Accounting Fundamentals Assignment: Maxim, Pendo, and Mafuta Cases

This assignment focuses on practical applications of accounting principles, including the preparation of ledger accounts, trial balances, profit and loss statements, and financial position statements. The assignment covers three different cases: Maxim, Pendo, and Mafuta, each involving various financial transactions that need to be recorded and analyzed. The solutions demonstrate the process of journalizing transactions, posting them to ledger accounts, preparing trial balances, and finally generating profit and loss statements and financial position statements. Additionally, the assignment highlights the difference between revenue and capital expenditure with reference to International Accounting Standards (IAS). The provided solutions offer a comprehensive understanding of the accounting cycle and financial statement preparation.

Accounting Fundamentals

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
a) Preparation of ledger accounts for accounting transactions of Maxim...................................3
b) Trial balance of above entries.................................................................................................5
c) Preparation of profit and loss statement of financial position statement of Maxim ..............5
TASK 2............................................................................................................................................6
a) Preparation of ledger accounts of following transactions of Pendo .......................................6
b) Preparation of Trial balance at 31st January of Pendo...........................................................9
c) Formation of profit and loss statement and financial position statement of Pendo..............10
TASK 3..........................................................................................................................................11
a) Preparation of Ledger accounts of Mafuta............................................................................11
b) Trial balance at 31st January of Mafuta................................................................................13
Profit and loss statement and financial position statement at 31st January of Mafuta.............14
TASK 4..........................................................................................................................................15
Ledger accounts and recording of transactions.........................................................................15
TASK 5..........................................................................................................................................19
Demonstrate the difference between revenue and capital expenditure with reference to
International accounting standard.............................................................................................19
CONCLUSION..............................................................................................................................21
REFRENCES.................................................................................................................................22

INTRODUCTION
Financial fundamental emphasise on recording all the financial transaction of business
that affects the functioning of business (Hilton and Platt, 2013). Financial department record,
summarize and finally present the business report for the interested stakeholders of the company.
Thus, company follows appropriate accounting standard such as IAS, IFRS and so on to make
the better comparison among various competitors. This report cover topics like practical
application of financial transaction, ledger account, trial balance, preparation of profit and loss
account that depict the actual position of business and demonstrate the difference between
revenue and capital expenditure with reference to International accounting standard (Wright,
2017).
TASK 1
a) Preparation of ledger accounts for accounting transactions of Maxim
Date Particular Debit amount Credit amount
05/04/18 Cash a/c 300
To capital 300
07/04/18 Purchase a/c 200
To cash a/c 200
08/04/18 Cash a/c 250
To loan form Tatiana 250
15/04/18 Motor car a/c 150
To van a/c 150
20/04/18 Cash a/c 350

To sales 350
28/04/18 rent a/c 50
To cash a/c 50
29/04/18 Loan a/c 200
To cash a/c 200
30/04/18 Drawing a/c 60
To cash a/c 60
Cash a/c
Date Particular Amount Date Particular Amount
05/04/18 To capital a/c 300 07/04/18 By purchase 200
08/04/18
To loan form
Tatiana 250 15/04/18 By Motor van 150
20/04/18 To sales 350 28/04/18 By rent 50
29/04/18 By loan paid 200
30/04/18 by Drawing 60
30/04/18
By closing
balance 240
900 900
Capital a/c
Date Particular Amount Date Particular Amount

30/04/18 To drawing 60 05/04/18 By cash 300
30/04/18 To closing balance 240
300 300
Purchase a/c
Date Particular Amount Date Particular Amount
07/04/18 To cash 200 30/04/18 By trading a/c 200
200 200
Loan a/c
Date Particular Amount Date Particular Amount
29/04/18 To cash 200 08/04/18 By cash 250
30/04/18 To closing balance 50
250 250
Motor van
Date Particular Amount Date Particular Amount
15/04/16 To cash 150 30/04/16
By closing
balance 150
150 150
Sales a/c
Date Particular Amount Date Particular Amount
30/04/16 To Trading a/c 350 20/04/18 By cash 350
350 350
Rent a/c
Date Particular Amount Date Particular Amount
28/04/18 To cash 50 20/04/18 By P&l ac 50
50 50
Drawing a/c

Date Particular Amount Date Particular Amount
30/04/18 To cash a/c 60 30/04/18 By capital a/c 60
60 60
b) Trial balance of above entries
Trial balance
S.N. Particulars
Debit
amount
Credit
amount
1 Cash 240 -
2 Capital - 240
3 Purchase 200 -
4 Loan a/c - 50
5 Motor Van 150 -
6 Sales - 350
7 Rent 50 -
Total 640 640
c) Preparation of profit and loss statement of financial position statement of Maxim
Trading and P&L a/c Statement
Particular Amount
Sales 350
Less: Cost of sales -100
(Purchase-closing
stock)
Gross profit 250

Rent paid 50
Net profit 200
Financial position statement
Assets
Non Current assets
Motor van 150
Current assets
Cash 240
Closing stock 100
Total assets 490
Liabilities
Capital 240
add: profit 200 440
Loan 50
Total liabilities 490
TASK 2
a) Preparation of ledger accounts of following transactions of Pendo
Journal entries
Date Particulars Amount (£) Amount (£)
01/01/18 Cash a/c 5000
To capital a/c 5000
(Being capital introduced)
02/01/18 Motor van 600
To cash a/c 600

(Being Motor van acquired)
03/01/18 Purchase a/c 1300
To cash a/c 1300
(Being purchase made)
04/01/18 Cash a/c 1000
To loan form Sergei a/c 1000
(Loan received from Sergie)
10/01/18 Motor expenses 200
To cash a/c 200
(Being motor expenses paid)
13/01/18 Cash a/c 300
To sales 300
(Sales made)
20/01/18 Cash a/c 500
To sales 500
(Being sales made)
24/01/18 Storage Expenses a/c 150
To cash a/c 150
(Being expenses made)
27/01/18 Loan a/c 350
To cash a/c 350
(Repayment of loan)
30/01/18 Drawing a/c 175
Cash 175

(Drawings made)
Ledger accounts
Cash a/c
Date Particular
Amount
(£) Date Particular
Amount
(£)
01/01/18 To capital a/c 5000 02/01/18 By motor van 600
04/01/18
To loan form
sergri 1000 03/01/18 By Purchase 1300
13/01/18 To sales 300 10/01/18 By motor expenses 200
20/01/18 To sales 500 24/01/18 By storage expenses 150
27/01/18
By repayment of
loan 350
30/01/18 By drawing 175
31/01/18 By closing balance 4025
6800 6800
Motor van a/c
Date Particular
Amount
(£) Date Particular
Amount
(£)
02/01/18 To Cash 600 31/01/18 By closing balance 600
600 600
Purchase a/c
Date Particular
Amount
(£) Date Particular
Amount
(£)
03/01/18 To Cash 1300 31/01/18 By trading a/c 1300

1300 1300
Loan form Sergie a/c
Date Particular
Amount
(£) Date Particular
Amount
(£)
27/01/18 To Cash 350 04/01/18 By cash 1000
31/01/18 To balance c/d 650
1000 1000
Sales a/c
Date Particular Amount (£) Date Particular
Amount
(£)
31/01/18 To trading a/c 800 13/01/18 By cash 300
20/01/18 By cash 500
800 800
Storage expenses
Date Particular
Amount
(£) Date Particular
Amount
(£)
24/01/18 To Cash 150 31/01/18 By P&L a/c 150
150 150
Drawing a/c
Date Particular
Amount
(£) Date Particular
Amount
(£)
30/01/18 To Cash 175 31/01/18 By Capital a/c 175
175 175

Capital a/c
Date Particular
Amount
(£) Date Particular
Amount
(£)
31/01/18 To Drawing 175 01/01/18 By cash 5000
31/01/18 To balance c/d 4825
5000 5000
Motor expenses
Date Particular
Amount
(£) Date Particular
Amount
(£)
10/01/18 To Cash 200 31/01/18 By P&L a/c 200
200 200
b) Preparation of Trial balance at 31st January of Pendo
Trial balance
S.N. Particulars
Debit Amount
(£) Credit Amount (£)
1 Cash 4025 -
2 Motor Van 600 -
3 Purchase 1300 -
4 Loan a/c - 650
5 Sales a/c - 800
6 Storage expenses 150 -
7 Capital - 4825

8 Motor expenses 200 -
Total 6275 6275
c) Formation of profit and loss statement and financial position statement of Pendo
Profit and loss statement
Particulates
Amount
(£)
Sales 800
Less: Cost of sales 500
(Purchase-closing stock)
Gross profit 300
Less: expenses
Storage expenses 150
Motor expenses 200
Net loss -50
Financial position statement
Non current assert Amount (£)
Motor van 600
Current assets
cash 4025
Stock 800
Total assets 5425
Equity
Capital