Mohammed Tawsif Salam, ID: 1223697

SESSION TASK
You are running your own trading business. At the end of financial year 2011, you have following financial data maintained by your accountant. If you want to know the financial position of your business and incomes generated by the business during this year. What will you do? Cash Utility Expense Owner’s Capital Supplies Interest Expense Bonds Payable Salaries Expense Inventories Income Tax Rate 4,000 8,000 45,000 4,000 5,000 40,000 16,000 45,000 30% Sales Buildings Accounts Payable Cost of Goods Sold Additional Paid in Capital Supplies Expense Accounts Receivable Owner drawings 100,000 65,000 12,000 58,000 20,000 3,000 10,000 1000

1. Classify the accounts as assets, liabilities, equity, revenue or expenses. 2. Prepare the Income Statement. 3. Prepare the Balance Sheet.

Solution to 1:
First the items have been classified into account/information types, Revenue | Expenses | Assets | Liabilities | Equities
Cash Utility Expense Owner’s Capital Supplies Interest Expense Bonds Payable Salaries Expense Inventories Income Tax Rate 4,000 8,000 45,000 4,000 5,000 40,000 16,000 45,000 30% Sales Buildings Accounts Payable Cost of Goods Sold Additional Paid in Capital Supplies Expense Accounts Receivable Owner drawings 100,000 65,000 12,000 58,000 20,000 3,000 10,000 1000

000 15.000 12.Mohammed Tawsif Salam.000 15.Operating Expenses Utility Expense Salaries Expense Supplies Expense Income from Operations Non-operating .000 10.000 45.000 3.000 Total L & E 128.000 65.000 3.000 4.000 8.000 16.Cost of Goods sold Gross Profit .000 1.000 65. ID: 1223697 Solution to 2: Income Statement Sales Revenue .000 Balance Sheet Assets Current Assets Cash Account Receivable Inventories Supplies Total Current Assets Non-current Assets Buildings Total Non-current Assets 4.000 40.000 Liabilities and Equities Current Liabilities Accounts Payable Tax (30%) Total Current Liabilities Long Term Liabilities Bonds Payable Total Long Term Liabilities Owner’s Equity Opening Capital Additional Investment Owner Drawings Net Income Ending or closing Balance 73.000 100.000 5.000 3.000 Net Income Solution to 3: 7.000 42.Interest Expense Income before taxes .000 20.000 .Income taxes (30%) 10.000 63.000 7.000 45.000 Total Assets 128.000 58.000 40.

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