Accounting and Finance Sample Assignment
Introduction
Basic principle of an accounting systems are preparation of Journal, ledger and trial balance. Posting of a financial event of a company is known as journal entry. In this study journal, ledger and trial balance of Smart IT Company has to be prepared. This preparation is based on financial events that have been taken place in the financial year 2017. An explanation of journal entry has to be providing on this basis.
Findings and analysis
In the month of May of 2017, some events have been occurred in Smart IT Company. A journal entry has to prepare of the individual event. Journal entries have been prepared in order to keep record of financial events.
Preparation of journal entries
Following is a presentation of Journal Entry based on financial; event of Smart IT company.
In the books of Smart IT
Journal entries
As on 30.2017
|
Date |
Particulars |
Amount ($)(Debit) |
Amount ($)(credit) |
|
May 1 |
Cash Account To Capital Account [Being Smart IT Company has started 12 more new websites and that has amounted to $9000 |
9000 |
9000 |
|
Explanation: |
Smart ITC company has started 12 more websites and $9000 has been charged from the client] | ||
|
May 2 |
Bank Account To Purchase Account [Being Smart It company purchase Supplies] |
140 |
140 |
|
Explanation |
Being company has invested some amount of cash for business purchase | ||
|
May 3 |
Cash account To, Furniture Account Transportation Cost Account [Company has purchased furniture for business purpose and an addition amount of transportation cost of $ 150 has to pay on that.] |
1350 |
1200 150 |
|
Explanation: |
Company has purchased furniture and an additional amount of transportation cost has been paid on that | ||
|
May 4 |
Advertising Account To Australia Daily [Being an invoice of $3500 has been received from Australia Daily for advertisement purpose] |
3500 |
3500 |
|
Explanation: |
Company has spend $3500 for advertisement purpose to Australian Daily | ||
|
May 5 |
ICT Mart Account (10043+234) To Bank Account [Being the company has purchased 83 keyboards for $121 and nine flash drivers for $ 26 each, the transaction has been done on account] |
10377 |
10377 |
|
Explanation: |
For business purpose company has purchased keyboard and flashlight from ICT Mart | ||
|
May 6 |
Sales To Cash account [being Smart IT company has been sold 98 Keyboards of $14700 and 100 flashlight for $3000](computation refers to Spreadsheet calculation) |
1740600 |
1740600 |
|
Explanation |
Company has sold out sold out 98 keyboards and 100 flashlights | ||
|
May 8 |
Accounts Receivable Account To Cash Account [Being Smart It has been collected $9000 as accounts receivable] |
9000 |
9000 |
|
Explanation |
Company has collected a cash of $9000 on accounts receivable | ||
|
May 10 |
Cash To Rent Account Other Expenses Account [Being the company has been paid rent of $500 and other expenses of $105](Computation refers to spreadsheet calculation] |
655 |
500 105 |
|
Explanation |
Rent and other expenses has been paid by the company | ||
|
May 12 |
Cash Account To Accounts Payable Account [Being accounts payable has been made by the company] |
2100 |
2100 |
|
Explanation | |||
|
May 14 |
Sales Account To Cash Account [Being company has sold 250 secures for $14](Calculation refers to spreadsheet] |
3500 |
3500 |
|
Explanation |
Sales of $3500 has been take place | ||
|
May 17 |
Cash To Salaries account [Being salary of $750 has been paid to Chris, out of which net pay of to PAYGW is $150] |
750 |
750 |
|
Explanation |
Company has paid salary to Chris | ||
|
May 19 |
Cash To Salaries Account [Being due salary of $100 has been paid of in this month] |
100 |
100 |
|
Explanation |
Company has paid salary of previous month | ||
|
May 20 |
Cash To Salary Account [Being salary of $2800 has been paid to Lemon and Nancy for their work, PAYGW net of is $590 |
2800 |
2800 |
|
Explanation |
Company has paid salary to Lemon and Nancy | ||
|
May 22 |
Cash Account To Bank Loan Account Interest Payable [Being Loan amount of $3000 for the month of April and Interest amount of $45 for the month of April has been paid in May][Computation is based on spreadsheet calculation] |
3045 |
3000 45 |
|
Explanation |
Company has paid their loan and interest | ||
|
May 25 |
Cash To Australia Daily account [Being An invoice amount of $3500, which was due of Australia Daily for advertisement purpose that has been paid of] |
3500 |
3500 |
|
Explanation |
Payment has been done to Australian Daily | ||
|
May 28 |
ITC Mart Account Discount Account To Cash account [Being due payment of ITC Mart for purchasing keyboard and flash Drive on 5 may has been paid off in the current month][based on spreadsheet calculation] |
10147 230 |
10377 |
|
Explanation |
Discount of $230 has been allowed to ITC mart for an early payment | ||
Preparation of ledger
Following is a preparation of Ledger Accounts based on the above recorded transactions
Capital Account
|
Date |
Particulars |
Amount($)(Debit) |
Date |
Particulars |
Amount($) (Credit) |
|
May 1 |
By Cash Account |
9000 |
Cash Account
|
May |
Particulars |
Amount($)(Debit) |
May |
Particulars |
Amount($) (Credit) |
|
1 3 10 17,19,20 12 22 22 25 |
To Capital Account To Furniture Account To Rent Account To Salaries Account To Accounts Payable To Bank Loan To Interest Payable To Australia Daily account Total |
9000 2100 655 3650 3000 45 1740177 23300 1763477 |
6 8 14 28 |
By Sales Account By Accounts Receivable Sales Account By ITC Mart Account By Discount Account Total |
1740600 9000 3500 10147 230 1763477 |
Bank Account
|
Date |
Particulars |
Amount($)(Debit) |
Date |
Particulars |
Amount($) (Credit) |
|
May 2 |
To Purchase Account To balance b/d Total |
140 10237 10377 |
May 5 |
By ICT Mart Account Total |
10377 10377 |
Purchase Account
|
Date |
Particulars |
Amount($)(Debit) |
Date |
Particulars |
Amount($) (Credit) |
|
To balance b/d Total |
140 140 |
May 2 |
By Bank Account Total |
140 140 |
Furniture Account
|
Date |
Particulars |
Amount($)(Debit) |
Date |
Particulars |
Date |
Amount($)(Credit |
|
May 3 |
To balance b/d Total |
1200 1200 |
By Cash Account By Total |
1200 1200 |
Transportation cost Account
|
Date |
Particulars |
Amount($)(Debit) |
Date |
Particulars |
Amount($) (Credit) |
|
May 1 |
To balance b/d Total |
150 150 |
By Cash Account Total |
150 150 |
Advertising Account
|
Date |
Particulars |
Amount($)(Debit) |
Date |
Particulars |
Amount ($) (Credit) |
|
May 4 |
To Australian Daily Account Total |
3500 3500 |
By balance b/d Total |
3500 3500 |
Australia Day Account
|
Date |
Particulars |
Amount($)(Debit) |
Date |
Particulars |
Amount($) (Credit) |
|
May 25 |
To cash Account |
3500 |
May 4 |
By advertisement Account |
3500 |
|
Total |
3500 |
Total |
3500 |
ICT Mart Account
|
Date |
Particulars |
Amount($)(Debit) |
Date |
Particulars |
Amount($) (Credit) |
|
May 5 |
To bank Account |
10377 |
May 28 |
By Cash Account By balance b/d |
10147 230 |
|
Total |
10377 |
Total |
10377 |
Sales Account
|
Date |
Particulars |
Amount($)(Debit) |
Date |
Particulars |
Amount($) (Credit) |
|
May 6 |
To balance b/d |
10377 |
May 14 |
By cash Account cash Account by cash Account |
3500 6877 |
|
Total |
10377 |
Total |
10377 |
Accounts Receivable Account
|
Date |
Particulars |
Amount($)(Debit) |
Date |
Particulars |
Amount($) (Credit) |
|
May 8 |
To Cash Account |
9000 |
By balance b/d |
9000 | |
|
Total |
9000 |
Total |
9000 |
Rent Account
|
Date |
Particulars |
Amount($)(Debit) |
Date |
Particulars |
Amount($) (Credit) |
|
May 10 |
To cash |
500 |
By balance b/d |
500 | |
|
Total |
500 |
Total |
500 |
Accounts Payable
|
Date |
Particulars |
Amount($)(Debit) |
Date |
Particulars |
Amount($) (Credit) |
|
To balance b/d |
2100 |
May 12 |
By Cash Account |
2100 | |
|
Total |
2100 |
Salary Account
|
Date |
Particulars |
Amount($)(Debit) |
Date |
Particulars |
Amount($) (Credit) |
|
May 17 May 19 May 20 |
To cash Account To cash Account To cash Account |
750 100 2800 |
By balance b/d |
3650 | |
|
Total |
3650 |
Total |
3650 |
Discount Account
|
Date |
Particulars |
Amount($)(Debit) |
Date |
Particulars |
Amount($) (Credit) |
|
To balance b/d |
230 |
May 28 |
By Cash Account |
230 | |
|
Total |
230 |
Total |
230 |
Other Expenses
|
Date |
Particulars |
Amount($)(Debit) |
Date |
Particulars |
Amount($) (Credit) |
|
May 10 |
To Cash Account |
105 |
By balance b/d |
105 | |
|
Total |
105 |
Total |
105 |
Bank Loan Account
|
Date |
Particulars |
Amount($)(Debit) |
Date |
Particulars |
Amount($) (Credit) |
|
May 22 |
To cash Account |
3000 |
By balance b/d |
3000 | |
|
Total |
3000 |
Total |
3000 |
Interest
|
Date |
Particulars |
Amount($)(Debit) |
Date |
Particulars |
Amount($) (Credit) |
|
May 22 |
To cash Account |
45 |
By balance b/d |
45 | |
|
Total |
45 |
Total |
45 |
Preparation of trial balance 300
A Trial balance has been presented below based on the journal entry and trial balance.
SMART IT
Trial Balance
As on May 30, 2017
|
Asset |
Amount |
Liabilities |
Amount |
|
Current Account |
Current | ||
|
Cash at bank |
10377 |
Accounts payable |
2100 |
|
Accounts Receivable |
9000 |
Salaries payable |
3650 |
|
Suppliers inventory |
10377 |
interest payable |
45 |
|
Property plant and equipment |
Non current | ||
|
Furniture |
1200 |
Bank Loan |
3000 |
|
Owners equity | |||
|
Noncurrent Asset |
Capital Stock |
22159 | |
|
Investment | |||
|
Total Asset |
30954 |
Total Liabilities |
30954 |
Conclusion
A brief presentation of Journal entry, ledger account and trial balance has been done above. From their presentation it can be concluded that the company is in a profitable condition and sale of the company is increasing. The transactions of May has been recorded in the journal entry and based on those transactions ledger accounts has been made. Finally a trial balance has been presented.
Bibliography
Gitman, L.J., Juchau, R. and Flanagan, J., 2015. Principles of managerial finance. Pearson Higher Education AU.
Nash, P., 2018. Balance Sheet Substantiation and Analysis. Effective Product Control‐Controlling for Trading Desks, First Edition, pp.243-255.
Shoup, C., 2017. Public finance. Routledge.
Gurskaya, M., Kuter, M. and Andreenkova, A., 2017, December. The Analysis of the Final “Debtors” Section Page Preparation in the Trial Balance of Giovanni Farolfi’s Company Branch Office. In International Conference on Information Technology Science (pp. 185-194). Springer, Cham.
