Accounting Fundamentals: Ledger & Financial Statements

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ACCOUNTING FUNDAMENTALS
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Table of Contents
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................4
Task 2...............................................................................................................................................7
Task 3.............................................................................................................................................10
Task 4.............................................................................................................................................14
Task 5.............................................................................................................................................17
Conclusion.....................................................................................................................................18
References......................................................................................................................................19
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Introduction
Details provided in tasks consists of various accounting activities related to preparing ledger,
financial statements as like trial balance, trading and profit, and loss account, balance sheet. Each
stage covered under chronological order and thus covers all the aspects from beginning to an
ending activity. Thus to prepare this one should have to reconcile each and every activity and for
that double entry system reflects every entry covers two aspects. For better presentation, Each
and every ledger should cover be prepared.
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Task 1
(A) Accounting entries presented in form of various ledger accounts: -
Accounting in the books of Maxim
Cash Account
Date Particulars
Amount(in
£) Date Particulars
Amount(in
£)
5-Apr To Capital account 300 7-Apr By cash 200
8-Apr
To Tatiana loan
account 250
15-
Apr By motor van 150
20-
Apr To Sales account 350
28-
Apr By rent account 50
29-
Apr
By Tatiana loan
account 200
30-
Apr By capital account 60
30-
Apr By balance C/d 240
Total 900 Total 900
Capital Account
Date Particulars
Amount(in
£) Date Particulars
Amount(in
£)
30-
Apr To cash account 60 5-Apr By cash account 300
30-
Apr To balance c/d 240
Total 300 Total 300
Purchase Account
Date Particulars
Amount(in
£) Date Particulars
Amount(in
£)
7-Apr To cash 200
30-
Apr By Trading Account 200
Total 200 Total 200
Tatiana loan Account
Date Particulars
Amount(in
£) Date Particulars
Amount(in
£)
29-
Apr To cash account 200 8-Apr By cash account 250
30-
Apr To balance c/d 50
4

Total 250 Total 250
Motor van Account
Date Particulars
Amount(in
£) Date Particulars
Amount(in
£)
15-
Apr To cash account 150
30-
Apr By balance C/d 150
Total 150 Total 150
5

Rent Account
Date Particulars Amount(in £) Date Particulars Amount(in £)
28-Apr To cash account 50 30-Apr By P&L account 50
Total 50 Total 50
sales Account
Date Particulars Amount(in £) Date Particulars Amount(in £)
30-Apr By Trading Account 350 20-Apr By cash account 350
Total 350 Total 350
(B) List of account balances reflects as on 30th April.
TRIAL BALANCE
SR.NO. PARTICULARS Debit Credit
1 cash account 240
2 capital account 240
3 Tatiana loan account 50
4 Motor van account 150
5 Net profit 200
6 Closing stock 100
Total 490 490
(C) Statement of Profit and Loss account and Statement of financial position
Trading and profit and loss Account
Particular Amount Particular Amount
To Opening stock 0 By Sales 350
To Purchases 200 By Closing Stock 100
To gross profit 250
Total 450 Total 450
To rent 50 By gross profit 250
To Net profit 200
Total 250 Total 250
Balance sheet
Particular Amount Particular Amount
Capital 240 Motor van 150
Net profit 200 cash 240
Tatiana loan 50 Closing stock 100
6

Total 490 Total 490
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Task 2
(a) Accounting in the books of pendo, a second-hand furniture dealer.
Accounting in the books of Pendo
Cash Account
Date Particulars
Amount(in
£) Date Particulars
Amount(in
£)
1-Jan To capital 5000 2-Jan By Motor van 600
4-Jan To sargei loan 1000 3-Jan By purchases 1300
13-
Jan To Sales 300
10-
Jan
By Motor van
expenses 200
20-
Jan To Sales 500
24-
Jan By storage expenses 150
27-
Jan By Sargei loan 350
30-
Jan By capital 175
31-
Jan By Balance c/d 4025
Total 6800 Total 6800
Capital Account
Date Particulars
Amount(in
£) Date Particulars
Amount(in
£)
30-
Jan To cash 175 1-Jan By cash 5000
31-
Jan To balance c/d 4825
Total 5000 Total 5000
Motor van Account
Date Particulars
Amount(in
£) Date Particulars
Amount(in
£)
2-Jan To cash 600
31-
Jan By Balance c/d 600
Total 600 Total 600
Motor van expenses Account
Date Particulars
Amount(in
£) Date Particulars
Amount(in
£)
10- To cash 200 31- By P&L account 200
8

Jan Jan
Total 200 Total 200
Purchase Account
Date Particulars
Amount(in
£) Date Particulars
Amount(in
£)
3-Jan To cash 1300
31-
Jan By Trading account 1300
Total 1300 Total 1300
large loan Account
Date Particulars
Amount(in
£) Date Particulars
Amount(in
£)
27-
Jan To cash 350 4-Jan By cash 1000
31-
Jan To balance c/d 650
Total 1000 Total 1000
Storage Expenses Account
Date Particulars
Amount(in
£) Date Particulars
Amount(in
£)
24-
Jan To cash 150
31-
Jan By P & L account 150
Total 150 Total 150
Sales Account
Date Particulars
Amount(in
£) Date Particulars
Amount(in
£)
31-
Jan
To Trading
account 800
13-
Jan By Cash 300
20-
Jan By Cash 500
Total 800 Total 800
(b) Trial balance as at 31 January
TRIAL BALANCE
SR.NO. PARTICULARS Debit Credit
1 cash account 4025
2 capital account 4825
3 Sargei loan account 650
4 Motor van account 600
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5 Closing stock 800
6 Profit and Loss 50
Total 5475 5475
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(c) Statement of profit and loss account and Balance sheet as on 31 January.
Trading and profit and loss Account
Particular Amount Particular Amount
To Opening stock 0 By Sales 800
To Purchases 1300 By Closing Stock 800
To gross profit 300
Total 1600 Total 1600
To rent 150 By gross profit 300
To Motor van expenses 200
By Net Loss 50
Total 350 Total 350
Balance sheet
Particular Amount Particular Amount
Fixed Assets
Capital 4825 Motor van 600
Current Assets
Cash 4025
Sargei loan 650 Closing stock 800
Profit and loss 50
Total 5475 Total 5475
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Task 3
(a) Details in relation to relevant ledger accounts
Accounting in the books of Mufuta
Cash Account
Date Particulars Amount(in £) Date Particulars Amount(in £)
1-Jan To Balance b/d 343 5-Jan By Wages 12
7-Jan To Smith 18 9-Jan By Max 21
11-Jan To Sales 64 14-Jan By wages 14
21-Jan To Sales 110 14-Jan By Purchases 75
23-Jan To Harvey 25 15-Jan By rich 162
28-Jan To Sales 84 20-Jan By office desk 32
31-Jan To Sales 30 21-Jan By Wages 17
23-Jan By office expenses 3
28-Jan By Wages 15
31-Jan By Balance c/d 323
Total 674 Total 674
Furniture and fittings Account
Date Particulars Amount(in £) Date Particulars Amount(in £)
1-Jan To Balance b/d 198 31-Jan By Balance c/d 198
Total 198 Total 198
Purchase Account
Date Particulars Amount(in £) Date Particulars Amount(in £)
5-Jan To Rich 150 31-Jan By Trading account 225
14-Jan To Cash 75
Total 225 Total 225
Receivable (Smith) Account
Date Particulars Amount(in £) Date Particulars Amount(in £)
1-Jan To Balance b/d 18 7-Jan By cash 18
Total 18 Total 18
Receivable (Harvey) Account
Date Particulars Amount(in £) Date Particulars Amount(in £)
1-Jan To Balance B/d 39 23-Jan By Cash 25
2-Jan To sales 124 31-Jan By Balance c/d 138
Total 163 Total 163
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