 57600
57600 57600
Capital A/c
Date Particulars Amount Date Particular Amount
01/05/17 By balance b/d 40000
31/05/17 To balance c/d 40000
40000 40000
Sales A/c
Date Particulars Amount Date Particular Amount
01/05/17 By balance b/d 55000
03/05/17 By Cash at bank 10000
31/05/17 To balance c/d 90000 23/05/17 By Accounts
receivable
25000
90000 90000
Petty cash A/c
Date Particulars Amount Date Particular Amount
01/05/17 To cash at bank 100 05/05/17 By duster expenses 15
26/05/17 To cash at bank 65 13/05/17 By signage expenses 50
31/05/17 By balance c/d 100
165 165
10

Duster expenses A/c
Date Particulars Amount Date Particular Amount
05/05/17 To balance b/d 15
31/05/17 By balance c/d 15
15 15
Signage expenses A/c
Date Particulars Amount Date Particular Amount
13/05/17 To balance b/d 50
31/05/17 By balance c/d 50
50 50
Purchase return A/c
Date Particulars Amount Date Particular Amount
21/05/17 By accounts payable 1150
31/05/17 By balance c/d 1150
1150 1150
3. Bank reconciliation statement.
Bank reconciliation statement as at 31st may 2017
Particulars Amount
Bank balance as per cash book $31035
Wages paid Cheque no 56 500
Drawings by cheque no 57 1000
Insurance by cheque no 58 50
11

Bank service fees -5
Bank balance as per pass book $32580
4. Trial balance
(A) Unadjusted trial balance
PITT ST FURNITURE
Trial balance as at 31st mar 2017
Particulars Debit Credit
Cash at bank 31035
Accounts receivable 25000
vehicle 60000
Computer 5000
Accounts payable 16100
Loan from easy money Ltd. 57600
Capital – Sid Swan 40000
Drawings – Sid swan 9000
Sales revenue 90000
Purchases 54250
Insurance on purchases 400
Insurance on vehicles 250
Interest 2400
Vehicle registration 600
Rates 1300
Rent 9000
Office supplies 450
12

Motor vehicle expenses 750
Wages 5250
Petty cash 100
Duster expenses 15
Signage expenses 50
Purchase return 1150
Total $204850 $204850
(B) Adjusted trial balance
Adjusted ledger accounts:
Prepaid rent A/c
Date Particulars Amount Date Particular Amount
31/05/17 To rent 1500
31/05/17 By balance c/d 1500
1500 1500
Rent A/c
Date Particulars Amount Date Particular Amount
31/05/17 To balance b/d 9000 31/05/17 By prepaid rent 1500
31/05/17 By balance c/d 7500
9000 9000
Depreciation on vehicle A/c
Date Particulars Amount Date Particular Amount
31/05/17 To vehicle 6250
31/05/17 By balance c/d 6250
6250 6250
13

Depreciation on computer A/c
Date Particulars Amount Date Particular Amount
31/05/17 To computer 625
31/05/17 By balance c/d 625
625 625
Vehicle A/c
Date Particulars Amount Date Particular Amount
31/05/17 To balance b/d 60000 31/05/17 By depreciation on
vehicle
6250
31/05/17 By balance c/d 53750
60000 60000
Computer A/c
Date Particulars Amount Date Particular Amount
31/05/17 To balance b/d 5000 31/05/17 By depreciation on
computer
625
31/05/17 By balance c/d 4375
5000 5000
Interest A/c
Date Particulars Amount Date Particular Amount
31/05/17 To balance b/d 2400
31/05/17 To Loan from easy
money
600
14

31/05/17 By balance c/d 3000
3000 3000
Loan from Easy money Ltd. A/c
Date Particulars Amount Date Particular Amount
31/05/17 By balance b/d 57600
31/05/17 By balance c/d 58200 31/05/17 By interest 600
58200 58200
PITT ST FURNITURE
Adjusted Trial balance as at 31st mar 2017
Particulars Debit Credit
Cash at bank 31035
Accounts receivable 25000
Computer 4375
vehicle 53750
Loan from easy money Ltd. 58200
Accounts payable 16100
Drawings – Sid swan 9000
Capital – Sid Swan 40000
Purchases 54250
Sales revenue 90000
Insurance on purchases 400
Prepaid rent 1500
Vehicle registration 600
15

Insurance on vehicles 250
Interest 3000
Rates 1300
Depreciation on vehicle 6250
Depreciation on computer 625
Office supplies 450
Rent 7500
Petty cash 100
Motor vehicle expenses 750
Wages 5250
Signage expenses 50
Duster expenses 15
Purchase return 1150
Total $205450 $205450
C) Post closing trial balance
Adjustment entries:
Date Particulars Debit Credit
31/05/17 Sales A/c Dr.
To Income statements
90000
90000
31/05/17 Income statements A/c Dr.
To Purchases (54250-1150)
To Insurance on purchases
To Vehicle registration
To Insurance on vehicles
To Interest
79540
53100
400
600
250
3000
16

To Rates
To Depreciation on vehicle
To Depreciation on computer
To Office supplies
To Rent
To Motor vehicle expenses
To Wages
To Signage expenses
To Duster expenses
1300
6250
625
450
7500
750
5250
50
15
Income statements A/c Dr.
To Capital
10460
10460
Capital A/c Dr.
To Drawings
9000
9000
PITT ST FURNITURE
Post closing Trial balance as at 31st may 2017
Particulars Debit Credit
Cash at bank 31035
Accounts receivable 25000
Computer 4375
vehicle 53750
Loan from easy money Ltd. 58200
Accounts payable 16100
Capital – Sid Swan 41460
Petty cash 100
Prepaid rent 1500
17

Total $115760 $115760
5. Income statements and balance sheet
They are made so that all the data which is given in trial balance can be entered in it and
by that actual position of business will be determined (Kieso, Weygandt and Warfield, 2010). All
the adjustments that are made have been included in trial balance and will not be required to be
considered again.
Statements of income for PITT ST FURNITURE
For the year ending 31st May 2017
Particulars Amount
Revenue (A) 90000
Expenses:
Cost of goods sold (54250-1150-6900) 46200
Duster expenses 15
Signage expenses 50
Wages 5250
Motor vehicle expenses 750
Rent 7500
Office supplies 450
Depreciation on vehicle 6250
Depreciation on computer 625
Interest 3000
Rates 1300
Vehicle registration 600
Insurance on purchases 400
Insurance on vehicles 250
18