Mr. A started the business on 1st April 2013.

The financial transactions for a particular year are given below;

Based on these financial transactions, you have to pass the journal entries, prepare a ledger account, prepare
Trial Balance and Final Accounts.
Transaction
Mr. A started the profession as a consultant with a capital of Rs.200000
He purchased laptop from X Ltd. on credit for Rs. 25000
He paid cash to X Ltd. Rs. 25,000
He rendered services to Good Ltd. on credit for Rs. 300000
He received cheque from Good Ltd. Rs. 250000
He further purchased Car from Maruti Dealer on credit basis Rs. 250000
He paid cheque to Maruti Dealer Rs.250000
He further rendered services to Y Ltd. for Rs.100000
He received cheque from Y Ltd. Rs. 100000
He spent on petrol in cash for Rs. 20000 , telephone expenses Rs. 2500 and staff salary Rs. 25000

Account 1
Cash / Bank
Laptop
X Ltd.
Good Ltd.
Cash / Bank
Car
Maruti Dealer
Y Ltd.
Cash / Bank
Petrol
Telephone Exp
Salary

Element
Asset
Asset
Liability
Asset
Asset
Asset
Liability
Asset
Asset
Expenses
Expenses
Expenses

Type
Real
Real
Personal
Personal
Real
Real
Personal
Personal
Real
Nominal
Nominal
Nominal

Account 2
Mr. A's Capital
X Ltd.
Cash / Bank
Income
Good Ltd.
Maruti Dealer
Cash / Bank
Income
Y Ltd.
Cash / Bank
Cash / Bank
Cash / Bank

Element
Liability
Liability
Asset
Income
Asset
Liability
Asset
Income
Asset
Asset
Asset
Asset

Type
Personal
Personal
Real
Nominal
Personal
Personal
Real
Nominal
Personal
Real
Real
Real

Amount
200000
25000
25000
300000
250000
250000
250000
100000
100000
20000
2500
25000

STEP 1
Journal Entries in the books of Mr. A for the year 2013-2014
Date

Particulars

LF

4/1/2013 Bank Account

Dr.
To Mr. A's Capital Account
(Being Capital Introduced in the profession)
4/30/2013 Laptop Account
Dr.
To X Ltd.
(Being Laptop purchased on credit)
5/6/2013 X Ltd.
Dr.
To Bank Account
(Being cash paid for purchase of laptop)
6/7/2013 Good Ltd.
Dr.
To Income Account
(Being services rendered to Good Ltd, on credit)
8/17/2013 Bank Account
Dr.
To Good Ltd.
(Being cheque received from Good Ltd.)
9/18/2013 Vehicle (Car) Account
Dr.
To Maruti Dealer Account
(Being car purchased from delear on credit basis)
10/20/2013 Maruti Dealer Account
Dr.
To Bank Account
(Being cheque paid for purchase of car)
11/26/2013 Y Ltd. Account
Dr.
To Income Account
(Being services rendered to Y Ltd, on credit)
2/27/2014 Bank Account
Dr.
To Y Ltd.
(Being cheque received from Y Ltd.)
3/31/2014 Petrol Account
Dr.
Telephone Expenses
Dr.
Staff Salary Account
Dr.
To Bank Account
(Being expenses paid in cash)
Total

Dr. (Rs.)
2,00,000

25,000

25,000

3,00,000

2,50,000

2,50,000

2,50,000

1,00,000

1,00,000

20,000
2,500
25,000

STEP 2
1
2
3
4
5
6
7
8
9

Ledger Accounts
Mr. A's Capital Account
Income Tax payable
X Ltd.
Maruti Dealer Account
Car Account
Laptop Acount
Bank Account / Cash Account
Good Ltd.
Y Ltd.

Type
Liability
Liability
Liability
Liability
Asset
Asset
Asset
Asset
Asset

Appear in
Balance Sheet
Balance Sheet
Balance Sheet
Balance Sheet
Balance Sheet
Balance Sheet
Balance Sheet
Balance Sheet
Balance Sheet

10
11
12
13
14

Income Account
Petrol Account
Telephone Account
Staff Salary Accout
Depreciation

Income
Expenses
Expenses
Expenses
Expenses

Income Statemen
Income Statemen
Income Statemen
Income Statemen
Income Statemen

Debit (Rs.)

Credit (Rs.)
2,00,000
0
#VALUE!

STEP 3
Trial Balance as at 31/3/2014
Sr.No.
1
2
3
4
5
6
7
8
9
10
11
12

Particulars
Mr. A's Capital Account
X Ltd.
Maruti Dealer Account
Car Account
Laptop Acount
Bank Account / Cash Account
Good Ltd.
Y Ltd.
Income Account
Petrol Account
Telephone Account
Staff Salary Accout
Total

2,50,000
25,000
#VALUE!
#VALUE!
#VALUE!
#VALUE!
20,000
2,500
25,000
#VALUE!

#VALUE!

Cr. (Rs.)

2,00,000

25,000

25,000

3,00,000

2,50,000

2,50,000

2,50,000

1,00,000

1,00,000

47,500

FINANCIAL
POSITION

PROFIT
POSITION

Income Statement of Mr. A Ltd. For the period 1/4/2013 to 31/03/2014

Sr.No.
A

C
D
E

Sr.No.
A

Particulars
Income
Less: Expenses
Petrol
Telephone
Salary
OPBDI & T
Depreciation
Laptop (@60%)
Car (@25%)
OPBI & T
Less: Interest
OPBT
Less: Tax @ 10%
PAT

Amount ( Rs.) Amount ( Rs.)

400000
20000
2500
25000
352500
15000
62500
275000
0
275000
27500
247500

Balance Sheet as at 31st March 2014

Particulars
Amount ( Rs.) Amount ( Rs.)
Liability
Sources of Funds
Mr. A's Capital Account
200000
Add: Profit for the year
247500
447500
Income Tax Payable

27500

Total

Asset
Application of Funds
Fixed Assets
Laptop
Less: Depreciation
Car
Less: Depreciation

475000

25000
15000
250000
62500

10000
187500

Current Assets
Sundry Debtors
Good Ltd.
Cash / Bank Balance

50000
227500

Total

475000

Operating Profit before Depreciation, Interest and Tax

Operating Profit before Interest and Tax

Tax rate 10% assumed.

Transferred to Balance Sheet Liability Side