Financial Statement Project: Income Statement and Balance Sheet
VerifiedAdded on 2023/06/11
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Project
AI Summary
This accounting project demonstrates the process of recording journal entries in T-accounts, balancing accounts, and preparing a trial balance. It includes the creation of an income statement for the period ended September 30, 2021, and a statement of financial position as of the same date. Furthermore, the project involves calculating key financial ratios such as net profit margin, gross profit margin, current ratio, and acid test ratio. Finally, it analyzes Paul's financial performance by comparing these ratios with those of its competitors, highlighting areas for improvement in profitability, cost management, and asset utilization. This comprehensive analysis provides a detailed overview of the company's financial health and strategic opportunities.

Resit project A2
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TABLE OF CONTENTS
PART A...........................................................................................................................................1
a) Recording journal entries in T account...................................................................................1
b) Balancing the account and bringing down an opening balance .............................................2
c) Trial balance as at 30th September 2021................................................................................9
d) Preparing income Statement for the period ended 30th September 2021 ...........................10
e) Formulating statement of Financial Position as at 30th September 2021.............................11
PART B..........................................................................................................................................12
Calculating ratios .....................................................................................................................12
Analyzing the Paul's performance by comparing with competitors ........................................14
REFERENCES..............................................................................................................................16
PART A...........................................................................................................................................1
a) Recording journal entries in T account...................................................................................1
b) Balancing the account and bringing down an opening balance .............................................2
c) Trial balance as at 30th September 2021................................................................................9
d) Preparing income Statement for the period ended 30th September 2021 ...........................10
e) Formulating statement of Financial Position as at 30th September 2021.............................11
PART B..........................................................................................................................................12
Calculating ratios .....................................................................................................................12
Analyzing the Paul's performance by comparing with competitors ........................................14
REFERENCES..............................................................................................................................16

PART A
a) Recording journal entries in T account
Date Particulars L.F Debit Credit
01/09/21 Bank A/c Dr. 24000
Cash A/c Dr. 8400
Computer A/c Dr. 1000
To capital A/c 33400
(Being capital invested in the
business)
02/09/21 Purchase A/c Dr. 900
To David A/c 900
(Being furniture purchased on credit)
03/09/21 High-speed Computer A/c Dr. 2000
To Bank A/c 2000
(Being high-speed computer
purchased by paying via cheque
05/09/21 Bank A/c Dr. 500
To Sales A/c 500
( being good sold)
06/09/21 Purchase A/c Dr. 400
To Cash A/c 400
( Being good purchased on cash)
1
a) Recording journal entries in T account
Date Particulars L.F Debit Credit
01/09/21 Bank A/c Dr. 24000
Cash A/c Dr. 8400
Computer A/c Dr. 1000
To capital A/c 33400
(Being capital invested in the
business)
02/09/21 Purchase A/c Dr. 900
To David A/c 900
(Being furniture purchased on credit)
03/09/21 High-speed Computer A/c Dr. 2000
To Bank A/c 2000
(Being high-speed computer
purchased by paying via cheque
05/09/21 Bank A/c Dr. 500
To Sales A/c 500
( being good sold)
06/09/21 Purchase A/c Dr. 400
To Cash A/c 400
( Being good purchased on cash)
1
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10/09/21 Rent A/c Dr. 600
To Bank A/c 600
( Being rent paid by cheque)
12/09/21 Computer repairing A/c Dr. 100
To Cash A/c 100
( Being repairs for computer paid by
cash)
18/09/21 David A/c Dr. 100
TO purchase Return A/c 100
( Being goods has been returned to
David)
21/09/21 Bank A/c Dr. 300
To Rent Received A/c 300
(being rent received by cheque)
23/09/22 Joseph A/c Dr. 400
To sales A/c 400
( being good sold on credit)
23/09/22 Cash A/c Dr. 1500
To sales A/c 1500
( being good sold on cash )
24/09/22 Car A/c Dr. 1000
To Bank A/c 1000
( Being car purchased by cheque)
2
To Bank A/c 600
( Being rent paid by cheque)
12/09/21 Computer repairing A/c Dr. 100
To Cash A/c 100
( Being repairs for computer paid by
cash)
18/09/21 David A/c Dr. 100
TO purchase Return A/c 100
( Being goods has been returned to
David)
21/09/21 Bank A/c Dr. 300
To Rent Received A/c 300
(being rent received by cheque)
23/09/22 Joseph A/c Dr. 400
To sales A/c 400
( being good sold on credit)
23/09/22 Cash A/c Dr. 1500
To sales A/c 1500
( being good sold on cash )
24/09/22 Car A/c Dr. 1000
To Bank A/c 1000
( Being car purchased by cheque)
2
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30/09/21 Wages A/c Dr. 700
To Cash A/c 700
(Being wages paid by cash)
30/09/21 Withdrawal A/c Dr. 450
To Cash A/c 450
(being owner has withdrawn cash)
Total 41900 41900
b) Balancing the account and bringing down an opening balance
Bank A/c
Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
01/09/21
To capital
A/c 24000 03/09/21
By High-
speed
Computer
A/c 2000
05/09/21
To Sales
A/c 500 10/09/21
By Rent
A/c 600
10/09/21
To Rent
A/c 300 24/09/22
By Car
A/c 1000
31/09/22
By
Balance
c/d 21200
Total 24800 24800
3
To Cash A/c 700
(Being wages paid by cash)
30/09/21 Withdrawal A/c Dr. 450
To Cash A/c 450
(being owner has withdrawn cash)
Total 41900 41900
b) Balancing the account and bringing down an opening balance
Bank A/c
Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
01/09/21
To capital
A/c 24000 03/09/21
By High-
speed
Computer
A/c 2000
05/09/21
To Sales
A/c 500 10/09/21
By Rent
A/c 600
10/09/21
To Rent
A/c 300 24/09/22
By Car
A/c 1000
31/09/22
By
Balance
c/d 21200
Total 24800 24800
3

01/11/21
To opening
balance b/d 21200
Cash A/c
Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
01/09/21
To capital
A/c 8400 06/09/21
By
Purchase
A/c 400
23/09/22
To Sales
A/c 1500 12/09/21
Computer
repairing
A/c 100
30/09/21
By Wages
A/c 700
30/09/21
Withdrawa
l A/c
Dr. 450
30/09/22
By
Balance
c/d 8250
Total 9900 Total 9900
01/10/21
To opening
balance b/d 8250
Capital A/c
Dr. Cr.
Date Particular J.F Amount £ Date Particular J.F Amount £
4
To opening
balance b/d 21200
Cash A/c
Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
01/09/21
To capital
A/c 8400 06/09/21
By
Purchase
A/c 400
23/09/22
To Sales
A/c 1500 12/09/21
Computer
repairing
A/c 100
30/09/21
By Wages
A/c 700
30/09/21
Withdrawa
l A/c
Dr. 450
30/09/22
By
Balance
c/d 8250
Total 9900 Total 9900
01/10/21
To opening
balance b/d 8250
Capital A/c
Dr. Cr.
Date Particular J.F Amount £ Date Particular J.F Amount £
4
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s s
30/09/22
To
Balance
c/d 33400 01/09/21 Bank A/c 24000
01/09/21 Cash A/c 8400
01/09/21
Computer
A/c 1000
Total 33400 Total 33400
01/10/21
By
opening
balance b/d 33400
Computer A/c
Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
01/09/21
To capital
A/c 1000 30/09/22
By
Balance
c/d 1000
Total 1000 Total 1000
01/10/21
To opening
balance b/d 1000
Purchase A/c
5
30/09/22
To
Balance
c/d 33400 01/09/21 Bank A/c 24000
01/09/21 Cash A/c 8400
01/09/21
Computer
A/c 1000
Total 33400 Total 33400
01/10/21
By
opening
balance b/d 33400
Computer A/c
Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
01/09/21
To capital
A/c 1000 30/09/22
By
Balance
c/d 1000
Total 1000 Total 1000
01/10/21
To opening
balance b/d 1000
Purchase A/c
5
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Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
02/09/21
To David
A/c 900 30/09/22
By
Balance
c/d 1300
06/09/21
To Cash
A/c 400
Total 1300 Total 1300
30/09/22
To
Balance
c/d 1300
David A/c
Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
18/09/21
TO
purchase
Return A/c 100 02/09/21
Purchase
A/c 900
30/09/22
To
Balance
c/d 800
Total 900 Total 900
01/10/21
By
opening
balance b/d 800
6
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
02/09/21
To David
A/c 900 30/09/22
By
Balance
c/d 1300
06/09/21
To Cash
A/c 400
Total 1300 Total 1300
30/09/22
To
Balance
c/d 1300
David A/c
Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
18/09/21
TO
purchase
Return A/c 100 02/09/21
Purchase
A/c 900
30/09/22
To
Balance
c/d 800
Total 900 Total 900
01/10/21
By
opening
balance b/d 800
6

Sales A/c
Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
30/09/22
To
Balance
c/d 900 05/09/21
By Bank
A/c 500
23/09/22 Joseph A/c 400
Total 900 Total 900
01/10/21
By
opening
balance b/d 900
High-speed Computer A/c Dr.
Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
03/09/21
To Bank
A/c 2000 30/09/22
By
Balance
c/d 2000
Total 2000 2000
30/09/22
To
Balance
c/d 2000
7
Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
30/09/22
To
Balance
c/d 900 05/09/21
By Bank
A/c 500
23/09/22 Joseph A/c 400
Total 900 Total 900
01/10/21
By
opening
balance b/d 900
High-speed Computer A/c Dr.
Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
03/09/21
To Bank
A/c 2000 30/09/22
By
Balance
c/d 2000
Total 2000 2000
30/09/22
To
Balance
c/d 2000
7
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Rent A/c
Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
10/09/21
To Bank
A/c 600 30/09/22
By
Balance
c/d 600
Total 600 Total 600
30/09/22
To
Balance
c/d 600
Rent Received A/c
Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
30/09/22
To
Balance
c/d
300
21/09/21 Bank A/c
300
Total 300 300
01/10/21 By
opening
300
8
Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
10/09/21
To Bank
A/c 600 30/09/22
By
Balance
c/d 600
Total 600 Total 600
30/09/22
To
Balance
c/d 600
Rent Received A/c
Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
30/09/22
To
Balance
c/d
300
21/09/21 Bank A/c
300
Total 300 300
01/10/21 By
opening
300
8
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balance b/d
Car A/c
Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
24/09/22
To Bank
A/c 1000 30/09/22
By
Balance
c/d 1000
Total 1000 Total 1000
30/09/22
To
Balance
c/d 1000
Computer repairing A/c
Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
12/09/21
To Cash
A/c 100 30/09/22
By
Balance
c/d 100
Total 100 Total 100
30/09/22 To 100
9
Car A/c
Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
24/09/22
To Bank
A/c 1000 30/09/22
By
Balance
c/d 1000
Total 1000 Total 1000
30/09/22
To
Balance
c/d 1000
Computer repairing A/c
Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
12/09/21
To Cash
A/c 100 30/09/22
By
Balance
c/d 100
Total 100 Total 100
30/09/22 To 100
9

Balance
c/d
Purchase Return A/c
Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
30/09/22
To
Balance
c/d 100 18/09/21
By David
A/c 100
Total 100 Total 100
01/10/21
By
opening
balance b/d 100
Joseph A/c
Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
23/09/22
To sales
A/c 400 30/09/22
By
Balance
c/d 400
Total 400 Total 400
30/09/22 To
Balance
400
10
c/d
Purchase Return A/c
Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
30/09/22
To
Balance
c/d 100 18/09/21
By David
A/c 100
Total 100 Total 100
01/10/21
By
opening
balance b/d 100
Joseph A/c
Dr. Cr.
Date
Particular
s J.F Amount £ Date
Particular
s J.F Amount £
23/09/22
To sales
A/c 400 30/09/22
By
Balance
c/d 400
Total 400 Total 400
30/09/22 To
Balance
400
10
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