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