Assignment Cover Sheet: Accounting and Costing For Business

Accounting and costing for business
Assignment Cover Sheet
Qualification Module Number and Title

HND in Business Management BHNC4204: Accounting & Costing for Business
Student Name& No. Assessor

Tharushi Hettiarachchi NG/HNDBSM/38/21 Thamara Ranasinghe
Hand out date Submission Date

04/12/2020 04/01/2021
Assessment type Duration/Length of Weighting of Assessment
Individual Report Assessment Type 100%
6000 words
Learner declaration
I, ………………………………………….certify that the work submitted for this assignment is

my own and research sources are fully acknowledged.
Marks Awarded
First assessor
IV marks
Agreed grade
Signature of the assessor Date
1|Page
Classification - Public
FEEDBACK FORM
INTERNATIONAL COLLEGE OF BUSINESS & TECHNOLOGY
Module: BHNC 4204: Accounting & Costing for Business
Student: Tharushi Hettiarachchi
Assessor: Thamara Ranasinghe

Assignment: Individual Report
Strong features of your work:
Areas for improvement:
Marks Awarded:
2|Page
Acknowledgement
It is really a matter of pleasure for me get an opportunity to thank all the persons who contributed
directly or indirectly for the successful complication of the project report. “Report of Accounting
costing for business”
First of all, I am extremely thankful to my university “ICBT campus” providing me an

opportunity and for all its corporation and contribution. I also express my gratitude to my friends
and our teacher Mr. Tamara Ranasinghe for helping me during this report.
I would also like to thank my parents, family members for extending their valuable time and
cooperation.
Executive summary
In this assignment explain about accounting and costing method for business. Accounting
communicates the results of business operations to various parties who have some stakeholders
in the business e.i. proprietor, creditors, investors, government and other agencies. Though
accounting is generally associated with business but it is not only business and which makes use
of accounting. This assignment is designed to evaluate the knowledge on financial accounting
and management accounting tools and their application.
3|Page
Table of content
Introduction
1 – Task 01
1.1. Ledger Account for Pat’s business as at 31.12.2019
1.2. Journals for Pat’s business as at 31.12.2019
1.3. Trial balance for Pat’s business as at 31.12.2019
2 – Task 02
2.1. Financial accounting provides useful information for wide range of users
2.2. Shane’s trading’s profit and loss account
2.3. Shane’s trading’s balance sheet
3. Identify and classify different type of cost of the new product
3.1. Direct material
3.2. Direct labor
3.3. Manufacturing overhead
4 – Task 04
4.1. Profit and loss account under absorption costing
4.2. Profit and loss account under Marginal costing
4.3. Profit Reconciliation

4.4. Difference between the profit under Marginal and absorption costing
5 – Task 05
5.1. Sales budget
5.2. Production budget
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5.3. Direct Material Purchase budget
5.4. Direct labor budget

5.5. Cash budget
5.6. Expected performance of the company at the budget committee meeting
6 – Task 06
6.1. Material cost Variance and recommendation
6.2. Direct labor Variance and recommendation
6.3. Variable overhead Variance and recommendation
6.4. Fixed overhead Variance and recommendation
6.5. Sales Variance and recommendation
Conclusion
References
5|Page
Introduction
Accounting is the system of recording financial transactions with both numbers and text form of
financial statements. Accounting is the system of recording, summarizing and analyzing an
economic entity’s financial transactions. Accounting information’s useful for so many users.
Such as managers, employees, banks, investors, government and labor union. Accounting can
divide to the two parts,
 Financial Accounting
 Management Accounting
The difference between financial and managerial accounting is that financial accounting is the
collection of accounting data to create financial statements, while managerial accounting is the
internal processing used to account for business transaction.
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Task 01
Ledger Account for Pat’s business as at 31.12.2019
Dr. Cash Account Cr.

Office Expenses
01/12/2019 Capital A/C 10,000.00 24/12/2019 A/C 5,000.00
29/12/2019 Debtors A/C 4,000.00 31/12/2019 Creditors A/C 6,000.00
29/12/2019 Debtors A/C 6,000.00 31/12/2019 Creditors A/C 8,000.00
31/12/2019 Balance C/F 1,000.00
20,000.00 20,000.00
01/01/2020 Balance B/F 1,000.00
Dr. Capital Account Cr.

Cash
31/12/2019 Balance C/F 10,000.00 01/12/2019 A/C 10,000.00
10,000.00 10,000.00
01/01/2020 Balance B/F 10,000.00
Dr. Office Expenses account Cr.
24/12/2019 Cash A/C 5,000.00 31/12/2019 Balance C/F 5,000.00
5,000.00 5,000.00
01/01/2020 Balance B/F 5,000.00
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Dr. Debtors Account Cr.

Cash
12,000.00
31/12/2019 Sales A/C 29/12/2019 A/C 4,000.00
Cash
29/12/2019 A/C 6,000.00
31/12/2019 Balance C/F 2,000.00

12,000.00
12,000.00
01/01/2020 Balance B/F 2,000.00
Dr. Creditors Account Cr.
31/12/2019 Cash A/C 6,000.00 31/12/2019 Purchase A/C 20,000.00

31/12/2019 Cash A/C 8,000.00
Purchases return
31/12/2019 A/C 3,000.00
31/12/2019 Balance C/F 3,000.00
20,000.00 20,000.00
01/01/2020 Balance B/F 3,000.00
Dr. Purchase return account Cr.
31/12/2019 Balance C/F 3,000.00 31/12/2019 Purchase A/C 3,000.00
3,000.00 3,000.00
01/01/2020 Balance B/F 3,000.00
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Dr. Purchase account Cr.
31/12/2019 Creditors A/C 20,000.00 31/12/2019 Balance C/F 20,000.00
20,000.00 20,000.00
01/01/2020 Balance B/F 20,000.00
Dr. Income Account Cr.
31/12/2019 Balance C/F 12,000.00 31/12/2019 Debtors A/C 12,000.00
12,000.00 12,000.00
01/01/2020 Balance B/F 12,000.00
Journals for Pat’s business as at 31.12.2019
Purchase Journal
Date Supplier Name Value
02/12/2019 Grass 6,000.00
02/12/2019 Seed 7,000.00
15/12/2019 Grass 3,000.00
15/12/2019 Seed 4,000.00
31/12/2019 Transfer to the ledger 20,000.00
Sales Journal
Date Customer Name Value
10/12/2019 Fog 3,000.00
10/12/2019 Mist 4,000.00
20/12/2019 Fog 2,000.00
20/12/2019 Mist 3,000.00
9|Page
Purchase return Journal

Date Supplier Name Value
12/12/2019 Grass 1,000.00
12/12/2019 Seed 2,000.00
Trial balance for Pat’s business as at 31.12.2019
Dr. Cr.
Cash 1,000.00
Capital 10,000.00
Office Expenses 5,000.00
Debtors 2,000.00
Creditors 3,000.00
Purchase return 3,000.00
Purchase 20,000.00
Income/sales 12,000.00
28,000.00 28,000.00
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Task 02
Financial accounting provides useful information for wide range of users
The accounting process provides financial data for a broad range of individuals whose objectives
in studying the data vary widely. There are three main users of accounting information’s are,
 Internal users
 External users
 Government
Each group uses accounting information differently and requires the information to be presented
differently.
Internal users
Accounting supplies manages and owners with significant financial data that is useful for
decision making. This type of accounting in generally referred to as managerial accounting.
Some of the ways internal users employ accounting information include the following,
 Assessing how management has discharged its responsibility for protecting and managing
the company’s resources.
 Shaping decision about expansion or downsizing.
 Shaping decisions about when to borrow or invest company resources.
External users
The record of the business financial history for use by external entities is used for many
purposes.
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Investors
Investors are concerned about risk and return in relation to their investments. They require
information to decide whether they should continue to invest the business. They also need to be
able to access whether a business will be able to pay dividends and measure the performance of
the business management overall
Lenders
Banks and other financial institutions who lend money to a business required information that
helps them determined whether loans and interest will be paid when due.
Creditors
Suppliers and trade creditors required information’s that helps them understand and assess the
short term liquidity of a business.
Customers and debtors
Customers and trade debtors required information about the ability of the business to survive and
prosper. As customer of the company’s product, they have a long term interest in the company’s
range of products and services.
Employees
They required information about the stability and continuing profitability of the business. They
are crucially interested in information about employment prospects and the maintenance of
pension funding and retirement benefits. They are also likely to interested in the pay and benefits
obtained by senior management.
Analysts
Investment analysts are an important user group specially for companies quoted on a stock
exchange. They required vary detailed financial and other information’s in order to analyses the
competitive performance of the business and its sectors.
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Government
There are many government agencies and departments that are interested in accounting
information. Ex: government need information on business profitability in order to levy and
collect corporation tax.
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Shane’s trading’s profit and loss account
Shane's Trading’s
Profit and loss account
for the 01 April to 2018 to 31 March 2019
Rs.
Sales 100,000.00
Less: cost of sale (W1) (50,000.00)
Gross profit 50,000.00
Less: Expenses
Administration expenses - W2 (43,000.00)
Sale distribution expenses - W3 (1,450.00)
Operating profit 5,550.00
less: finance expenses
Net profit 5,550.00
Less: Drawings (6,000.00)
Loss after drawings (450.00)
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Shane’s trading’s balance sheet
Shane's Trading’s
Balance sheet
as at 31st march 2019
Rs. Rs.
Asset
Non-current asset
Office furniture (W5) 2,500.00 2,500.00
Non-Current asset
insurance prepayment 500.00
Inventory 15,000.00
Debtors (W6) 18,050.00
Cash at bank 1,200.00
Cash 300.00 35,050.00
Total asset 37,550.00
Capital 33,000.00
retained profit (450.00) 32,550.00
Non-current liabilities
Current liabilities
Unpaid Salary 1,000.00
Trade Creditors 4,000.00 5,000.00
Total equity and liability 37,550.00
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Working
W1 - Cost of sales
Unsolded inventory 01.04.2018 - TB 10,000.00

(+) Purchases - TB 55,000.00
65,000.00
Unsolded inventory 31.03.2019 15,000.00
Cost of sale 50,000.00
W2 - Administration expenses
insurance
Trial Balance 2,000.00

1,500.00
prepaid expenses (500.00)
Depreciation (W5) 500.00
Salaries
Trial Balance 25,000.00
26,000.00
Accrued expenses 1,000.00
Office expenses 15,000.00
43,000.00
W3 - Sales and Distribution expenses

Bad Debt (W6) 1,000.00
Doubtful debt (W6) 450.00
1,450.00
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W5 - Depreciations
Office furniture - TB 5,000.00
31.03.31 Depreciation (TB) 2,000.00
10% Depreciation 500.00 2,500.00
Net Book Value 2,500.00
W6 - Bad Debts & doubtful debt
Trade debtors - TB 20,000.00

Less: Bad debt written off (1,000.00)
19,000.00
5% Doubtful debt 950.00
opening balance 500.00
provision during the year 450.00
18,050.00
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Task 03
Identify and classify different type of cost of the new product
Product costs re the costs directly incurred from the manufacturing process. There are three type
categories.
 Direct material
 Direct labor
 Manufacturing overhead
Direct material
Direct material costs are the costs of raw materials or parts that go directly into producing
products. If it is biscuit manufacturing company flour, sugar, preserved items will be direct
material.
Direct labor
Direct labor costs are the wages, benefits, and insurance that are paid to employees who are
directly involved in manufacturing and producing the goods. If it is biscuit manufacturing
company machine operators are the direct labors.
Manufacturing overhead
Manufacturing overhead costs include direct factory – related costs that are incurred when
producing a product, such as the cost of machinery and the cost to operate the machinery.
Manufacturing overhead costs also include some indirect cost.
 Indirect material
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Indirect materials are materials that are used in the production process but that are not
directly traceable to the product. If it is biscuit manufacturing company packaging
materials will be an indirect cost.
 Indirect labor
Indirect labor is the labor of those who are not directly involved in the production of the
product. If it is biscuit manufacturing company sales force is the indirect labor.
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Task 04
profit and loss account under absorption costing
XYZ Ltd.
profit and loss account under absorption costing
For the month of May 2019
Sales W1 350,000.00
Cost of Sales
Opening Stock
Purchase cost W2 240,000.00
Closing Stock W3 (16,000.00) 224,000.00
126,000.00
Gross Profit
Selling and Distribution Cost W4 36,000.00

Administration cost W5 33,000.00 (69,000.00)
57,000.00
Under absorption W6 3,000.00
Profit 60,000.00
Working
W1 : Sales Value
Selling cost per unit 25.00

Actual units sold 14,000.00
Total Sales 350,000.00
W2 : Purchase cost
Direct material 8.00

Direct Labor 5.00
Direct Expenses 2.00
Fixed Production cost 1.00
Cost per unit 16.00
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Actual unit produced 15,000.00

Purchase cost 240,000.00
W3 : Closing Stock
Actual units produced 15,000.00

Actual units Sold (14,000.00)
Closing Stock 1,000.00
Cost per unit 16.00
Closing stock value 16,000.00
W4 : Selling & distribution cost
Variable cost 30,000.00

Fixed cost 6,000.00
36,000.00
W5 : Administration cost

Fixed cost 18,000.00
33,000.00
W6 : Under Absorption
Absorbed overhead 15,000.00

Actual over head 12,000.00
3,000.00
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profit and loss account under Marginal costing

XYZ Ltd.
profit and loss account under Marginal costing
For the month of May 2019
Sales W1 350,000.00
Cost of sale
opening stock
(+) purchase cost W2 225,000.00
(-) closing stock W3 (15,000.00) 210,000.00
cost of sales variable 140,000.00
(-) variable selling cost W4 (30,000.00)
(-) variable administration cost W5 (15,000.00) (45,000.00)
Gross profit 95,000.00
Fixed cost
Production overhead (12,000.00)
selling and distribution ost (6,000.00)
administration cost (18,000.00) (36,000.00)
Profit 59,000.00
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W1 : Sales Value
Selling cost per unit 25.00
Actual unit cost 14,000.00
Total sales 350,000.00
W2 : Purchase cost
Direct material 8.00

Direct labor 5.00
Direct expenses 2.00
Variable cost per unit 15.00
225,000.00
W3 : Closing Stock

Actual units sold (14,000.00)
Closing stock 1,000.00
variable cost per unit 15.00
Closing stock value 15,000.00
W4 : Selling & distribution cost

Fixed cost 6,000.00
36,000.00
W5 : Administration cost

Fixed cost 18,000.00
33,000.00
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Profit Reconciliation
Profit Reconciliation
Marginal costing 59,000.00

Absorption costing 60,000.00
1,000.00
Stock Valuation
Marginal costing 15,000.00
Absorption costing 16,000.00
1,000.00
Unit price
Marginal costing 15.00
Absorption costing 16.00
1.00
Closing stock (units) 1,000.00
Value 1,000.00
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Difference between the profit under Marginal and absorption costing

Marginal costing Absorption costing
Based on classifying costs by Focuses on whether a cost is
Definition
behavior direct or indirect by nature.
Calculate the cost of output as
well as providing the closing
Enables well informed short-
Purpose inventory valuation for
term decision making
inclusion in the financial
statement.
Based on variable costs but Include both direct and
Calculation
excludes fixed costs indirect cost
Contribution per unit is
Contribution per unit Net profit per unit considered.
considered
Not allowed for financial Can use for both financial and
Use
reporting purpose management accounting
Is used for internal reporting
Is used for external to the
particularly to the
Reporting government, tax authorities
management for decision
and shareholders
making.
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Task 05
Sales budget
Mercury Apparel Ltd.

Sales budget for year ending 31st December 2019
Venus Texus Miracle

Sales units 20,000.00 18,000.00 15,000.00
Selling price per unit (Rs) 25.00 20.00 22.00
Budgeted sales 500,000.00 360,000.00 330,000.00
Production budget
Production budget for year ending 31st December
2019
Venus Texus Miracle

Requirement for sales 20,000.00 18,000.00 15,000.00
(+) closing finished goods 20,000.00 18,000.00 15,000.00
40,000.00 36,000.00 30,000.00
(-) Opening finished goods 3,000.00 3,000.00 2,000.00
Requirement of production (unit) 37,000.00 33,000.00 28,000.00
Working
Venus Texus Miracle
Opening stock 3,000.00 3,000.00 2,000.00
Increased by% 20% 50% 20%
Increased amount 600.00 1,500.00 400.00
Closing stock (units) 3,600.00 4,500.00 2,400.00
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Direct Material Purchase budget

Direct Material Purchase budget for year ending 31st
December 2019
A B C D E
Requirement of production
Venus 111,000.00 148,000.00 222,000.00 74,000.00 37,000.00
Texus 66,000.00 99,000.00 132,000.00 66,000.00 33,000.00
Miracle 140,000.00 56,000.00 84,000.00 84,000.00 28,000.00
Requirement of Material 317,000.00 303,000.00 438,000.00 224,000.00 98,000.00
(+) Closing raw material stock (unit) 32,000.00 40,000.00 48,000.00 32,000.00 8,000.00
349,000.00 343,000.00 486,000.00 256,000.00 106,000.00
(-) Opening raw material stock (unit) (40,000.00) (50,000.00) (60,000.00) (40,000.00) (10,000.00)
Raw Material purchase (units) 309,000.00 293,000.00 426,000.00 216,000.00 96,000.00
Unit price of raw material (Rs) 0.50 0.35 0.60 0.55 1.00
Raw Material purchase (Rs.) 154,500.00 102,550.00 255,600.00 118,800.00 96,000.00
Direct labor budget

Direct labor budget for year ending 31st December 2019
Venus Texus Miracle

Requirement of production (unit) 37,000.00 33,000.00 28,000.00
Requirement labor hours per unit 2 4 3
Total requirement of labor hours 74,000.00 132,000.00 84,000.00
Rate per labor hour (Rs) 2.00 2.00 2.00
Total cost of labor (Rs) 148,000.00 264,000.00 168,000.00
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Cash budget
Cash budget for year ending 31st December 2019
Q1 Q2 Q3 Q4 Total
Opening cash balance 8,500.00 28,500.00 73,500.00 105,496.00 215,996.00
Receipts from customers 250,000.00 300,000.00 280,000.00 246,250.00 1,076,250.00
Total receipts 258,500.00 328,500.00 353,500.00 351,746.00 1,292,246.00
Payments -
Material Expenses 100,000.00 120,000.00 110,000.00 136,996.00 466,996.00
Payment for wages 100,000.00 110,000.00 120,000.00 161,547.00 491,547.00
Other cost & expenses 30,000.00 25,000.00 18,004.00 3,409.00 76,413.00
Total Expenditures 230,000.00 255,000.00 248,004.00 301,952.00 1,034,956.00
Cash Balance 28,500.00 73,500.00 105,496.00 49,794.00 257,290.00
Expected performance of the company at the budget committee meeting

 Venus product have some more budgeted sales than other two products. Hence company
need to more weightage for that. Texas have budget than miracle.
 According to the sales forecast Venus product need to more production and Texas and
miracle need after that.
 Need take the quotation from more suppliers for the reduce the material cost
 More labor hours required for the Texas product. Because of that those employees should
train and find the technologies for increase the efficiency.
 Miracle product employees takes more time to produce the less amount of products.
 Cash flow is running well and can reduce the other cost and expenses. From that can
increase cash excess.
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Task 06
Material cost Variance and recommendation
Favorable - F Adverse - A
Material cost variance
Stranded cost Actual cost

500,000.00 720,000.00 (220,000.00) A
Price variance
Stranded Price Actual price Stranded cost

5.00 8.00 90,000.00 (270,000.00) A
Material usage variance
Stranded qty. for actual

Actual output Standard price
output
100,000.00 90,000.00 5 50,000.00 F
 Actual Material cost and price is higher than budgeted cost and price, for that can change
a supplier. Can call a quotation for the new supplier.
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Direct labor Variance and recommendation
Direct labor variance
Standard hours for actual

Actual hours for actual output
output
Standard rate per hour Actual rate per hour
80,000.00 63,000.00 17,000.00 F
Rate Variance
Standard rate per hour Actual rate per hour Actual hour
8.00 7.68 8,200.00 2,600.00 F
Efficiency variance
standard hours for actual Standard

actual hours
output rate
10,000.00 8,200.00 8 14,400.00 F
 Labor variances are favorable for the organization. Can influence labors for become a
more efficiency by training.
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Variable overhead Variance and recommendation

Variable overhead variance
Standard VOH Actual VOH

20,400.00 25,000.00 (4,600.00) A
Efficiency variance
Standard output Actual output Standrad rate

1,020.00 1,000.00 20 400.00 A
Expenditure variance
Standard output*standard rate Actual output*actual rate

20,000.00 25,000.00 (5,000.00)
 Budgeted Variable overhead is less than actual variance overhead value. For that can
reduce the direct cost.
Ex: reduce material cost
Take new machineries
 Actual expenditure is higher than budgeted expenditure. For that can reduce the cost by
minimizing the production cost and indirect cost
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Fixed overhead Variance and recommendation
Fixed overhead variances
Actual output*standard rate Actual Fixed overhead

10,000.00 9,800.00 200.00 F
Fixed overhead expenditure
Standard fixed overhead Actual overhead

10,200.00 9,800.00 400.00 F
Fixed overhead volume

variance
Actual output*standard rate per

Standard fixed overhead
unit
10,000.00 10,200.00 (200.00) A
 Actual Fixed overhead volume variance is adverse value. For that can increase the
production. By taking new machineries and training employees.
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Sales Variance and recommendation
Sales Variance
Budgeted qty. * Budgeted price Actual qty. * Actual price
918,000.00 975,000.00 (57,000.00) A
Sales Volume Variance
Budgeted
Budgeted qty. Actual qty. price
1,020.00 1,000.00 900 18,000.00 F
Sales Price Variance
Budgeted Price Actual price Actual Qty.
900.00 975.00 1000 (75,000.00) A
 For increase the sales,

 Can reduce the price
 Give the training to the sales force
 Give the discount to the customer
 New sales promotions
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Conclusion
in this report explain about,
 Pat’s journal and ledger accounts and trail balance

 Explain about Financial accounting provide useful information’s to a wide range of users
 Shan’s trading profit and loss and balance sheet
 Explain about type of cost for the new product
 Preferred profit and loss account under absorption and marginal cost
 Explain difference between absorption and marginal costing
 Making sales, production, material purchase and labor budgets.
 Calculate variances and give the recommendation for improvements.
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References
Corporate Finance Institute. 2021. Product Costs - Types of Costs, Examples, Materials, Labor,
Overhead. [online] Available at:
<https://corporatefinanceinstitute.com/resources/knowledge/accounting/product-costs/>
[Accessed 4 January 2021].
FreshBooks. 2021. Financial Accounting Vs. Managerial Accounting. [online] Available at:
<https://www.freshbooks.com/hub/accounting/financial-accounting-vs-managerial-accounting>
[Accessed 4 January 2021].
Njogu, T., 2021. Difference Between Absorption Costing and Marginal Costing | Difference
Between. [online] Differencebetween.net. Available at:
<http://www.differencebetween.net/business/difference-between-absorption-costing-and-
marginal-costing/> [Accessed 4 January 2021].
tutor2u. 2021. Users of Financial Accounts | Business | Tutor2u. [online] Available at:
<https://www.tutor2u.net/business/reference/users-of-financial-accounts> [Accessed 4 January
2021].
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Accounting and costing for business

Assignment Cover Sheet

Qualification Module Number and Title

Student Name& No. Assessor

Hand out date Submission Date

I, ………………………………………….certify that the work submitted for this assignment is

Assessor: Thamara Ranasinghe

Strong features of your work:

Areas for improvement:

First of all, I am extremely thankful to my university “ICBT campus” providing me an

1.1. Ledger Account for Pat’s business as at 31.12.2019

1.2. Journals for Pat’s business as at 31.12.2019

1.3. Trial balance for Pat’s business as at 31.12.2019

2.2. Shane’s trading’s profit and loss account

2.3. Shane’s trading’s balance sheet

3. Identify and classify different type of cost of the new product

3.1. Direct material

3.2. Direct labor

3.3. Manufacturing overhead

4.1. Profit and loss account under absorption costing

4.2. Profit and loss account under Marginal costing

4.3. Profit Reconciliation

5.3. Direct Material Purchase budget

5.4. Direct labor budget

6.1. Material cost Variance and recommendation

6.2. Direct labor Variance and recommendation

6.3. Variable overhead Variance and recommendation

6.4. Fixed overhead Variance and recommendation

6.5. Sales Variance and recommendation

Ledger Account for Pat’s business as at 31.12.2019

Dr. Cash Account Cr.

29/12/2019 Debtors A/C 4,000.00 31/12/2019 Creditors A/C 6,000.00

29/12/2019 Debtors A/C 6,000.00 31/12/2019 Creditors A/C 8,000.00

31/12/2019 Balance C/F 1,000.00

Dr. Capital Account Cr.

01/01/2020 Balance B/F 10,000.00

Dr. Office Expenses account Cr.

24/12/2019 Cash A/C 5,000.00 31/12/2019 Balance C/F 5,000.00

Dr. Debtors Account Cr.

31/12/2019 Balance C/F 2,000.00

Dr. Creditors Account Cr.

31/12/2019 Cash A/C 6,000.00 31/12/2019 Purchase A/C 20,000.00

01/01/2020 Balance B/F 3,000.00

Dr. Purchase return account Cr.

31/12/2019 Balance C/F 3,000.00 31/12/2019 Purchase A/C 3,000.00

01/01/2020 Balance B/F 3,000.00

Dr. Purchase account Cr.

31/12/2019 Creditors A/C 20,000.00 31/12/2019 Balance C/F 20,000.00

Dr. Income Account Cr.

31/12/2019 Balance C/F 12,000.00 31/12/2019 Debtors A/C 12,000.00

01/01/2020 Balance B/F 12,000.00

Journals for Pat’s business as at 31.12.2019

Purchase return Journal

Trial balance for Pat’s business as at 31.12.2019

Financial accounting provides useful information for wide range of users

Customers and debtors

Shane’s trading’s profit and loss account

Shane’s trading’s balance sheet

Total asset 37,550.00

Unsolded inventory 01.04.2018 - TB 10,000.00

Trial Balance 2,000.00

W3 - Sales and Distribution expenses

Office furniture - TB 5,000.00

Standard outputstandard rate Actual outputactual rate