Accounting Fundamentals Assignment Solution - LCBB4001, Term 1

This document presents a comprehensive solution to an Accounting Fundamentals assignment, covering key concepts and practical applications. The solution is divided into four tasks, each addressing different aspects of accounting. Task 1 focuses on recording transactions, preparing ledger accounts, developing a trial balance, and creating a statement of profit and loss and a balance sheet. Task 2 and Task 3 follow a similar structure, providing journal entries, ledger accounts, trial balances, and final accounts. Task 4 continues the pattern of journal entries and ledger accounts. The assignment covers a range of accounting principles, including transaction recording, ledger account creation, trial balance preparation, and the development of financial statements. The solution offers a detailed step-by-step approach to solving accounting problems, making it a valuable resource for students studying accounting fundamentals.

Accounting Fundamentals

TABLE OF CONTENTS
TASK 1......................................................................................................................................3
a. Recording transactions and preparing ledger accounts in the books of Maxim.................3
b. Developing trial balance for the month of April................................................................7
c. Preparing statement of profit & loss and balance sheet for the month of April.................7
TASK 2......................................................................................................................................9
a. Ledger accounts..................................................................................................................9
b. Trial balance.....................................................................................................................13
c. Final accounts...................................................................................................................14
TASK 3....................................................................................................................................15
a. Ledger accounts................................................................................................................15
b. trial balance......................................................................................................................19
c. Final accounts...................................................................................................................20

TASK 1
a. Recording transactions and preparing ledger accounts in the books of Maxim
Date Particulars Debit (in £) Credit (in £)
5 April Cash a/c Dr.
To capital a/c
300
300
7 April Purchase a/c Dr.
To cash a/c
200
200
8 April Bank a/c Dr.
To short term loan
a/c
250
250
15 April Motor van a/c Dr.
To cash / bank a/c
150
150
20 April Cash a/c Dr.
To Sales a/c
350
350
28 April Rent a/c Dr
To cash a/c
50
50
29 April Short term loan a/c
Dr.
To cash / bank a/c
200
200
30 April Drawing a/c Dr 60

To cash a/c 60
Ledger accounts
Cash a/c
Date Particulars Amount (in £) Date Particulars Amount
(in £)
5/4 To capital a/c 300 7/4 By
purchases
a/c
200
8/4 To short term
loan a/c
250 15/4 By motor
vehicle a/c
150
20/4 To sales a/c 350 28/4 By rent a/c 50
29/4 By short
term loan
a/c
200
30/4 By
drawings
a/c
60
30 /4 By balance
c/d
240
900 900
Capital a/c
Date Particulars Amount (in £) Date Particulars Amount
(in £)
30/4 To drawings 60 5/4 By cash a/c 300

a/c
30/4 To balance c/d 240
300 300
Short term loan a/c
Date Particulars Amount (in £) Date Particulars Amount
(in £)
29/4 To cash a/c 200 8/4 By bank a/c 250
30/4 To balance c/d 50
250 250
Purchase a/c
Date Particulars Amount (in £) Date Particulars Amount
(in £)
7/4 To cash a/c 200
30/4 By balance
c/d
200
200 200
Sales a/c

Date Particulars Amount (in £) Date Particulars Amount
(in £)
20/4 By cash 350
30/4 To balance c/d 350
350 350
Motor van a/c
Date Particulars Amount (in £) Date Particulars Amount
(in £)
15/4 To cash a/c 150
Rent a/c
Date Particulars Amount (in £) Date Particulars Amount
(in £)
28/4 To cash a/c 50
30/4 By balance
c/d
50
50 50

b. Developing trial balance for the month of April
Particulars Debit (in £) Credit (in £)
Cash 240
Purchases 200
Loan 50
Motor van 150
Sales 350
Rent 50
Capital 300
Drawings 60
Total 700 700
c. Preparing statement of profit & loss and balance sheet for the month of April
Income statement of Maxim on 30th April is as follows:
Particulars Amount (in £) Amount (in £)
Sales 350
Opening stock 0
Purchase 200
Closing stock (100) 100
Gross profit 250
Less: indirect expenses (rent) 50

Net profit 200
Balance sheet of bakery for the month ended on April is enumerated below:
Particulars Amount (in £) Amount (in £)
Assets
Fixed assets
Motor vehicle 150
Total fixed assets 150
Current assets
Closing stock 100
Cash 240
Total current assets 340
Total assets 490
Liabilities and
shareholders’ fund
Short term loan 50
Total non-current liabilities 50
Shareholders fund
Capital 300
Net profit 200
Drawing (60) 440
Total liabilities 490

TASK 2
a. Ledger accounts
Journal entries
Date Particulars Debit (in £) Credit (in £)
1/1 Cash a/c Dr
To capital a/c
5000
5000
2/1 Motor van a/c Dr
To cash a/c
600
600
3/1 Purchase a/c Dr
To cash a/c
1300
1300
4/1 Cash a/c Dr
To short term loan
a/c
1000
1000
10/1 Motor vehicle
expenses a/ Dr
To cash a/c
200
200
13/1 Cash a/c Dr
To Sales a/c
300
300
20/1 Cash a/c Dr
To Sales a/c
500
500
24/1 Storage expenses a/c
Dr
To cash a/c
150
150

24/1 P&L a/c Dr
To storage expenses
a/c
150
150
29/1 Short term loan /ac dr
To cash a/c
350
350
30/1 Drawing a/c Dr
To cash a/c
800
800
30/1 Capital a/c Dr
To Drawing a/c
800
800
Cash a/c
Date Particulars Amount (in £) Date Particulars Amount
(in £)
1/1 To capital a/c 5000 2/1 By motor
van
600
4/1 To short term
loan a/c
1000 3/1 By
purchases
1300
13/1 To sales a/c 300 10/1 By
expenses
200
20/1 To sales a/c 500 24/1 By storage
expenses
150
27/1 By short
term loan
350

30/1 By
drawings
a/c
800
31/1 By balance
c/d
3400
6800 6800
Purchases a/c
Date Particulars Amount (in £) Date Particulars Amount
(in £)
3/1 To cash a/c 1300 31/1 By balance
c/d
1300
1300 1300
Capital a/c
Date Particulars Amount (in £) Date Particulars Amount
(in £)
30/1 To drawings
a/c
800 1/1` By cash a/c 5000
31/1 To balance c/d 4200
5000 5000
Sales a/c

Date Particulars Amount (in £) Date Particulars Amount
(in £)
13/1 By cash a/c 300
31/1 To balance c/d 800 20/1 By cash a/c 500
800 800
Short term loan a/c
Date Particulars Amount (in £) Date Particulars Amount
(in £)
27/1 To cash a/c 350 4/1 By cash a/c 1000
31/1 To balance c/d 650
1000 1000
Motor van a/c
Date Particulars Amount (in £) Date Particulars Amount
(in £)
2/1 To cash a/c 600 31/1 By balance
c/d
600
600 600
Motor van expenses a/c
Date Particulars Amount (in £) Date Particulars Amount