Financial Accounting: General Journal, Worksheet, Statements

This financial accounting assignment solution presents a comprehensive overview of accounting principles and practices. It begins with a general journal entry detailing the opening balances of various accounts, including assets, liabilities, and owner's equity. A detailed worksheet follows, showcasing unadjusted and adjusted trial balances, along with income statement and balance sheet classifications. The income statement presents revenues from squash fees, gym fees, and membership fees, alongside various expenditures, culminating in the calculation of net profit. The balance sheet provides a snapshot of the company's assets, including current and non-current assets, and liabilities, categorized as current and non-current. It also includes the owner's capital, reflecting the financial position of the business. The solution incorporates detailed working notes (W.N.1 to W.N.8), explaining the calculations for prepaid expenses, depreciation, accrued interest, and outstanding wages, as well as the accounts receivable and payable control accounts. These working notes provide crucial insights into the underlying assumptions and calculations used in preparing the financial statements. The assignment demonstrates a strong understanding of accounting principles and the ability to prepare financial statements accurately and comprehensively.

FINANCIAL ACCOUNTING

Table of Contents
GENERAL JOURNAL ENTRY............................................................................................................................................................................... 1
WORKSHEET.......................................................................................................................................................................................................... 1
INCOME STATEMENT.......................................................................................................................................................................................... 2
BALANCE SHEET................................................................................................................................................................................................... 2
Working note................................................................................................................................................................................................... 2

GENERAL JOURNAL ENTRY
Opening entry Debit Credit
Stationery supplies a/c Dr. $ 454.00
Gym Equipment a/c Dr. $ 21,776.00
Motor Vehicle a/c Dr. $ 30,926.00
Accounts receivable a/c Dr. $ 19,506.00
Cash at bank a/c Dr. $ 17,534.00
To Bank loan a/c $ 29,083.00
To Accounts payable a/c $ 8,929.00
To capital a/c (Bal. fig.) $ 52,184.00
WORKSHEET
Account Unadjusted T/B Adjustments Adjusted T/B Income Statement Balance Sheet
DR CR DR CR DR CR DR CR DR CR
Cash At Bank $17,534.00 $17,611.00 $16,162.00 $18,983.00 $18,983.00
Account
Receivable $19,506.00 $4,476.00 $2,845.00 $21,137.00 $21,137.00
Motor Vehicle $30,926.00 $30,926.00 $30,926.00
Prepaid Rent $2,314.50 $2,314.50 $2,314.50
Prepaid
Insurance $1,970.67 $1,970.67 $1,970.67
Acc. Depn. -
Motor Vehicle $450.97 $450.97 $450.97
Account
Payable $8,929.00 $1,775.00 $2,057.00 $9,211.00 $9,211.00
Bank Loan (due
2022) $29,083.00 $29,083.00 $29,083.00
Accrued Interest
Expense $266.59 $266.59 $266.59
Accrued Staff
Wages $310.00 $310.00 $310.00
Capital $52,184.00 $3,385.00 $55,569.00 $55,569.00
Drawings $1,089.00 $1,089.00 $1,089.00
Staff Wages
Exp $4,650.00 $4,650.00 $4,650.00
Motor Vehicle
Exp $532.00 $532.00 $532.00
Dividends
Interest Exp $266.59 $266.59 $266.59
Accrued Interest
Revenue
Sundry Exp $393.00 $393.00 $393.00
Rent Expense $771.50 $771.50 $771.50
Cost of Goods
Sold
Insurance Exp $985.33 $985.33 $985.33
Depreciation
Exp $817.05 $817.05 $817.05
Advertising Exp $2,280.00 $2,280.00 $2,280.00
Gym Equipment $21,776.00 $21,776.00 $21,776.00
Stationery
Supplies $454.00 $719.00 $577.00 $596.00 $596.00
Acc. Depn. -
Gym Eqpt $366.08 $366.08 $366.08
Squash Fees
Rev $6,110.00 $6,110.00 $6,110.00
Gym Fees Rev $4,836.00 $4,836.00 $4,836.00
Membership
Rev $4,911.00 $4,911.00 $4,911.00
Bad and
Doubtful Debts
Expense
Equipment Hire
Exp $1,049.00 $1,049.00 $1,049.00
Stationery Exp $577.00 $577.00 $577.00
Subtotal $90,196.00 $90,196.00 $42,276.64 $42,276.64 $111,113.64 $111,113.64 $13,410.47 $15,857.00 $97,703.17 $95,256.64
Profit (Loss) $2,446.53 $2,446.53
1

Total $97,703.17 $97,703.17
INCOME STATEMENT
Muscle Up - Income Statement
Particulars Debit Credit
Revenues
Squash Fees Rev $6,110.00
Gym Fees Rev $4,836.00
Membership Rev $4,911.00
Total revenue $15,857.00
Less: Expenditures
Drawings $1,089.00
Staff Wages Exp $4,650.00
Motor Vehicle Exp $532.00
Interest Exp $266.59
Sundry Exp $393.00
Rent Expense $771.50
Insurance Exp $985.33
Depreciation Exp $817.05
Advertising Exp $2,280.00
Equipment Hire Exp $1,049.00
Stationery Exp $577.00
Total expenditures $13,410.47
Net profit(Loss) $2,446.53
BALANCE SHEET
Muscle Up - Balance Sheet
Particulars $ $
Current assets
Cash At Bank $18,983.00
Account Receivable $21,137.00
Prepaid Rent $2,314.50
Prepaid insurance $1,970.67
Stationery supplies-Stock $596.00
Total current assets $45,001.17
Non-current assets
Motor Vehicle $30,926.00
Acc. Depn. - Motor Vehicle $450.97 $30,475.03
Gym Equipment $21,776.00
Acc. Depn. - Gym Eqpt $366.08 $21,409.92
Non-current assets $51,884.95
Total assets $96,886.12
Current liabilities
Account Payable $9,211.00
Accrued Interest Expense $266.59
Accrued Staff Wages $310.00
Current liabilities $9,787.59
Non-current liabilities
Bank Loan (due 2022) $29,083.00
Non-current liabilities $29,083.00
Total liabilities $38,870.59
$58,015.53
Financed by
Owner's investment $55,569.00
Add: Jun month's profit $2,446.53
Owner's capital $58,015.53
Total liabilities with owner's capital $96,886.12
Working note
W.N.1
Prepaid insurance
General insurance $2,956.00
Time period (months) 3
Prepaid insurance ( 2 month) $1,970.67
2

W.N. 2
Prepaid rent
Rent $3,086.00
Time period (months) 4
Prepaid rent (3 months) $2,314.50
W.N. 3
Depreciation -Gym equipments
Cost $21,776.00
Scrap $4,204.00
useful life 4
Depreciation -12 month $4,393.00
1 month depreciation $366.08
W.N. 4
Depreciation-Motor vehicle
Cost $30,926.00
scrap $3,868.00
Useful life 5
Depreciation -12 month $5,411.60
1 month depreciation $450.97
W.N. 5
Accrued interest on bank loan
Bank loan 29083
Interest rate 11%
Interest accrued for one month (June) 266.59
W.N. 6
Outstanding wages (2 days)
weekly wages $1,085.00
Number of days in a week 7
daily wages $155.00
Outstanding wages $310.00
W.N.7
Accounts recievable control a/c
Date Particulars Debit Date Particulars Credit
01-Jun To balance b/d 19506 06-Jun By cash a/c 1527
02-Jun To Squash fees 1209 20-Jun By cash a/c 1318
06-Jun To Squash fees 1331 30-Jun By balance c/d 21137
07-Jun To Gym fees 852
29-Jun To Gym fees 1084
23982 23982
W.N. 8
Accounts payable control a/c
Date Particulars Debit Date Particulars Credit
3

17-Jun To cash a/c 1216 01-Jun By Balance b/d 8929
29-Jun To cash a/c 559 18-Jun By advertisement 720
30-Jun To balance c/d 9211 21-Jun By equipment hiring expense 573
27-Jun By equipment hiring expense 764
10986 10986
4