Accounting Project: Creating Financial Statements from Transactions

This accounting project demonstrates the process of recording and summarizing financial transactions to generate key financial statements. The project begins with creating five business transactions, including investments, asset purchases, and sales, along with corresponding journal entries to record each transaction. These entries are then posted to a general ledger to track the balances of various accounts. A trial balance is prepared to ensure the equality of debits and credits. Finally, the project culminates in the creation of an income statement to determine profitability and a balance sheet to reflect the company's assets, liabilities, and equity. The project showcases the fundamental steps in the accounting cycle, providing a practical application of accounting principles.

Running head: ACCOUNTING ASSIGNEMENT
ACCOUNTING ASSIGNMENT
Name of the Student
Name of the University
Author Note:

1ACCOUNTING ASSIGNMENT
Table of Contents
Journal Entries............................................................................................................................2
General Ledger...........................................................................................................................3
Trail Balance..............................................................................................................................6
Income Statement.......................................................................................................................7
Balance Sheet.............................................................................................................................7

2ACCOUNTING ASSIGNMENT
The main transaction in the business depends upon the nature of the business.
However, some important transaction that are almost common in every business:
1) Invested capital in business with cash of $2000000
2) Purchased Land for $1000000 and Machinery for $250000 for cash
3) Purchased Raw Material on credit $100000
4) Sold Goods for cash worth $500000
5) Paid to creditors $100000
Journal Entries
DR CR
Bank A/c $2000000
Capital A/c $2000000
Capital invested in the bank account of the company.
Land $1000000
Machinery $250000
Bank $1250000
Purchased asset for cash
Purchase $100000
Accounts Payable $100000
Raw materials purchased on credit
Bank A/c $2000000

3ACCOUNTING ASSIGNMENT
Capital A/c $2000000
Capital invested in the bank account of the company.
Bank $500000
Sales $500000
Goods sold for cash
Accounts Payable $100000
Bank $100000
Paid to the creditors of the raw material
General Ledger
Bank A/c
Capital
Sales
Amount ($)
2000000
500000
2500000
Accounts Payable
Land
Machine
Closing balance
Amount ($)
100000
1000000
250000
1150000
2500000
Raw Material

4ACCOUNTING ASSIGNMENT
Raw material
Amount ($)
100000
100000
Closing Balance
Amount ($)
100000
100000
Land
Bank
Amount ($)
1000000
Closing Balance
Amount ($)
1000000
Machinery
Bank
Amount ($)
250000
Closing Balance
Amount ($)
250000

5ACCOUNTING ASSIGNMENT
Capital
Bank
Amount ($)
2000000
Closing balance
Amount ($)
2000000
Sales
Balance
Amount ($)
500000
Bank
Amount ($)
500000
Accounts Payable
Purchases
Amount ($)
100000 Bank
Amount ($)
100000

6ACCOUNTING ASSIGNMENT
Trail Balance
DR CR
Particulars Amount ($) Amount ($)
Sales 500000
Purchases 100000
Capital 2000000
Bank 1150000
Land 1000000
Machine 250000
Total 2500000 2500000

7ACCOUNTING ASSIGNMENT
Income Statement
Particulars Amount ($)
Sales 500000
Purchases (100000)
Gross Profit 400000
Balance Sheet
Asset Amount ($)
Non-Current Asset
Land 1000000
Machine 250000
Total Non-Current Asset 1250000
Current Asset
Bank 1150000
Total Asset 2400000
Equity and Liability Amount ($)
Capital 2000000
Add: Net profit 400000
Total equity 240000