Freddy Traders Business Portfolio: Financial Statement Analysis

This business portfolio assignment meticulously details the financial activities of Freddy Traders. It begins with comprehensive journal entries, meticulously recording transactions such as initial investments, purchases, sales, and various payments and receipts. These entries are then organized into ledgers, providing a clear overview of individual accounts like cash, bank, purchases, sales, and capital. A trial balance is then constructed to ensure the accounting equation is balanced, followed by the creation of a trading account and income statement to determine the company's profitability. Finally, a balance sheet is prepared to present a snapshot of Freddy Traders' assets, liabilities, and equity at a specific point in time. The assignment covers the accounting cycle from recording transactions to preparing financial statements, offering a practical understanding of financial analysis.

Business Portfolio

TABLE OF CONTENTS
TASKS.............................................................................................................................................3
Journal Entries:............................................................................................................................3
Ledgers:.......................................................................................................................................8
Trial Balance:.............................................................................................................................13
Trading Account and Income Statement:..................................................................................14
Balance Sheet:............................................................................................................................15

TASKS
Journal Entries:
In the books of Freddy Traders
Journal Entries
Dates Details L.F Debits Credits
01/Apr
Freddy begin business and invested cash
amounting 600,000, cash sum at Bank of Asia
amounting 700,000 and furniture amounting
200,000.
Cash Account
Bank of Asia Account
Furniture and fixtures Account
To Freddy's Capital Account
600,000
700,000
200,000 15,00,00
0
01/Apr
Bought Plant and Machinery amounting 250,000
through cheque.
Plant and Machinery
To Bank of Asia Account
2,50,000
2,50,000
25/04/2
0
Bought goods from XYZ limited amounting
800,000 at the rate of 10% trade-discount.
Purchases Account
To XYZ limited Account
7,20,000
7,20,000
05/May
Cash Sales amounting 1,000,000 at the rate of 5%
trade discount to XYZ Traders
Cash Account
To Sales Account
To Sales Account
To Sales Account
9,50,000 9,50,000

To Sales Account
15/May
Deposited cash sum with the Bank of Asia
amounting 500,000.
Bank of Asia Account
To Cash Account
To Cash Account
To Cash Account
To Cash Account
5,00,000
5,00,000
05/Jun Paid to XYZ limited 300,000 in cash.
XYZ limited Account
To Cash Account
To Cash Account
To Cash Account
To Cash Account
3,00,000
3,00,000
10/Jun
Received commission amounting 75,000 through
cheque.
Bank of Asia Account
To Commission received Account
To Commission received Account
To Commission received Account
To Commission received Account
75,000
75,000
25/Jun Cash Purchases made of 250,000.
Purchases Account
To Cash Account
To Cash Account
To Cash Account
To Cash Account
2,50,000
2,50,000
05/Jul Sold goods items to XYZ Traders amounting

475,000.
XYZ Traders Account
To Sales Account
To Sales Account
To Sales Account
To Sales Account
4,75,000
4,75,000
15/Jul
Received sum of 275,000 through cheque from
XYZ Traders.
Bank of Asia Account
To XYZ Traders Account
To XYZ Traders Account
To XYZ Traders Account
To XYZ Traders Account
2,75,000
2,75,000
05/Aug Loan obtained from the Bank of Asia 200,000
Bank of Asia Account
To Bank Loan Account
To Bank Loan Account
To Bank Loan Account
To Bank Loan Account
2,00,000
2,00,000
25/Aug
Bought goods items from XYZ limited amounting
50,000.
Purchases Account
To XYZ limited Account
To XYZ limited Account
To XYZ limited Account
50,000
50,000
27/Aug Withdrawal of cash from the bank account 10,000.
Cash Account
To Bank of Asia Account
10,000 10,000

To Bank of Asia Account
To Bank of Asia Account
05/Sep Received commission amounting 55000 in cash.
Cash Account
To Commission received Account
To Commission received Account
To Commission received Account
55,000
55,000
10/Sep Paid to XYZ limited 70,000 through cheque.
XYZ limited Account
To Bank of Asia Account
To Bank of Asia Account
To Bank of Asia Account
70,000
70,000
20/Sep
Received sum amounting 90,000 in cash from XYZ
Traders.
Cash Account
To XYZ Traders Account
To XYZ Traders Account
To XYZ Traders Account
90,000
90,000
01/Oct Repayment of bank loan.
Bank Loan Account
To Bank of Asia Account
To Bank of Asia Account
To Bank of Asia Account
50,000
50,000
25/Oct Purchases of 25,000 in cash.
Purchases Account
To Cash Account
To Cash Account
To Cash Account
25,000
25,000

05/Nov
Sold goods-items to the XYZ Traders amounting
47,000.
XYZ Traders Account
To Sales Account
To Sales Account
To Sales Account
47,000
47,000
15/Nov
Withdrawal of cash sum from bank amounting
15,000.
Cash Account
To Bank of Asia Account
To Bank of Asia Account
15,000
15,000
05/Dec
Received interest sum from bank amounting
5,000.
Bank of Asia Account
To Interest received Account
To Interest received Account
5,000
5,000
25/Dec
Bought goods items from the XYZ limited
amounting 75,000.
Purchases Account
To XYZ limited Account
To XYZ limited Account
75,000
75,000
05/Jan Cash Sales made of 100,000.
Cash Account
To Sales Account
To Sales Account
1,00,000
1,00,000
15/Jan Deposited in Bank of Asia, cash 35,000.
Bank of Asia Account
To Cash Account
35,000
35,000

To Cash Account
25/Feb Purchases made of 450,000 in cash.
Purchases Account
To Cash Account
To Cash Account
4,50,000
4,50,000
28/Feb Office rent of 50,000 for Feb month in cash.
Rent Account
To Cash Account
To Cash Account
50,000
50,000
28/Feb
Employees hired during Feb. month paid salary
through cheque of 30,000 and in cash amount of
30,000 for Feb 20x2.
Salary Account
To Bank of Asia Account
To Cash Account
To Bank of Asia Account
To Cash Account
60,000
30,000
30,0003
0,000
30,000
05/Mar Goods sold to the XYZ Traders of 675,000.
XYZ Traders Account
To Sales Account
6,75,000
6,75,000
31/Mar Payment of office rent through cheque of 50,000.
Rent Account
To Bank of Asia Account
50,000
50,000
31/Mar Payment of salary of 30000 in cash of March 20x2.
Salary Account
To Cash Account
30,000
30,000

Ledgers:
Freddy's Capital Account
Dates Details Amounts Dates Details Amounts
01/04/2
1 By Cash Account 6,00,000
01/Apr By Bank of Asia Account 7,00,000
01/Apr
By Furniture and
Fixtures /c 2,00,000
31/Mar To bal. c/d
15,00,00
0
Total
15,00,00
0 Total
15,00,00
0
Purchases Account
Dates Details Amounts Dates Details Amounts
25/Apr
To XYZ limited
Account 7,20,000
25/Jun To Cash Account 2,50,000
25/Aug
To XYZ limited
Account 50,000
25/Oct To Cash Account 25,000
25/Dec
To XYZ limited
Account 75,000
25/Feb To Cash Account 4,50,000
31/Mar By Trading Account 15,70,00

0
Total
15,70,00
0 Total
15,70,00
0
Sales Account
Dates Details Amounts Dates Details Amounts
05/May By Cash Account 9,50,000
05/Jul By XYZ Traders Account 4,75,000
05/Nov By XYZ Traders Account 47,000
05/Jan By Cash Account 1,00,000
05/Mar By XYZ Traders Account 6,75,000
31/Mar To Trading Account
22,47,00
0
Total
22,47,00
0 Total
22,47,00
0
Furniture and Fixtures Account
Dates Details Amounts Dates Details Amounts
01/Apr
To Freddy's Capital
Account 2,00,000
31/Mar By bal. c/d 2,00,000
Total 2,00,000 Total 2,00,000

Plant and Machinery Account
Dates Details Amounts Dates Details Amounts
01/Apr
To Bank of Asia
Account 2,50,000
31/Mar By bal. c/d 2,50,000
Total 2,50,000 Total 2,50,000
XYZ limited (Creditor) Account
Dates Details Amounts Dates Details Amounts
05/Jun To Cash Account 3,00,000
25/04/2
1 By Purchases Account 7,20,000
10/Sep
To Bank of Asia
Account 70,000 25/Aug By Purchases Account 50,000
25/Dec By Purchases Account 75,000
31/Mar To bal. c/d 4,75,000
Total 8,45,000 Total 8,45,000
XYZ Traders (Debtor) Account
Dates Details Amounts Dates Details Amounts
05/Jul To Sales Account 4,75,000 15/Jul By Bank of Asia Account 2,75,000
05/Nov To Sales Account 47,000 20/Sep By Cash Account 90,000
05/Mar To Sales Account 6,75,000

31/Mar By bal. c/d 8,32,000
Total
11,97,00
0 Total
11,97,00
0
Bank Loan Account
Dates Details Amounts Dates Details Amounts
01/Oct
To Bank of Asia
Account 50,000 05/Aug By Bank of Asia Account 2,00,000
31/Mar To bal. c/d 1,50,000
Total 2,00,000 Total 2,00,000
Salary Account
Date Particulars Amounts Date Particulars
Amount
s
28/Feb
To Bank of America
Account 30,000
28/Feb To Cash Account 30,000
31/Mar To Cash Account 30,000
31/Mar
By Profit & Loss
Account 90,000
Total 90,000 Total 90,000
Office Rent Account