Accounting Homework: Comprehensive Accounting Problem and Analysis

This document presents a detailed solution to an accounting homework assignment. It covers a range of topics, including the preparation of ledger accounts, profitability statements, and balance sheets (Task 1). It also includes the creation of journal entries, trial balances, and income statements, along with balance sheets (Task 2, 3, and 4). The assignment further differentiates between revenue and capital expenditures (Task 5). The solutions provide step-by-step journal entries, detailed ledger accounts, trial balances, and comprehensive financial statements, illustrating the accounting processes from initial transactions to final financial reporting. These solutions are designed to aid students in understanding and mastering core accounting principles and practices.

ACCOUNTING

Table of Contents
TASK 1............................................................................................................................................2
a. Ledger accounts and balances..................................................................................................2
b. Profitability statement..............................................................................................................6
c. Balance sheet...........................................................................................................................7
TASK 2............................................................................................................................................8
a. Journal Entries......................................................................................................................8
b. Trial balance..........................................................................................................................13
c. Income statement and balance sheet......................................................................................14
TASK 3..........................................................................................................................................15
a) Journal entries.....................................................................................................................15
b) Ledger Accounts.............................................................................................................16
c) Trial Balance.......................................................................................................................19
d) Profit or Loss and Balance Sheet....................................................................................19
TASK 4..........................................................................................................................................20
a) Journal Entries....................................................................................................................20
b) Ledger Accounts.............................................................................................................21
c) Trial Balance.......................................................................................................................24
TASK 5..........................................................................................................................................25
Differentiate between Revenue Expenditure and Capital Expenditure.....................................25

TASK 1
a. Ledger accounts and balances
Ledger accounts of Maxim for the month of April
Date Particulars Debit (in £) Credit (in £)
5th April Cash a/c Dr
To capital a/c
300
300
7th April Purchase a/c Dr
To cash a/c
200
200
8th April Bank a/c Dr
To loan a/c
250
250
15th April Motor van a/c Dr
To cash a/c
150
150
20th April Cash a/c Dr
To Sales a/c
350
350
28th April Rent a/c Dr
To cash a/c
50
50
29th April Loan a/c
To cash at bank
200
200
30th April Drawing a/c Dr
To cash a/c
60
60
Cash a/c

Debit side Credit side
Date Particulars Amount (in
£)
Date Particulars Amount (in
£)
5th April To capital a/c 300 7th April By purchase
a/c
200
8th April To loan a/c 250 15th April By Motor van
a/c
150
20th April To Sales a/c 350 28th April By Rent a/c 50
29th April By Loan a/c 200
30th April By Drawing
a/c
60
30th April By balance
c/d
240
900 900
Capital a/c
Debit side Credit side
Date Particulars Amount (in
£)
Date Particulars Amount (in
£)
5th April By cash a/c 300
30th April To balance
c/d
300
300 300

Purchase a/c
Debit side Credit side
Date Particulars Amount (in
£)
Date Particulars Amount (in
£)
7th April To cash a/c 200
30th April By balance
c/d
200
200 200
Sales a/c
Debit side Credit side
Date Particulars Amount (in
£)
Date Particulars Amount (in
£)
20th April By Cash a/c 350
30th April To balance
c/d
350
350 350
Motor van a/c
Debit side Credit side
Date Particulars Amount (in
£)
Date Particulars Amount (in
£)

15th April To cash a/c 150
30th April To balance
c/d
150
150 150
Rent a/c
Debit side Credit side
Date Particulars Amount (in
£)
Date Particulars Amount (in
£)
28th April To cash a/c 50
30th April To balance
c/d
50
50 50
Loan a/c
Debit side Credit side
Date Particulars Amount (in
£)
Date Particulars Amount (in
£)
29th April To cash at
bank
200 8th April By cash at
bank
250
30th April To balance
c/d
50
250 250

Drawing a/c
Debit side Credit side
Date Particulars Amount (in
£)
Date Particulars Amount (in
£)
30th April To cash a/c 60
30th April To balance
c/d
60
60 60
Trial balance
Debit (in £) Credit (in £)
Cash 240
Capital 300
Loan 50
Purchase 200
Sales 350
Closing stock 100
Motor van 150
Rent 50
Drawing 60
b. Profitability statement
Income statement of Maxim at the end of 30th April

Particulars Amount (in £) Amount (in £)
Sales 350
Less: COGS
Opening stock 0
Add: purchase 200
Less: closing stock 100 100
GP 250
Less: indirect expense
Rent 50
NP 200
c. Balance sheet
Statement of financial position of Maxim at the end of 30th April
Particulars Amount (in £) Amount (in £)
Assets
Fixed assets
Motor Van 150 150
Current assets
Cash 240
Closing stock 100 340
Total assets 490

Liabilities and shareholders’
equity
Loan 50
Capital 300
Add: net profit 200
Less: Drawing 60 440
Total Liabilities and
shareholders’ equity
490
TASK 2
a. Journal Entries
Date Particulars Debit (in £) Credit (in £)
1st Jan Cash a/c Dr
To capital a/c
5000
5000
2nd Jan Motor van a/c Dr
To cash a/c
600
600
3rd Jan Purchase a/c Dr
To cash a/c
1300
1300
4th Jan Cash a/c Dr
To loan a/c
1000
1000
10th Jan Expenses a/c Dr
To cash a/c
200
200

13th Jan Cash a/c Dr
To sales a/c
300
300
20th Jan Cash a/c Dr
To sales a/c
500
500
24th Jan Storage expenses a/c
Dr
To cash a/c
150
150
27th Jan Loan a/c Dr
To cash a/c
350
350
30th Jan Drawing a/c Dr
To cash a/c
175
175
Cash a/c
Debit side Credit side
Date Particulars Amount (in
£)
Date Particulars Amount (in
£)
1st Jan To capital a/c 5000 3rd Jan By purchase
a/c
1300
4th Jan To loan a/c 1000 2nd Jan By Motor van
a/c
600
13th Jan To Sales a/c 300 24th Jan Storage
expenses a/c
150
20th Jan To Sales a/c 500 27th Jan By Loan a/c 350

30th Jan By Drawing
a/c
175
10th Jan By expense
a/c
200
31st Jan By balance
c/d
4025
6800 6800
Capital a/c
Debit side Credit side
Date Particulars Amount (in
£)
Date Particulars Amount (in
£)
1st Jan By cash a/c 5000
31st Jan To balance
c/d
5000
5000 5000
Purchase a/c
Debit side Credit side
Date Particulars Amount (in
£)
Date Particulars Amount (in
£)
3rd Jan To cash a/c 1300
31st Jan By balance 1300

c/d
1300 1300
Sales a/c
Debit side Credit side
Date Particulars Amount (in
£)
Date Particulars Amount (in
£)
13th Jan By Cash a/c 300
30th April To balance
c/d
800 20th Jan By Cash a/c 500
800 800
Motor van a/c
Debit side Credit side
Date Particulars Amount (in
£)
Date Particulars Amount (in
£)
2nd Jan To cash a/c 600
31st Jan To balance
c/d
600
600 600
Storage expenses a/c
Debit side Credit side