Accounting Assignment: Financial Statements and Accrual vs Cash

This accounting assignment presents a comprehensive solution to a financial accounting problem. It begins with the creation of a general journal, meticulously recording all transactions for the month of June 2018, followed by the development of a general ledger, which organizes these transactions by account. An unadjusted trial balance is then prepared, summarizing the debit and credit balances. A 10-column worksheet is constructed, incorporating adjustments for the period. Subsequently, an income statement and a balance sheet are generated, providing a snapshot of the company's financial performance and position. Finally, the assignment includes a detailed analysis comparing and contrasting the accrual basis and cash basis of accounting, highlighting their differences and implications for financial reporting, along with the workings to support the calculations.

Running head: ACCOUNTING
Accounting
Name of the Student:
Name of the University:
Author’s Note:

1ACCOUNTING
Table of Contents
General Journal:...............................................................................................................................2
General Ledger:...............................................................................................................................4
Unadjusted Trial Balance:...............................................................................................................8
10-Column Worksheet:..................................................................................................................10
Income Statement:.........................................................................................................................11
Balance Sheet:...............................................................................................................................11
Difference between Accrual Profit & Cash Profit:........................................................................12
Workings:......................................................................................................................................14
Reference.......................................................................................................................................16

2ACCOUNTING
General Journal:
In the books of Muscle Up
Journal Entries
Dr. Cr.
Date Particulars Amount Amount
01-06-2018 Cash at Bank $10,120
Accounts Receivable $19,111
Motor Vehicle $32,752
Gym equipment $21,829
Stationery Supplies $409
Accounts Payable $7,445
Bank Loan $25,131
Capital $51,645
01-06-2018 Prepaid Insurance $2,375
Cash at Bank $2,375
01-06-2018 Sundry Expenses $278
Cash at Bank $278
01-06-2018 Accounts Receivable $1,012
Gym Fees $1,012
03-06-2018 Prepaid Rent $3,177
Cash at Bank $3,177
03-06-2018 Accounts Receivable $1,046
Squash Fees $1,046
04-06-2018 Cash at Bank $1,484
Accounts Receivable $1,484
08-06-2018 Cash at Bank $1,862
Accounts Receivable $1,862
10-06-2018 Cash at Bank $1,954
Squash Fees $1,954
11-06-2018 Cash at Bank $1,456
Gym Fees $1,456

3ACCOUNTING
12-06-2018 Cash at Bank $2,091
Membership Fees $2,091
13-06-2018 Equipment Hiring Charges $671
Accounts Payable $671
13-06-2018 Accounts Receivable $825
Gym Fees $825
14-06-2018 Accounts Payable $610
Cash at Bank $610
15-06-2018 Wages Expense $2,157
Cash at Bank $2,157
16-06-2018 Advertising Expense $745
Cash at Bank $745
18-06-2018 Cash at Bank $1,860
Squash Fees $1,860
19-06-2018 Stationery Supplies $817
Cash at Bank $817
21-06-2018 Accounts Receivable $1,022
Squash Fees $1,022
21-06-2018 Drawings $879
Cash at Bank $879
24-06-2018 Cash at Bank $3,939
Capital $3,939
24-06-2018 Motor Vehicle Expense $238
Cash at Bank $238
25-06-2018 Accounts Payable $688
Cash at Bank $688
26-06-2018 Cash at Bank $2,103
Membership Fees $2,103

4ACCOUNTING
26-06-2018 Advertising Expense $1,132
Accounts Payable $1,132
27-06-2018 Equipment Hiring Charges $463
Cash at Bank $463
29-06-2018 Wages Expenses $2,157
Cash at Bank $2,157
29-06-2018 Cash at Bank $1,587
Gym Fees $1,587
General Ledger:
Cash at Bank Balance
Date Particulars Dr. Cr. Debit Credit
01-06-2018 Capital $10,120 $10,120
01-06-2018 Prepaid Insurance $2,375 $7,745
Sundry Expenses $278 $7,467
03-06-2018 Prepaid Rent $3,177 $4,290
04-06-2018 Accounts Receivable $1,484 $5,774
08-06-2018 Accounts Receivable $1,862 $7,636
10-06-2018 Squash Fees $1,954 $9,590
11-06-2018 Gym Fees $1,456 $11,046
12-06-2018 Membership Fees $2,091 $13,137
14-06-2018 Accounts Payable $610 $12,527
15-06-2018 Wages Expenses $2,157 $10,370
16-06-2018 Advertising Expense $745 $9,625
18-06-2018 Squash Fees $1,860 $11,485
19-06-2018 Stationery Supplies $817 $10,668
21-06-2018 Drawings $879 $9,789
24-06-2018 Capital $3,939 $13,728
24-06-2018 Motor Vehicle Expenses $238 $13,490
25-06-2018 Accounts Payable $688 $12,802
26-06-2018 Membership Fees $2,103 $14,905
27-06-2018 Equipment Hiring Charges $463 $14,442
29-06-2018 Wages Expenses $2,157 $12,285
Gym Fees $1,587 $13,872
$13,872

5ACCOUNTING
Accounts Receivable Balance
Date Particulars Dr. Cr. Debit Credit
01-06-2018 Capital $19,111 $19,111
Gym Fees $1,012 $20,123
03-06-2018 Squash Fees $1,046 $21,169
04-06-2018 Cash at Bank $1,484 $19,685
08-06-2018 Cash at Bank $1,862 $17,823
13-06-2018 Gym Fees $825 $18,648
18-06-2018 Squash Fees $1,022 $19,670
Prepaid Insurance Balance
Date Particulars Dr. Cr. Debit Credit
01-06-2018 Cash at Bank $2,375 $2,375
Prepaid Rent Balance
Date Particulars Dr. Cr. Debit Credit
03-06-2018 Cash at Bank $3,177 $3,177
Motor Vehicle Balance
Date Particulars Dr. Cr. Debit Credit
01-06-2018 Capital $32,752 $32,752
$32,752
Office Equipment Balance
Date Particulars Dr. Cr. Debit Credit
01-06-2018 Capital $21,829 $21,829
$21,829
Stationery Supplies Balance
Date Particulars Dr. Cr. Debit Credit
01-06-2018 Capital $409 $409
19-06-2018 Cash at Bank $817 $1,226
$1,226

6ACCOUNTING
Accounts Payable Balance
Date Particulars Dr. Cr. Debit Credit
01-06-2018 Capital $7,445 $7,445
13-06-2018 Equipment Hiring Charges $671 $8,116
14-06-2018 Cash at Bank $610 $7,506
25-06-2018 Cash at Bank $688 $6,818
26-06-2018 Advertising Expenses $1,132 $7,950
$7,950
Bank Loan Balance
Date Particulars Dr. Cr. Debit Credit
01-06-2018 Capital $25,131 $25,131
$25,131
Capital Balance
Date Particulars Dr. Cr. Debit Credit
01-06-2018 Cash at Bank $10,120 $10,120
Accounts Receivable $19,111 $29,231
Motor Vehicle $32,752 $61,983
Gym equipment $21,829 $83,812
Stationery Supplies $409 $84,221
Accounts Payable $7,445 $76,776
Bank Loan $25,131 $51,645
24-06-2018 Cash at Bank $3,939 $55,584
$55,584
Drawings Balance
Date Particulars Dr. Cr. Debit Credit
21-06-2018 Cash at Bank $879 $879
$879
Gym Fees Balance
Date Particulars Dr. Cr. Debit Credit
01-06-2018 Accounts Receivable $1,012 $1,012
11-06-2018 Cash at Bank $1,456 $2,468
13-06-2018 Accounts Receivable $825 $3,293

7ACCOUNTING
29-06-2018 Cash at Bank $1,587 $4,880
$4,880
$4,880
Squash Fees Balance
Date Particulars Dr. Cr. Debit Credit
03-06-2018 Accounts Receivable $1,046 $1,046
10-06-2018 Cash at Bank $1,954 $3,000
18-06-2018 Cash at Bank $1,860 $4,860
21-06-2018 Accounts Receivable $1,022 $5,882
$5,882
Membership Fees Balance
Date Particulars Dr. Cr. Debit Credit
12-06-2018 Cash at Bank $2,091 $2,091
26-06-2018 Cash at Bank $2,103 $4,194
$4,194
Sundry Expenses Balance
Date Particulars Dr. Cr. Debit Credit
01-06-
2018 Cash at Bank $278 $278
$278
Equipment Hiring Charges Balance
Date Particulars Dr. Cr. Debit Credit
13-06-
2018 Accounts Payable $671 $671
27-06-
2018 Cash at Bank $463 $1,134
Wages Expenses Balance
Date Particulars Dr. Cr. Debit Credit
15-06-
2018 Cash at Bank $2,157 $2,157

8ACCOUNTING
29-06-
2048 Cash at Bank $2,157 $4,314
Advertising Expenses Balance
Date Particulars Dr. Cr. Debit Credit
16-06-
2018 Cash at Bank $745 $745
26-06-
2018 Accounts Payable $1,132 $1,877
Motor Vehicle Expense Balance
Date Particulars Dr. Cr. Debit Credit
24-06-
2018 Cash at Bank $238 $238
$238
Unadjusted Trial Balance:
Unadjusted Trial Balance
as on 30 June 2018
Account Unadjusted T/B
DR CR
Cash at Bank $13,872
Accounts Receivable $19,670
Prepaid Insurance $2,375
Prepaid Rent $3,177
Motor Vehicle $32,752
Accumulated Depreciation - Motor Vehicle
Office Equipment $21,829
Accumulated Depreciation - Office Equipment
Stationery Supplies $1,226
Accounts Payable $7,950
Interest Payable
Wages Payable
Bank Loan $25,131
Capital $55,584
Drawings $879
Gym Fees $4,880
Squash Fees $5,882
Membership Fees $4,194
Sundry Expenses $278

9ACCOUNTING
Equipment Hiring Charges $1,134
Wages Expenses $4,314
Advertising Expenses $1,877
Motor Vehicle Expenses $238
Interest Expenses
Depreciation Expenses
Insurance Expenses
Rent Expenses
Supplies Expenses
TOTAL
$1,03,62
1
$1,03,62
1
10-Column Worksheet:
Account
DR CR DR CR DR CR DR CR DR CR
Cash at Bank $13,872 $13,872 $13,872
Accounts Receivable $19,670 $19,670 $19,670
Prepaid Insurance $2,375 $594 $1,781 $1,781
Prepaid Rent $3,177 $635 $2,542 $2,542
Motor Vehicle $32,752 $32,752 $32,752
Accumulated Depreciation - Motor Vehicle $1,148 $1,148 $1,148
Office Equipment $21,829 $21,829 $21,829
Accumulated Depreciation - Office Equipment $4,155 $4,155 $4,155
Stationery Supplies $1,226 $583 $643 $643
Accounts Payable $7,950 $7,950 $7,950
Interest Payable $188 $188 $188
Wages Payable $308 $308 $308
Bank Loan $25,131 $25,131 $25,131
Capital $55,584 $55,584 $55,584
Drawings $879 $879 $879
Gym Fees $4,880 $4,880 $4,880
Squash Fees $5,882 $5,882 $5,882
Membership Fees $4,194 $4,194 $4,194
Sundry Expenses $278 $278 $278
Equipment Hiring Charges $1,134 $1,134 $1,134
Wages Expenses $4,314 $308 $4,622 $4,622
Advertising Expenses $1,877 $1,877 $1,877
Motor Vehicle Expenses $238 $238 $238
Interest Expenses $188 $188 $188
Depreciation Expenses $5,303 $5,303 $5,303
Insurance Expenses $594 $594 $594
Rent Expenses $635 $635 $635
Supplies Expenses $583 $583 $583
Subtotal $15,453 $14,956 $93,968 $94,465
Profit (Loss) -$497 -$497
Total $1,03,621 $1,03,621 $7,612 $7,612 $1,09,421 $1,09,421 $14,956 $14,956 $93,968 $93,968
10 Column Worksheet
Unadjusted T/B Adjustments Adjusted T/B Income Statement Balance Sheet

10ACCOUNTING
Income Statement:
$ $
Gym Fees 4,880
Squash Fees 5,882
Membership Fees 4,194
TOTAL REVENUE 14,956
Sundry Expenses -278
Equipment Hiring Charges -1,134
Wages Expenses -4,622
Advertising Expenses -1,877
Motor Vehicle Expenses -238
Interest Expenses -188
Depreciation Expenses -5,303
Insurance Expenses -594
Rent Expenses -635
Supplies Expenses -583
TOTAL EXPENSES -15,453
NET LOSS FOR THE PERIOD -497
Income Statement
for the period ended 30 June 2018
Balance Sheet:
Balance Sheet
as on 30 June 2018
$ $
Current Assets:
Cash at Bank 13,872
Accounts Receivable 19,670
Prepaid Insurance 1,781
Prepaid Rent 2,542
Stationery Supplies 643
TOTAL CURRENT ASSETS 38,508
Non-Current Assets:
Motor Vehicle 32,752
Accumulated Depreciation - Motor Vehicle -1,148

11ACCOUNTING
Office Equipment 21,829
Accumulated Depreciation - Office Equipment -4,155
TOTAL NON-CURRENT ASSETS 49,278
TOTAL ASSETS 87,786
Current Liabilities:
Accounts Payable 7,950
Interest Payable 188
Wages Payable 308
TOTAL CURRENT LIABILITIES 8,447
Non-Current Liabilities:
Bank Loan 25,131
TOTAL NON-CURRENT LIABILITIES 25,131
TOTAL LIABILITIES 33,578
Capital:
Capital 55,584
Less: Net Loss -497
55,087
Less: Drawings -879
TOTAL CAPITAL 54,208
TOTAL LIABILITIES & CAPITAL 87,786
Difference between Accrual Profit & Cash Profit:
The main concepts which is used in accounting which is related to reporting and
recognising expenses and income are accrual and cash basis of accounting. The main difference
which can be identified between cash basis and accrual basis of accounting is related to the
difference in timing in which revenue and expenses of the business are recognize (Bac, 2013).
The cash method of accounting is considered to be immediate in recognition of revenue and
expenses whereas the accrual method considers anticipated revenue expenses of the business