Advanced financial accounting - Lecture 4: Single entry. The main topics covered in this chapter include: company name balance sheet; fixed assets; owner’s equity and liabilities; company name statement of affairs; creditor’s account; debtor’s account; company name income statement;... Please refer to the lecture for details!
Advanced Financial Accounting FIN611 Mian Ahmad Farhan Lecture4 Single Entry Company Name Balance Sheet As on 31st December Assets Fixed Assets Investment Current Assets Stock Debtors Prepaid expenses Accrued income Bank balance Cash in hand Total Assets xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx Fixed Assets Opening balance Add During the year additions Less Disposal of an asset Less Depreciation Closing balance xxx xxx xxx xxx xxx xxx Question Opening Balance Rs. 1,000 Furniture purchased Rs. 500 (Use six months ) Depreciation charged by 10% per annum Find out amount of depreciation and Closing balance of furniture Solution Depreciation: Opening balance (1000 x 10%) = 100 Furniture purchased (500 x 10% x 6/12) = 25 125 Closing Balance: Furniture Less Depreciation 1,500 125 1,375 Investment Opening Investment Add During the year purchased Less Dispose off Closing balance xxx xxx xxx xxx Company Name Balance Sheet As on 31st December Owner’s Equity & Liabilities Owner’s equity Loan Current Liabilities Creditors Accrued expenses Unearned income Bank O/D Total Liabilities xxx xxx xxx xxx xxx xxx xxx xxx Owner’s Equity Opening balance Add Fresh capital Add Net profit Less Drawings Cash xxx Goods xxx Closing balance xxx Statement of affairs xxx Cash book receipt side xxx Income statement Cash book payment side Year end adjustment xxx xxx Loan Opening balance xxx Add Fresh loan obtained during the year xxx Less Payment of Loan (xxx) Closing Balance xxx Statement of affairs Cash book receipt side Cash book payment side Company Name Statement of Affairs As on 31st December Assets Fixtures Current Assets Stock Debtors Bank Cash Total Assets Less Current liabilities Creditors Net Assets / Owner’s Equity 800 1,590 1,100 1,130 80 3,900 4,700 400 4,300 Question Cash Book Receipts Opening balance Receipts from debtors Cash sales Cash Bank Payments 80 500 1,130 Supplier (Payment 9,500 to creditors) Rent General expenses Drawings Closing balance 580 10,63 Cash Bank 7,200 50 520 10 580 200 180 3,050 10,63 Question Creditor’s Account Cash paid to creditors Closing balance 7,200 650 7,850 Opening balance Credit Purchase 400 7,450 7,850 Question Debtor’s Account Opening balance Credit sales 1,100 9,720 10,820 Cash received from debtors Closing balance 9,500 1,320 10,820 Year End Adjustments Closing stock Rs. 1,700 Rent owing Rs. 50 Depreciation on fixture, 10% per annum Company Name Income statement As on 31st December 2007 Sales Cash sales Credit sales 9,720 500 10,220 Less Cost of goods sold Opening stock Add purchases Less closing stock 1,590 7,450 1,700 Gross profit Less Operating expenses Rent General expenses Depreciation on fixture (800 x 10%) 300 180 80 Net profit 7,340 2,880 560 2,320 Working of Rent Rent Cash Cheque Add Owing 50 200 250 50 300 Company Name Balance Sheet As on 31st December 2007 Assets Amount Owner’s Equity & Liabilities Fixed Assets Fixtures 800 Less dep. 80 Amount Owner’s equity 4,300 Add NP 2,320 Less drawings 520 720 6,100 Liabilities Current Assets Closing stock Debtors Bank Cash 1,700 1,320 3,050 10 6,800 Creditors 650 Rent Due 50 700 6,800