Accrual-Based Accounting: MicroSystems Financial Statements, July 2021

This assignment focuses on preparing financial statements for MicroSystems, a retailer of electronics, for the month of July 2021. The task involves recording various transactions using journal entries, applying accrual-based accounting principles as opposed to cash-based, and utilizing the FIFO (First-I...Read More

Assignment Financial
Statements

Table of Contents
MAIN BODY..................................................................................................................................3
Journal Entries.............................................................................................................................3

MAIN BODY
Journal Entries
Journal Entries
Date Particulars L.
F
Debit
($)
Credit
($)
2021
1-Jul Bank A/C Dr 60000
To Bank Loan A/C
(Being loan taken from bank) 60000
1-Jul Insurance Expense A/C Dr (4200/12) 350
Prepaid Insurance A/C Dr ((4200/12) *11)
3850
To Bank A/C
(being insurance expense paid) 4200
1-Jul Motor Vehicle A/C 24000
To Capital A/c
(Being Motor Vehicle Purchased) 24000
1-Jul Prepaid Rent A/C Dr 30000
To Bank A/C
(Being Rent paid for next six months) 30000
1-Jul Fixtures and Fittings A/C Dr 12000
To Bank A/C
(Being Fixtures and Fittings purchased) 12000
2-Jul Advertising A/C Dr 2800
To bank A/C
(Being amount paid for advertising) 2800
2-Jul Purchases A/c Dr (20*890 + 20*360) 25000
To Accounts Payables A/C
(Being goods purchased on credit) 25000
3-Jul Bank A/C Dr 12950
To Sales A/C (7*1850)
(Being goods sold) 12950
4-Jul Accounts Receivable A/C Dr 6360
To Sales A/C (12*530)
(being goods sold on credit) 6360
6-Jul Bank A/C Dr 120
To Training Expense A/C
(Being training seminar ticket amount paid) 120
7-Jul Purchases A/C Dr (140*10) 1400
To Cash a/C
(Being goods purchased for cash) 1400
10-Jul Purchases A/C Dr (20*380) 7600

To Accounts Payable A/C
(Beings goods purchased on credit) 7600
14-Jul Cash A/C Dr 4100
To Accounts Receivables A/C
(Being cash received from customers) 4100
15-Jul Cash A/C Dr (14*530) 7420
To Sales A/C
(Being goods sold for cash) 7420
18-Jul Drawings A/C Dr 4000
To Cash A/C
(Being drawings made by David) 4000
21-Jul Maintenance & Repairs Expense A/C Dr 230
To Cash A/C
(Being shop fixture repaired) 230
22-Jul Accounts Receivable A/C Dr (10*1880 + 6*495) 21770
To sales A/C
(Being goods sold for cash) 21770
23-Jul Wages Expense A/c Dr 950
Prepaid wages 950
To Cash A/C
(Being wages paid to Carly) 1900
24-Jul Purchases A'/c Dr (20*900 +10*140) 19400
To Accounts Payables A/C
(Being goods purchased on credit) 19400
25-Jul Drawings A/C Dr 3200
To Bank A/C
(Being payment made for David’s credit card) 3200
26-Jul Bank A/C Dr 30000
To Bank Overdraft A/C
(Being O/D limit given by bank) 30000
27-Jul Accounts Payable A/C Dr 25000
To Bank A/C
(Being payment made to suppliers) 25000
28-Jul Cleaning Expense A/C Dr 140
To Cash A/C
(Being office cleaned) 140
29-Jul Accounts Receivable A/C (10*530 + 10*495) 10250
To Sales A/C
(Being goods sold on credit) 10250
30-Jul Laptop A/C Dr 890
To Purchases A/C
(Being laptop taken to be used in office) 890
30-Jul Depreciation A/C Dr 399
To Motor Vehicle A/C 250
To Fixtures and Fittings A/C Dr 125

To Laptop A/C Dr
(Being depreciation charged) 24
30-Jul Telecommunications Expense A/C Dr 850
To Outstanding Telecommunications Expense
(Being Telecommunications Expense
outstanding) 850
30-Jul Electricity Expenses A/C Dr 1900
To Outstanding Electricity Expenses A/C
(Being Electricity Expenses Outstanding) 1900
30-Jul Bad Debts A/C Dr 1714
To Accounts Receivables A/C
(Being debtors recorded as bad debts) 1714
319593 319593
Perpetual Inventory Using FIFO Method
Date Purchases Sales Balance
2-Jul
20 Units *
$890 17800
3-Jul 7 units * $890
14 Units *
$890
22-Jul
10 units *
$890 4 Units * $890
24-Jul 20 Units *
$900
4 Units * $890
20 Units *
$900
30-Jul 1 unit * 890
3 Units * $890
20 Units *
$900
Total 35800 16020 20670

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