Accounting Assignment: Ledger Accounts, Trial Balance, Statements

This accounting assignment solution presents a detailed analysis of various accounting problems, focusing on the preparation of journal entries, ledger accounts, and financial statements. The solution includes tasks that involve creating ledger accounts, preparing trial balances, and constructing profit and loss statements and balance sheets for different periods. The assignment covers a range of transactions, including cash transactions, purchases, sales, and expenses, and demonstrates the process of balancing accounts and presenting financial data. Furthermore, the assignment explores the differences between capital and revenue expenditures with reference to International Accounting Standards (IAS), providing a comprehensive understanding of accounting principles and practices. The solution includes detailed workings and calculations to illustrate the accounting processes involved.

ACCOUNTING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
A. Preparation of ledger accounts................................................................................................1
B. List of accounts balanced on 30th April...................................................................................4
C. Presenting profit and loss statement and balance sheet dates 30th April.................................4
TASK 2............................................................................................................................................6
A. Preparation of ledger accounts................................................................................................6
B. List of accounts balanced on 31st January...............................................................................6
C. Presenting profit and loss statement and balance sheet dates 31st January.............................9
TASK 3............................................................................................................................................9
A. Preparation of ledger accounts................................................................................................9
B. List of accounts balanced on 31st January.............................................................................15
C. Presenting profit and loss statement and balance sheet dates 31st January...........................15
TASK 4..........................................................................................................................................17
Preparation of relevant ledgers and trial balance as on 27th June..............................................17
TASK 5..........................................................................................................................................23
Ascertaining the differences between Capital and revenue expenditures with reference to
International accounting standards (IAS)..................................................................................23
CONCLUSION..............................................................................................................................24
REFERENCES..............................................................................................................................25

INTRODUCTION
Accounting is the technique of gathering the transactional data recorded in the various books
which were later summarized in the final accounts and represent the financial health of the
organisation. In the present report, there will be discussion based on various accounting
problems which will be solved in the various final accounts. There will be presentation of
journal, ledgers and final accounts with reference to its workings.
TASK 1
A. Preparation of ledger accounts
Date Journal entry
Debit
(£)
Credit
(£)
05/Apr Cash A/c Dr 300
To capital A/c 300
07/Apr Purchase A/c Dr 200
To cash A/c 200
08/Apr Cash A/c Dr 250
To loan A/c 250
15/Apr Motor van A/c Dr 150
To cash A/c 150
20/Apr Cash A/c Dr 350
To sales A/c 350
28/Apr Rent A/c Dr 50
To Cash A/c 50
29/Apr Loan A/c Dr 200
To cash A/c 200
30/Apr Drawing A/c Dr 60
To cash A/c 60
Cash A/c
Date Particular Amount Date Particular Amount (£)
1

(£)
05/04/18 To capital 300 07/04/18 By purchase 200
08/04/18 To loan 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 200
30/04/18 By Drawing 60
30/04/18 By balance c/d 240
Total 900 Total 900
Motor van A/c
Date Particular Amount
(£)
Date Particular Amount (£)
15/04/18 To cash 150 30/04/18 By balance c/d 150
Total 150 Total 150
Capital A/c
Date Particular Amount
(£)
Date Particular Amount (£)
30/04/18 To balance c/d 300 05/04/18 By cash 300
Total Total
Sales A/c
Date Particular Amount (£) Date Particular Amount (£)
30/04/18 To balance c/d 350 20/04/18 By cash 350
2

Total 350 Total 350
Purchase A/c
Date Particular Amount
(£)
Date Particular Amount (£)
07/04/18 To cash 200 30/04/18 By balance c/d 200
Total 200 Total 200
Drawing A/c
Date Particular Amount
(£)
Date Particular Amount (£)
30/04/18 To cash 60 30/04/18 By balance c/d 60
Total 60 Total 60
Rent A/c
Date Particular Amount
(£)
Date Particular Amount (£)
28/04/18 To cash 50 30/04/18 By balance c/d 50
Total 50 Total 50
Loan A/c
Date Particular Amount Date Particular Amount (£)
3

(£)
29/04/18 To cash 200 048/Apr By cash 250
30/04/18 To balance c/d 50
Total 250 Total 250
B. List of accounts balanced on 30th April
Trial balance
(as on 30 April)
Particulars
Debit
(£)
Credit
(£)
Cash A/c 240
Purchase A/c 200
Loan A/c 50
Motor van A/c 150
Capital A/c 300
Sales A/c 350
Drawing A/c 60
rent A/c 50
Total 700 700
C. Presenting profit and loss statement and balance sheet dates 30th April
Income statement
(as on 30th April)
Particular Amount (£)
Net sales revenue 350
Less: Cost of goods sold 100
4

GP 250
Less: Rent 50
Less: Drawings 60
NP 140
Working note
Particulars Amount
(£)
Opening inventories Nil
Add: Purchase 200
Less: Closing inventories 100
COGS 100
Financial Position
(As on 30 April)
Assets Amount
(£)
Liabilities Amount
(£)
FA Capital 300
Motor van 150 Less: Drawings 60
CA Add: net profit 140
Inventory 100 380
cash 240 loan 250
Less: Repaid 200
50
Total 490 Total 430
5

TASK 2
A. Preparation of ledger accounts
Date Particulars Debit
(£)
Credit
(£)
1-Jan Cash A/c 5000
To Capital 5000
2-Jan Motor Van expenses A/c 600
To cash 600
3-Jan Purchase A/c 1300
To Cash 1300
4-Jan Cash A/c 1000
To loan 1000
10-Jan Motor Van expenses A/c 200
To Cash 200
13-Jan Cash A/c 300
To sales 300
20-Jan Cash A/c 500
To sales 500
24-Jan Storage expenses A/c 150
To cash 150
27-Jan Loan A/c 350
To cash 350
30-Jan Drawing A/c 175
To cash 175
B. List of accounts balanced on 31st January
CASH ACCOUNT
Date Particulars Amount
(£) Date Particulars Amount
(£)
1-Jan To capital 5000 2-Jan By Motor Van 600
4-Jan To Sergei 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 loan 350
6

30-Jan By Drawings 175
By Balance c/d 4025
Total 6800 Total 6800
SALES ACCOUNT
Date Particulars Amount
(£)
Date Particulars Amount
(£)
To balance
c/d
800 13-Jan By Cash 300
20-Jan By cash 500
Total 800 Total 800
MOTOR VAN
Date Particulars Amount
(£)
Date Particulars Amount
(£)
2-Jan To Cash 600 By balance c/d 600
Total 600 Total 600
LOAN ACCOUNT
Date Particulars Amount
(£)
Date Particulars Amount
(£)
27-Jan To Cash 350 By cash 1000
To balance c/d 650
Total 1000 Total 1000
PURCHASE ACCOUNT
Date Particulars Amount
(£)
Date Particulars Amount
(£)
3-Jan To Cash 1300 By balance c/d 1300
Total 1300 Total 1300
EXPENSES ACCOUNT
Date Particulars Amount
(£)
Date Particulars Amount
(£)
7

10-Jan To Cash 200 By balance c/d 350
24-Jan To Cash 150
Total 350 Total 350
DRAWING ACCOUNT
Date Particulars Amount
(£)
Date Particulars Amount
(£)
30-Jan To Cash 175 By balance c/d 175
Total 175 Total 175
CAPITAL ACCOUNT
Date Particulars Amount
(£)
Date Particulars Amount
(£)
1-Jan To Cash 5000 By balance c/d 5000
Total 5000 Total 5000
SERGEI ACCOUNT
Date Particulars Amount
(£)
Date Particulars Amount
(£)
To balance c/d 1000 4-Jan By Cash 1000
Total 1000 Total 1000
Trial Balance
(as on 31 January 2018)
S. No. Particulars
Debit
(£)
Credit
(£)
1 Cash 4025
2 Sales 800
3 Motor van 600
4 Loan 650
5 Purchases 1300
6 Expenses 350
7 Drawing 175
8 Capital 5000
Total 6450 6450
8

C. Presenting profit and loss statement and balance sheet dates 31st January
Income statement
(as on 31 January)
Particulars Details
(£)
Amount
(£)
Net sales revenue 800
less: Cost of goods sold 500
GP 300
less: Operating expenses
Motor van expenses 200
Storage expenses 150
Total operating expenses 350
Net Loss -50
Working note:
Calculation for Cost of goods sold
Inventories at the beginning nil
Add: purchases 1300
less: closing inventories 800
Total 500
TASK 3
A. Preparation of ledger accounts
Date Journal entry
Debit
(£)
Credit
(£)
02/01 Harvey A/c Dr 124
To sales A/c 124
05/01 Wages A/c Dr 12
To cash A/c 12
9

05/01 Purchase A/c Dr 150
To Rich A/c 150
07/01 Cash A/c Dr 18
To Smith A/c 18
09/01 Max A/c Dr 21
To cash A/c 21
11/01 Cash A/c Dr 64
To sales A/c 64
14/01 Wages A/c Dr 14
To cash A/c 14
14/01 Purchase A/c Dr 75
To cash A/c 75
15/01 Rich A/c Dr 162
To cash A/c 162
20/01 office Desk A/c Dr 32
To cash A/c 32
21/01 Wages A/c Dr 17
To cash a/c Dr 17
21/01 Cash A/c Dr 110
To sales A/c 110
23/01 Office expenses A/c Dr 3
To cash A/c 3
23/01 Cash A/c Dr 25
To Harvey A/c 25
28/01 Cash A/c Dr 84
To sales A/c 84
28/01 Wages A/c Dr 15
To cash A/c 15
31/01 Cash A/c Dr 30
To sales A/c 30
10

Sales A/c
Date Particular Amount
(£)
Date Particular Amount
(£)
31/01/18 To balance c/d 412 02/01/18 By Harvey 124
11/01/18 By cash 64
21/01/18 By cash 110
28/01/18 By cash 84
31/01/18 By cash 30
Total 412 Total 412
Cash A/c
Date Particular Amount
(£)
Date Particular Amount
(£)
01/01/18 To balance B/d 343 05/01/18 By wages 12
07/01/18 To smith 18 09/01/18 By Max 21
11/01/18 To sales 64 14/01/18 By wages 14
21/01/18 To sales 110 15/01/18 By Rich 162
23/01/18 To Harvey 25 20/01/18 By office desk 32
28/01/18 To sales 84 21/01/18 By wages 17
31/01/18 To sales 30 23/01/18 By office
expense
3
28/01/18 By wages 15
14/01/18 By purchase 75
31/01/18 By balance c/d 323
Total 674 Total 674
Wages A/c
11

Date Particular Amount
(£)
Date Particular Amount
(£)
05/01/18 To cash 12 31/01/18 By balance c/d 58
14/01/18 To cash 14
21/01/18 To cash 17
28/01/18 To cash 15
Total 58 Total 58
Office expense A/c
Date Particular Amount
(£)
Date Particular Amount
(£)
23/01/18 To cash A/c 3 31/01/18 By balance c/d 3
Total 3 Total 3
Office desk A/c
Date Particular Amount
(£)
Date Particular Amount
(£)
20/01/18 To cash 32 31/01/18 By balance c/d 32
Total 32 Total 32
Harvey A/c
Date Particular Amount
(£)
Date Particular Amount
(£)
01/01/18 To balance B/d 39 23/01/18 By cash 25
12

02/01/18 To sales 124
31/01/18 By balance c/d 138
Total 163 Total 163
Rich A/c
Date Particular Amount
(£)
Date Particular Amount
(£)
15/01/18 To cash 162 01/01/18 By balance b/d 12
05/01/18 By purchase 150
Total 162 Total 162
Max A/c
Date Particular Amount
(£)
Date Particular Amount
(£)
09/01/18 To cash 21 01/01/18 By balance b/d 21
Total 21 21
Purchase A/c
Date Particular Amount
(£)
Date Particular Amount
(£)
05/01/18 To Rich 150 31/01/18 By balance c/d 225
14/01/18 To cash 75
Total 225 Total 225
13

Inventtory A/c
Date Particular Amount
(£)
Date Particular Amount
(£)
01/01/18 To balance B/d 458 31/01/18 By COGS 84
31/01/18 By balance c/d 374
Total 458 Total 458
Furniture and fitting A/c
Date Particular Amount
(£)
Date Particular Amount
(£)
01/01/18 To balance b/d 198 31/01/18 By balance c/d 198
Total 198 Total 198
Moon a/c
Date Particular Amount
(£)
Date Particular Amount
(£)
01/01/18 To balance B/d 26 31/01/18 By balance c/d 26
Total 26 Total 26
Smith A/c
Date Particular Amount
(£)
Date Particular Amount
(£)
01/01/18 To balance B/d 18 07/01/18 By cash 18
14

Total 18 Total 18
B. List of accounts balanced on 31st January
Trial balance
(As on 31 January)
Particulars Debit
(£)
Credit
(£)
Cash A/c 323
Sales A/c 412
wages a/c 58
Office expense a/c 3
Office desk A/c 32
Harvey A/c 138
Purchase A/c 225
Inventory A/c 374
furniture and fittings 198
Moon A/c 26
Capital
(Balancing figure)
965
Total 1377 1377
C. Presenting profit and loss statement and balance sheet dates 31st January
Income statement
(As on 31 January)
Particular Amount (£)
Net sales revenue 412
less: Cost of goods sold 309
GP 103
15

Expenses
Office expense 3
wages 58
NP 42
working note
Particulars Amount
(£)
Inventories at the beginning 458
Add: Purchase 225
Less: closing inventories 374
Cost of goods sold 309
Financial position
(as on 31 January)
Assets Amount
(£)
Liabilities Amount
(£)
FA Capital 965
Furniture and fittings 198 Add: Net profit 42
Office desk 32 bank O/d 84
CA
Cash 323
Inventory 374
debtors
Harvey 138
Moon 26
Total 1091 Total 1091
16

TASK 4
Preparation of relevant ledgers and trial balance as on 27th June
Journal Entries
Date Particulars
Debit
(£)
Credit
(£)
02/06/18 Claire a/c 425
To sales 425
13/06/18 Purchase a/c 12000
To discount received 840
To Georgine 11160
14/06/18 Hywel a/c 8550
Trade a/c 450
To sales 9000
20/06/18 Jane a/c 6000
To cash 6000
21/06/18 Purchase a/c 4500
To discount received 90
To Andrew 4410
22/06/18 Sales return a/c 1000
To Clarie 1000
24/06/18 Mandy a/c 4850
Discount payable a/c 150
To sales 5000
17

24/06/18 cash a/c 7075
Discount payable a/c 425
To claire 7500
25/06/18 cash a/c 8550
To Hywel a/c 8550
25/06/18 Georgina a/c 11160
To Ricardo 11160
27/06/18 Andrew a/c 4410
To Ricardo 4410
CASH ACCOUNT
Date Particulars Amount
(£)
Date Particulars Amount
(£)
24/06/18 To clarie 8075 20/06/18 By Jane 6000
25/06/18 To Hywel 9000 By balance c/d 11075
Total 17075 Total 17075
CLAIRE ACCOUNT
Date Particulars
Amount
(£) Date Particulars
Amount
(£)
02/06/18 To sales 425 22/06/18 By sales return 1000
To discount
To balance c/d 8075 24/06/18 By cash 7075
24/06/18
18

Total 8500 Total 8075
SALES ACCOUNT
Date Particulars Amount
(£)
Date Particulars Amount
(£)
To balance
c/d
14700 02/06/18 By claire 425
14/06/18 By Hywel 8550
14/06/18 By trade 450
24/06/18 By Mandy 4850
24/06/18 By discount 425
Total 14700 Total 14700
PURCHASE ACCOUNT
Date Particulars Amount
(£)
Date Particulars Amount
(£)
13/06/18 To discount received 840 By balance
c/d
16500
13/06/18 To Georgine 11160
21/06/18 To discount received 90
21/06/18 To Andrew 4410
Total 16500 Total 16500
GEORGINE ACCOUNT
Date Particulars Amount Date Particulars Amount
19

(£) (£)
16/06/1
8
To discount received 840 13/06/1
8
By purchases 12000
25/06/1
8
To Ricardo 11160 By cash 9000
Total 12000 Total 12000
HYWEL ACCOUNT
Date Particulars Amount
(£)
Date Particulars Amount
(£)
14/06/18 To sales 9000 14/06/18 By trade 450
By cash 8550
Total 9000 Total 9000
JANE ACCOUNT
Date Particulars Amount
(£)
Date Particulars Amount
(£)
20/06/18 To cash 6000 By balance c/d 6000
Total 6000 Total 6000
ANDREW ACCOUNT
Date Particulars Amount
(£)
Date Particulars Amount
(£)
27/06/18 To ricardo 4410 21/06/18 By purchases 4500
20

21/06/18 To discount
received
90
Total 4500 Total 4500
SALES RETURN ACCOUNT
Date Particulars Amount
(£)
Date Particulars Amount
(£)
22/06/18 To clarie 1000 By balance
c/d
1000
Total 1000 Total 1000
MANDY ACCOUNT
Date Particulars Amount
(£)
Date Particulars Amount
(£)
24/06/18 To sales 5000 24/06/18 By discount 150
By balance c/d 4850
Total 5000 Total 5000
RICARDO ACCOUNT
Date Particulars Amount
(£)
Date Particulars Amount
(£)
To balance c/d 15570 25/06/18 By georgina 11160
27/06/18 By andrew 4410
Total 15570 Total 15570
21