1. Advanced Financial Accounting FIN-611 Mian Ahmad Farhan Lecture-4 Single Entry

2. Assets Fixed Assets xxx Investment xxx Current Assets Stock xxx Debtors xxx Prepaid expensesxxx Accrued income xxx Bank balance xxx Cash in hand xxx xxx Total Assets xxx Company Name Balance Sheet As on 31 st December ------

3. Fixed Assets Opening balance xxx Add During the year additions xxx Less Disposal of an assetxxx xxx Less Depreciation xxx Closing balancexxx

4. Question Opening BalanceRs. 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.

5. Solution Depreciation: Opening balance (1000 x 10%) = 100 Furniture purchased (500 x 10% x 6/12) = 25 125 Closing Balance: Furniture1,500 Less Depreciation 125 1,375

6. Investment Opening Investment xxx Add During the year purchased xxx Less Dispose off xxx Closing balance xxx

7. Owner’s Equity & Liabilities Owner’s equity xxx Loanxxx Current Liabilities Creditors xxx Accrued expensesxxx Unearned income xxx Bank O/D xxx xxx Total Liabilities xxx Company Name Balance Sheet As on 31 st December ------

8. Owner’s Equity Opening balancexxx Statement of affairs Add Fresh capital xxx Cash book receipt side Add Net profit xxx Income statement Less Drawings Cash xxx Cash book payment side Goods xxx Year end adjustment xxx Closing balance xxx

9. Loan Opening balance xxx Statement of affairs Add Fresh loan obtained during the year xxx Cash book receipt side Less Payment of Loan (xxx) Cash book payment side Closing Balance xxx

10. Assets Fixtures 800 Current Assets Stock 1,590 Debtors 1,100 Bank 1,130 Cash 80 3,900 Total Assets4,700 Less Current liabilities Creditors 400 Net Assets / Owner’s Equity 4,300 Company Name Statement of Affairs As on 31 st December ------

11. Question ReceiptsCashBankPaymentsCashBank Opening balance Receipts from debtors Cash sales 80 ---- 500 1,130 9,500 Supplier (Payment to creditors) Rent General expenses Drawings Closing balance ---- 50 ---- 520 10 7,200 200 180 ---- 3,050 58010,63058010,630 Cash Book

12. Question Cash paid to creditors Closing balance 7,200 650 Opening balance Credit Purchase 400 7,450 7,850 Creditor’s Account

13. Question Opening balance Credit sales 1,100 9,720 Cash received from debtors Closing balance 9,500 1,320 10,820 Debtor’s Account

14. Year End Adjustments Closing stock Rs. 1,700 Rent owing Rs. 50 Depreciation on fixture, 10% per annum

15. Sales Cash sales 9,720 Credit sales 500 10,220 Less Cost of goods sold Opening stock1,590 Add purchases 7,450 Less closing stock 1,700 7,340 Gross profit 2,880 Less Operating expenses Rent 300 General expenses 180 Depreciation on fixture (800 x 10%) 80 560 Net profit 2,320 Company Name Income statement As on 31 st December 2007

16. Working of Rent Rent Cash 50 Cheque 200 250 Add Owing 50 300

17. AssetsAmountOwner’s Equity & Liabilities Amount Fixed Assets Fixtures 800 Less dep. 80 Current Assets Closing stock Debtors Bank Cash 720 1,700 1,320 3,050 10 Owner’s equity 4,300 Add NP 2,320 Less drawings 520 Liabilities Creditors 650 Rent Due 50 6,100 700 6,800 Company Name Balance Sheet As on 31st December 2007