Accounting Primer :

Solutions
By Prantik Ray
THE GREEN
COMPANY
April 1
ITEM
OPENING
BALANCE
SHEET
TRANSACTION
1
CLOSING
BALANCE
SHEET

ASSETS (OWNED)
Cash 0 + 100000 100000

TOTAL ASSETS 100000

LIABILITIES
Capital 0 + 100000 100000

TOTAL LIABILITIES 100000


April 2
ITEM
OPENING
BALANCE
SHEET
TRANSACTION
2
CLOSING
BALANCE
SHEET

ASSETS (OWNED)
Cash 100000 + 50000 150000

TOTAL ASSETS 150000

LIABILITIES
Capital 100000 100000
Bank Loan + 50000 50000
TOTAL LIABILITIES 150000


April 3
ITEM
OPENING
BALANCE
SHEET
TRANSACTION
3
CLOSING
BALANCE
SHEET

ASSETS (OWNED)
Building 0 + 25000 25000

Cash 150000 - 25000 125000

TOTAL ASSETS 150000

LIABILITIES
Capital 100000 100000

Bank Loan 50000 50000
TOTAL LIABILITIES 150000

April 4
ITEM
OPENING
BALANCE
SHEET TRANSACTION 4
CLOSING
BALANCE
SHEET

ASSETS (OWNED)
Building 25000 25000
Stocks 0 + 10000 10000
Cash 125000 - 10000 115000

TOTAL ASSETS 150000

LIABILITIES
Capital 100000 100000

Bank Loan 50000 50000
TOTAL LIABILITIES 150000
April 5
ITEM
OPENING
BALANCE
SHEET TRANSACTION 5
CLOSING
BALANCE
SHEET

ASSETS (OWNED)
Building 25000 25000
Stocks 10000 - 10000 0
Cash 115000 + 12000 127000

TOTAL ASSETS 152000

LIABILITIES
Capital 100000 100000
Retained Earnings 0 + 2000 2000
Bank Loan 50000 50000
TOTAL LIABILITIES 152000
The Yellow Company
May 1
ITEM
OPENING
BALANCE
SHEET
TRANSACTION
1
CLOSING
BALANCE
SHEET

ASSETS (OWNED)
Cash 0 + 125000 125000
TOTAL ASSETS 125000

LIABILITIES
Capital 0 + 50000 50000
Loan From Wife 0 + 75000 75000
TOTAL LIABILITIES 125000

May 3
ITEM
OPENING
BALANCE
SHEET
TRANSACTION
2
CLOSING
BALANCE
SHEET

ASSETS (OWNED)
Furniture 0 + 10000 10000
Cash 125000 - 10000 115000
TOTAL ASSETS 125000

LIABILITIES
Capital 50000 50000
Loan From Wife 75000 75000
TOTAL LIABILITIES 125000

May 10
ITEM
OPENING
BALANCE
SHEET TRANSACTION 3
CLOSING
BALANCE
SHEET
ASSETS (OWNED)
Furniture 10000 10000
Stock 0 + 50000 50000
Cash 115000 115000
TOTAL ASSETS 175000

LIABILITIES
Capital 50000 50000
Loan From Wife 75000 75000
Creditors 0 + 50000 50000
TOTAL LIABILITIES 175000

May 15
ITEM
OPENING
BALANCE
SHEET TRANSACTION 4
CLOSING
BALANCE
SHEET
ASSETS (OWNED)
Furniture 10000 10000
Stock 50000 - 50000 0
Debtors 0 + 60000 60000
Cash 115000 115000
TOTAL ASSETS 185000

LIABILITIES
Capital 50000 50000
Retained Earnings 0 + 10000 10000
Loan From Wife 75000 75000
Creditors 50000 50000
TOTAL LIABILITIES 185000

May 22
ITEM
OPENING
BALANCE
SHEET TRANSACTION 5
CLOSING
BALANCE
SHEET
ASSETS (OWNED)
Furniture 10000 10000
Stock 0 0
Debtors 60000 - 60000 0
Cash 115000 + 60000 175000
TOTAL ASSETS 185000

LIABILITIES
Capital 50000 50000
Retained Earnings 10000 10000
Loan From Wife 75000 75000
Creditors 50000 50000
TOTAL LIABILITIES 185000

May 23
ITEM
OPENING
BALANCE
SHEET TRANSACTION 6
CLOSING
BALANCE
SHEET
ASSETS (OWNED)
Furniture 10000 10000
Stock 0 0
Debtors 0 0
Cash 175000 - 50000 125000
TOTAL ASSETS 135000

LIABILITIES
Capital 50000 50000
Retained Earnings 10000 10000
Loan From Wife 75000 75000
Creditors 50000 - 50000 0
TOTAL LIABILITIES 135000

May 31
ITEM
OPENING
BALANCE
SHEET TRANSACTION 7
CLOSING
BALANCE
SHEET
ASSETS (OWNED)
Furniture 10000 10000
Stock 0 0
Debtors 0 0
Cash 125000 - 25000 100000
TOTAL ASSETS 110000

LIABILITIES
Capital 50000 50000
Retained Earnings 10000 10000
Loan From Wife 75000 - 25000 50000
Creditors 0 0
TOTAL LIABILITIES 110000
The Blue Company
July 1
ITEM
OPENING
BALANCE
SHEET TRANSACTION 1
CLOSING
BALANCE
SHEET

ASSETS (OWNED)
Cash 0 + 500000 500000
TOTAL ASSETS 500000

LIABILITIES
Capital 0 + 200000 200000
Bank Loan 0 + 300000 300000
TOTAL LIABILITIES 500000

July 3
ITEM
OPENING
BALANCE
SHEET TRANSACTION 2
CLOSING
BALANCE
SHEET

ASSETS (OWNED)
Building 0 + 50000 50000
Equipment 0 + 200000 200000
Furniture 0 + 20000 20000
Cash 500000 - 270000 230000
TOTAL ASSETS 500000

LIABILITIES
Capital 200000 200000
Bank Loan 300000 300000
TOTAL LIABILITIES 500000

July 7
ITEM
OPENING
BALANCE
SHEET
TRANSACTION 3

CLOSING
BALANCE
SHEET
ASSETS (OWNED)
Building 50000 50000
Equipment 200000 200000
Furniture 200000 20000
Stock- Raw Mat. 0 + 100000 100000
Cash 230000 230000
TOTAL ASSETS 600000

LIABILITIES
Capital 200000 200000
Bank Loan 300000 300000
Creditors 0 + 100000 100000
TOTAL LIABILITIES 600000

July 15
ITEM
OPENING
BALANCE
SHEET TRANSACTION 4
CLOSING
BALANCE
SHEET
ASSETS (OWNED)
Building 50000 50000
Equipment 200000 200000
Furniture 20000 20000
Stock- Raw Mat. 100000 - 100000 0
Stocks- WIP 0 + 140000 140000
Cash 230000 230000
TOTAL ASSETS 640000

LIABILITIES
Capital 200000 200000
Bank Loan 300000 300000
Creditors 100000 100000
Accrued Wages 0 + 40000 40000
TOTAL LIABILITIES 640000

July 22
ITEM
OPENING
BALANCE
SHEET
TRANSACTION
5
CLOSING
BALANCE
SHEET
ASSETS (OWNED)
Building 50000 50000
Equipment 200000 200000
Furniture 20000 20000
Stock- finished goods 0 + 180000 180000
Cash 230000 230000
TOTAL ASSETS 680000

LIABILITIES
Capital 200000 200000
Bank Loan 300000 300000
Creditors 100000 100000
Accrued Wages 40000 + 40000 80000
TOTAL LIABILITIES 680000

July 24
ITEM
OPENING
BALANCE
SHEET
TRANSACTION
6
CLOSING
BALANCE
SHEET
ASSETS (OWNED)
Building 50000 50000
Equipment 200000 200000
Furniture 20000 20000
Debtors- Ministry of Commerce 0 + 250000 250000
Cash 230000 230000
TOTAL ASSETS 750000

LIABILITIES
Capital 200000 200000
Retained Earnings 0 + 70000 70000
Bank Loan 300000 300000
Creditors 100000 100000
Accrued Wages 80000 80000
TOTAL LIABILITIES 750000
July 31
ITEM
OPENING
BALANCE
SHEET
TRANSACTION
7
CLOSING
BALANCE
SHEET
ASSETS (OWNED)
Building 50000 50000
Equipment 200000 200000
Furniture 20000 20000
Debtors- Ministry of Commerce 250000 - 250000 0
Cash 230000 + 70000 300000
TOTAL ASSETS 570000

LIABILITIES
Capital 200000 200000
Retained Earnings 70000 70000
Bank Loan 300000 300000
Creditors 100000 - 100000 0
Accrued Wages 80000 - 80000 0
TOTAL LIABILITIES 570000
The Brown Company
August 1
ITEM
OPENING
BALANCE
SHEET
TRANSACTION
1
CLOSING
BALANCE
SHEET

ASSETS (OWNED)
Cash 0 + 700000 700000
TOTAL ASSETS 700000

LIABILITIES
Capital 0 + 300000 300000
Bank Loan 0 + 400000 400000
TOTAL LIABILITIES 700000

August 1
ITEM
OPENING
BALANC
E SHEET
TRANSACTION
2
CLOSING
BALANCE
SHEET

ASSETS (OWNED)
Building 0 + 100000 100000
Equipment 0 + 250000 250000
Furniture 0 + 50000 50000
Stock- Raw Mat 0 + 150000 150000
Cash 700000 - 550000 150000
TOTAL ASSETS 700000

LIABILITIES
Capital 300000 300000
Bank Loan 400000 400000
TOTAL LIABILITIES 700000

August 5
ITEM
OPENING
BALANCE
SHEET
TRANSACTION
3
CLOSING
BALANCE
SHEET
ASSETS (OWNED)
Building 100000 100000
Equipment 250000 250000
Furniture 50000 50000
Stock- Raw Mat 150000 - 100000 50000
Stock- WIP 0 + 130000 130000
Cash 150000 150000
TOTAL ASSETS 730000

LIABILITIES
Capital 300000 300000
Bank Loan 400000 400000
Accrued Wages 0 + 30000 30000
TOTAL LIABILITIES 730000
August 10
ITEM
OPENING
BALANCE
SHEET
TRANSACTION
4
CLOSING
BALANCE
SHEET
ASSETS (OWNED)
Building 100000 100000
Equipment 250000 250000
Furniture 50000 50000
Stock- Raw Mat 50000 50000
Stock- WIP 130000 - 97500 32500
Stock- Finished Goods 0 + 120000 120000
Cash 150000 150000
TOTAL ASSETS 752500

LIABILITIES
Capital 300000 300000
Bank Loan 400000 400000
Accrued Wages 30000 + 22500 52500
TOTAL LIABILITIES 752500
August 30
ITEM
OPENING BALANCE
SHEET TRANSACTION 5 CLOSING BALANCE SHEET
ASSETS (OWNED)
Fixed Assets 400000 400000
Stock- Raw Mat 50000 50000
Stock- WIP 32500 32500
Stock- Finished Goods 120000 - 80000 40000
Debtors 0 + 120000 120000
Cash 150000 150000
TOTAL ASSETS 792500
LIABILITIES
Capital 300000 300000
Retained Earnings 0 + 40000 40000
Bank Loan 400000 400000
Accrued Wages 30000 52500
TOTAL LIABILITIES 792500
August 31
ITEM
OPENING BALANCE
SHEET TRANSACTION 6
CLOSING BALANCE
SHEET
ASSETS (OWNED)
Fixed Assets 400000 400000
Stock- Raw Mat 50000 50000
Stock- WIP 32500 32500
Stock- Finished Goods 40000 40000
Debtors 120000 120000
Cash 150000 - 4000 146000
TOTAL ASSETS 788500
LIABILITIES
Capital 300000 300000
Retained Earnings 40000 - 4000 36000
Bank Loan 400000 400000
Accrued Wages 52500 52500
TOTAL LIABILITIES 788500
August 31
ITEM
OPENING BALANCE
SHEET TRANSACTION 7
CLOSING BALANCE
SHEET
ASSETS (OWNED)
Fixed Assets 400000 - 6000 394000
Stock- Raw Mat 50000 50000
Stock- WIP 32500 32500
Stock- Finished Goods 40000 40000
Debtors 120000 120000
Cash 146000 146000
TOTAL ASSETS 782500
LIABILITIES
Capital 300000 300000
Retained Earnings 36000 - 6000 30000
Bank Loan 400000 400000
Accrued Wages 52500 52500
TOTAL LIABILITIES 782500
August 31
ITEM
OPENING
BALANC
E SHEET
TRANSACTION
8
CLOSING
BALANCE
SHEET
ASSETS (OWNED)
Fixed Assets 394000 394000
Stock- Raw Mat 62500 62500
Stock- WIP 50000 50000
Stock- Finished Goods 32500 32500
Debtors 120000 120000
Cash 146000 146000
TOTAL ASSETS 782500
LIABILITIES
Capital 300000 300000
Retained Earnings 30000 - 9000 21000
Bank Loan 400000 400000
Provision for Income Tax 0 + 9000 9000
Accrued Wages 52500 52500
TOTAL LIABILITIES 782500
August 31
ITEM
OPENING
BALANCE
SHEET TRANSACTION 9
CLOSING
BALANCE
SHEET
ASSETS (OWNED)
Fixed Assets 394000 394000
Stock- Raw Mat 50000 50000
Stock- WIP 32500 32500
Stock- Finished Goods 40000 40000
Debtors 120000 120000
Cash 146000 - 15000 131000
TOTAL ASSETS 767500
LIABILITIES
Capital 300000 300000
Retained Earnings 21000 - 15000 6000
Bank Loan 400000 400000
Provision for Income Tax 9000 9000
Accrued Wages 52500 52500
TOTAL LIABILITIES 767500
The Red Company
September 1
ITEM
OPENING
BALANCE
SHEET TRANSACTION 1
CLOSING
BALANCE
SHEET

ASSETS (OWNED)
Stocks 0 + 175000 175000
Cash 0 + 50000 50000
TOTAL ASSETS 225000

LIABILITIES
Capital 0 + 225000 225000
TOTAL LIABILITIES 225000

September 4
ITEM
OPENING
BALANC
E SHEET
TRANSACTION
2
CLOSING
BALANCE
SHEET

ASSETS (OWNED)
Stocks 175000 - 175000 0
Debtors 0 + 125000 125000
Cash 50000 50000
Loss 0 + 50000 50000
TOTAL ASSETS 225000

LIABILITIES
Capital 225000
TOTAL LIABILITIES 225000

September 10
ITEM
OPENING
BALANCE
SHEET
TRANSACTION
3
CLOSING
BALANCE
SHEET

ASSETS (OWNED)
Stocks 0
Debtors 125000 - 125000 0
Cash 50000 + 100000 150000
Loss 50000 + 25000 75000
TOTAL ASSETS 225000

LIABILITIES
Capital 225000
TOTAL LIABILITIES 225000

The Orange Company
November 3
ITEM
OPENING
BALANCE
SHEET TRANSACTION 1
CLOSING
BALANCE
SHEET
ASSETS (OWNED)
Net Fixed Assets 343500 343500
Investments 125000 125000
Stock- Raw Mat 50000 50000
Stock- WIP 56000 56000
Stocks- Finished Goods 54000 54000
Debtors 100000 - 60000 40000
Bank 171500 - 62000 109500
TOTAL ASSETS 778000
LIABILITIES
Capital 350000 350000
Retained Earnings 18000 18000
Bank Loan 380000 380000
Creditors 80000 - 50000 30000
Accrued Wages 72000 - 72000 0
TOTAL LIABILITIES 778000
November 29
ITEM
OPENING
BALANCE
SHEET
TRANSACTION
2
CLOSING
BALANCE
SHEET
ASSETS (OWNED)
Net Fixed Assets 343500 343500
Investments 125000 125000
Stock- Raw Mat 50000 + 40000 90000
Stock- WIP 56000 + 28000 84000
Stocks- Finished Goods 54000 - 18000 36000
Debtors 40000 + 125000 165000
Bank 109500 109500
TOTAL ASSETS 953000
LIABILITIES
Capital 350000 350000
Retained Earnings 18000 + 35000 53000
Bank Loan 380000 380000
Creditors 30000 + 100000 130000
Accrued Wages 0 + 40000 40000
TOTAL LIABILITIES 953000
November 30: Assets Side
ITEM
OPENING
BALANC
E SHEET
TRANSACTION
3
CLOSING
BALANCE
SHEET
ASSETS (OWNED)

Gross Fixed Assets 350000 350000
Accumulated Dep 6500 + 6500 13000
Net Fixed Assets 343500 337000
Investments 125000 125000
Stock- Raw Mat 90000 90000
Stock- WIP 84000 84000
Stocks- Finished Goods 36000 36000
Debtors 165000 165000
Bank 109500 - 16900 92600
TOTAL ASSETS 929600
November 30: Liabilities Side
LIABILITIES
Capital 350000 350000
Retained Earnings 53000 - 25900 27100
Bank Loan 380000 380000
Creditors 130000 130000
Accrued Wages 40000 40000
Provision for Bad Debts 0 + 2500 2500
TOTAL LIABILITIES 929600
The End