Fundamentals of Accounting(MGT-205)

Project: Smart Meals Limited

BY

Submitted by: Group 2

Rawaha Zaib 19011519-047

Faiza Iftikhar 19011519-054

Humaira Akhter 19011519-055

Asif Imran 19011519-134

TO

Submitted to: Ma’am Sadia Tasaddaque

Bachelor of Computer Science

University Of Gujrat (Hafiz Hayat Campus)

March 18th, 2022

Smart Meals LTD
Smart Meals is a leading nutrition, health and wellness company.

 Mission

Our mission is to provide "A Shop where You Can Find Healthy" is to
provide consumers with the best tasting, most nutritious choices in a wide range of
food and beverage categories and eating occasions, from morning to night. It is
active in dairy, confectionery, coffee, beverages, infant nutrition and bottled
drinking water areas. It is based in Lahore, Pakistan.

 Products
 Milk, milk-based products and cereals
 Beverages, juices and bottled drinking water
 Baby food, coffee and confectionery

 Visions

To be a leading, competitive, Nutrition, Health and Wellness Company

delivering improved shareholder value by being a preferred corporate citizen,
preferred employer, preferred supplier selling preferred products.

 Risk analysis

At this stage, we will review both the short-term and the long-term risk
situation of the firm in order to analyze the soundness of its investments and its
capacity to pay its payment obligations. In the short-term analysis we will
include figures like the cash ratio, the solvency and liquidity ratio comparison
and the availability ratio.

 Profitability analysis

We will mainly focus on analyzing Smart Meal’s capacity to obtain profits in

order to increase the shareholder’s value and its ability to keep a successful and
sustainable investment promotion.
Now, we will prepare the Financial Statement of Our business of Four Month
Accounting Period:

Transactions of Four Months:

Following are the transactions for the period April 2020 to July 2021 in the books of Smart
Meals Ltd.

Mr. Ahmed started business named Smart Meals Ltd. with cash 1,000,000, cash at Bank
1-Apr of Punjab 700,000.
4-Apr Loan taken from Bank of Punjab 200,000
4-Apr Purchased Machinery worth 300,000 by cheque.
5-Apr Purchased Goods from Ali Food Ltd worth 1,000,000 @20% trade discount.
7-Apr Cash Sales 500,000 @5% trade discount to XYZ Traders
10-Apr Deposited cash with Bank of Punjab 400,000.
15-Apr Paid Ali Food Ltd 300,000 in cash.
5-May Received commission 70,000 by cheque.
10-May Purchases Machinery of 250,000 on Cash.
15-May Sold goods to Raza Traders 300,000.
25-May Received 200,000 by cheque from Raza Traders.
5-Jun Purchased goods from Ali Food Ltd 50,000.
7-Jun Purchased Land of 200,000 on Cheque.
10-Jun Received commission 55,000 in cash.
12-Jun Paid Ali Food Ltd 70,000 by cheque.
15-Jun Received 100,000 in cash from XYZ Traders.
22-Jun Bank loan repaid 50,000.
25-Jun Cash Purchases 25,000.
28-Jun Sold goods to Raza Traders 50,000.
1-Jul Withdraw cash from bank 15,000.
5-Jul Received interest from bank 5,000.
7-Jul Purchased Insurance Policy of 1 year 700,000 on Cheque.
7-Jul Cash Sales 100,000.
10-Jul Deposited cash with Bank of Punjab 30,000.
15-Jul Cash Purchases 400,000.
18-Jul Bills Expense cash 50,000.
19-Jul Salaries Paid by Cheque 50,000.
20-Jul Sold goods to Raza Traders 600,000 @10% trade discount.
21-Jul Bank Loan Repaid 50,000.
General Journal:

In The book of Smart Meals

Date Particulars L.F Debit Credit
Mr.Ahmed started business named Smart
1- Meals Ltd with cash 1,000,000, cash at Bank
Apr of Punjab 700,000.
Cash A/c Dr. 1,000,000
Bank of Punjab A/c Dr. 700,000
To Smart Meal Ltd.’s Capital A/c 1,700,000
4-
Loan taken from Bank of Punjab 200,000
Apr
200,000
Bank of Punjab A/c Dr.
To Bank Loan A/c
200,000
4- Purchased Machinery worth 300,000 by
Apr cheque.
Machinery Dr. 300,000
To Bank of Punjab A/c 300,000
5- Purchased goods from Ali Food Ltd worth
Apr 1,000,000 @20% trade discount.
Purchases A/c Dr. 800,000
To Ali Food Ltd A/c 800,000
7- Cash Sales 500,000 @5% trade discount to
Apr Raza Traders
Cash A/c Dr. 475,000
To Sales A/c 475,000
10- Deposited cash with Bank of Punjab 400,000.
Apr
Bank of Punjab A/c Dr. 400,000
To Cash A/c 400,000
15-
Apr Paid Ali Food Ltd 300,000 in cash.
Ali Food Ltd A/c Dr. 300,000
To Cash A/c 300,000
5-
May Received commission 70,000 by cheque.
Bank of Punjab A/c Dr. 70,000
To Commission received A/c 70,000
10-
Purchases Machinery 250,000 on Cash.
May
Machinery A/c Dr. 250,000
To Cash A/c 250,000
15- Sold goods to Raza Traders 300,000.
May
Raza Traders A/c Dr. 300,000
To Sales A/c 300,000
25- Received 200,000 by cheque from Raza
May Traders.
Bank of Punjab A/c Dr. 200,000
To Raza Traders A/c 200,000
5-Jun Purchased goods from Ali Food Ltd 50,000.
Purchases A/c Dr. 50,000
To Ali Food Ltd A/c 50,000
7-Jun Purchased Land of 200,000 on cheque.
Land A/c Dr. 200,000
To Bank of Punjab A/c 200,000
10-
Jun Received commission 55,000 in cash.
Cash A/c Dr. 55,000
To Commission received A/c 55,000
12-
Jun Paid Ali Food Ltd 70,000 by cheque.
Ali Food Ltd A/c Dr. 70,000
To Bank of Punjab A/c 70,000
15-
Jun Received 100,000 in cash from Raza Traders.
Cash A/c Dr. 100,000
To Raza Traders A/c 100,000
22-
Jun Bank loan repaid 50,000.
Bank Loan A/c Dr. 50,000
To Bank of Punjab A/c 50,000
25-
Cash Purchases 25,000.
Jun
Purchases A/c Dr. 25,000
To Cash A/c 25,000
28- Sold goods to Raza Traders 50,000.
Jun
Raza Traders A/c Dr. 50,000
To Sales A/c 50,000
1-Jul Withdraw cash from bank 15,000.
Cash A/c Dr. 15,000
To Bank of Punjab A/c 15,000
5-Jul Received interest from bank 5,000.
Bank of Punjab A/c Dr. 5,000
To Interest received A/c 5,000
Purchased Insurance Policy of 1 year 700,000
7-Jul on Cheque.
 Insurance A/c Dr. 700,000
To Bank of Punjab A/c 700,000
7-Jul Cash Sales 100,000.
Cash A/c Dr. 100,000
To Sales A/c 100,000
10- Deposited cash with Bank of Punjab 30,000.
Jul
Bank of Punjab A/c Dr. 30,000
To Cash A/c 30,000
15-
Cash Purchases 400,000.
Jul
Purchases A/c Dr. 400,000
To Cash A/c 400,000
18- Bills Expense of 3 months is 50,000 paid in
Jul Cash.
Bills Expense Dr. 50,000
To Cash A/c 50,000
19-
Jul Salaries Paid by Cheque 50,000.
Salary A/c Dr. 50,000
To Bank of Punjab A/c 50,000
20- Sold goods to Raza Traders 600,000 @10%
Jul trade discount.
Raza Traders A/c Dr. 540,000
To Sales A/c 540,000
21-
Jul Bank loan repaid 50,000.
Bank Loan A/c Dr. 50,000
To Bank of Punjab A/c 50,000
Ledger (T-Accounts):

Smart Meals Ltd.’s Capital A/c

Date Particulars Amount Date Particulars Amount
1-Apr By Cash A/c 1,000,000

1-Apr By Bank of Punjab A/c 700,000

31-Jul To Balance c/d 1,700,000
Total 1,700,000 Total 1,700,000

Purchases A/c
Date Particulars Amount Date Particulars Amount
5-Apr To Ali Food Ltd A/c 800,000
5-Jun To Ali Food Ltd A/c 50,000
25-Jun To Cash A/c 25,000
15-Jul To Cash A/c 400,000
31-Jul By Trading A/c 1,275,000
Total 1,275,000 Total 1,275,000

Sales A/c

Date Particulars Amount Date Particulars Amount

7-Apr By Cash A/c 475,000

15-May By Raza Traders A/c 300,000

28-Jun By Raza Traders A/c 50,000

7-Jul By Cash A/c 100,000

20-Jul By Raza Traders A/c 540,000

31-Jul To Trading A/c 1,465,000

Total 1,465,000 Total 1,465,000

 Bills Expense A/c

Date Particulars Amount Date Particulars Amount

1-Apr By Cash A/c 50,000

31-Jul By Balance c/d 50,000

Total 50,000 Total 50,000

Machinery A/c
Date Particulars Amount Date Particulars Amount
4-Apr To Bank of Punjab A/c
300,000
10-May to Cash A/c
250,000
31-Mar By Balance c/d
550,000
Total Total
550,000 550,000

Ali Food Ltd (Creditor) A/c

Date Particulars Amount Date Particulars Amount
15-Apr To Cash A/c 5-Apr By Purchases A/c
300,000 800,000
12-Jun To Bank of Punjab A/c 5-Jun By Purchases A/c
70,000 50,000
31-Jul To Balance c/d
480,000
Total Total
850,000 850,000

Raza Traders (Debtor) A/c

Date Particulars Amount Date Particulars Amount
15-May To Sales A/c 15-Jul By Bank of Punjab A/c
300,000 200,000
28-Jun To Sales A/c 15-Jun By Cash A/c
50,000 100,000
2-Jul To Sales A/c
540,000
31-Jul By Balance c/d
590,000
Total 890,000 Total 890,000
 Bank Loan A/c
Date Particulars Amount Date Particulars Amount
22-Jun To Bank of Punjab A/c 4-Apr By Bank of Punjab A/c
50,000 200,000
21-Jul To Bank of Punjab A/c
50,000
31-Jul To Balance c/d
100,000
Total Total
200,000 200,000

Land A/c

Date Particulars Amount Date Particulars Amount

7-Jun To Bank of Punjab A/c 200,000

31-Jul By Profit & Loss A/c 200,000

Total 200,000 Total 200,000

Salary A/c

Date Particulars Amount Date Particulars Amount

19-Jul To Bank of Punjab A/c 50,000

31-Jul By Profit & Loss A/c 50,000

Total 50,000 Total 50,000

Insurance A/c

Date Particulars Amount Date Particulars Amount

7-Jul To Bank of Punjab A/c 700,000

31-Jul By Profit & Loss A/c 700,000

Total 700,000 Total 700,000

 Interest Received A/c

Date Particulars Amount Date Particulars Amount

5-Jul By Bank of Punjab 5,000

A/c
31-Jul To Profit & Loss A/c 5,000

Total 5,000 Total 5,000

Commission Received A/c

Date Particulars Amount Date Particulars Amount
5-May By Bank of Punjab 70,000
A/c
10-Jun By Cash 55,000
31-Jul To Profit & Loss A/c 125,000
Total 125,000 Total 125,000

Cash A/c

Date Particulars Amount Date Particulars Amount

1-Apr To Smart Meals Ltd.’s Capital A/c 1,000,000 10-Apr By Bank of Punjab A/c 400,000
7-Apr To Sales A/c 475,000 15-Apr By Ali Food Ltd A/c 300,000
10-Jun To Commission Received A/c 55,000 10-May By Machinery A/c 250,000

15-Jun To Raza Traders A/c 100,000 25-Jun By Purchases A/c 25,000

1-Jul To Bank of Punjab A/c 15,000 10-Jul By Bank of Punjab A/c 30,000

7-Jul To Sales A/c 100,000 15-Jul By Purchases A/c 400,000

18-Jul By Bills Expense A/c 50,000

31-Jul By Balance c/d 290,000

Total 1,745,000 Total 1,745,000

 Bank of Punjab A/c
Date Particulars Amount Date Particulars Amount
1-Apr To Smart Meals Ltd.’s Capital A/c 700,000 4-Apr By Machinery 300,000
A/c
10-Apr To Cash A/c 200,000 7-Jun By Land A/c 200,000
5-May To Commission Received A/c 70,000 22-Jun By Bank Loan A/c 50,000
25- To Raza Traders A/c 200,000 1-Jul By Cash A/c 15,000
May
4-Apr To Bank Loan A/c 400,000 19-Jul By Salary A/c 50,000
5-Jul To Interest Received A/c 5,000 12-Jun By Ali Food Ltd 70,000
A/c
10-Jul To Cash A/c 30,000 7-Jul By Insurance A/c 700,000
21-Jul By Bank Loan A/c 50,000
31-Jul By Balance c/d 170,000
Total 1,605,000 Total 1,605,000
Trial Balance:

Trial Balance as on 31st July 2020

Particulars Debit Credit
Smart Meals Ltd.’s Capital 1,700,000
Purchases 1,275,000
Sales 1,465,000
Bills 50,000
Machinery 550,000
Ali Food Ltd (Creditor) 480,000
Raza Traders (Debtor) 590,000
Bank Loan 100,000
Salary 50,000
Insurance 700,000
Commission Received 125,000
Interest Received 5,000
Cash in hand 290,000
Bank of Punjab 170,000
Land 200,000
Total 3,875,000 3,875,000
Adjusting Entries:

Adjusting Entries
a) Building Maintenance on Cash Amounted 3600 .

b) Rent Expense Incurred amount 3000 but not yet paid.

c) Salaries earned by employees during the month but not yet recorded or paid amounted
25000
d) Useful life of Machinery is 10 years.

e) No entry is made to record transporting goods to Ali Food Ltd., Freight revenue Earned
35000 in May from Ali Food Limited.
f) Land is being Depreciated over a period of 5 years.

g) Unpaid Bills as of July 31 expense amounts to 10000.No entry have yet been made to
record its liability or Expense.

Adjusted Journal:

Entries Particulars Debit Credit

a Building Expense A/c 3600

to Cash A/c 3600
b Rent Expense A/c 3000
to Rent Payable A/c 3000
c Salaries Expense A/c 50000
to A/P 50000
d Depreciation Expense A/c 18332
To Accumulated Depreciation(Machinery) 18332
e A/R 35000
to Freight Revenue A/c 35000
f Land Depreciation Expense A/c 6666
To Accumulated Depreciation(Land) 6666
g Bills Expense 10000
to Bills Payable 10000
Adjusted Trial Balance:

Adjusted Trial Balance as on 31st July 2020

Trial Balance Adjusted Entries
Particulars Debit Credit Debit Credit
Smart Meals Ltd.’s Capital 1,700,000
Purchases 1,275,000
Sales 1,465,000
Bills Expense 50,000 10,000
Machinery 550,000
Ali Food Ltd (Creditor) 480,000
Raza Traders (Debtor) 590,000
Bank Loan 100,000
Salaries Expense 50,000 25,000
Insurance 700,000
Commission Received 125,000
Interest Received 5,000
Cash in hand 290,000 3,600
Bank of Punjab 170,000
Land 200,000
Building Expense 3,600
Rent Expense 3,000
Rent Payable 3,000
A/P 25,000
Machinery Depreciation Exp 18,332
Accumulated 18,332
Depreciation(Machinery)
A/R 35,000
Freight Revenue 35,000
Land Depr. Expense 6,666
Accumulated Depreciation(Land) 6,666
Bills Payable 10,000
Total 3,875,000 3,875,000 101,598 101,598
Income Statement:

On July 31st, Stock is closing at 200,000, Cash in Hand is 286,400

[290,000-3600=286,400].

Trading Account
For the Period Ended 31st July,2021
Particulars Amount Amount Particulars Amount Amount
To Purchases 1,275,000 By Sales 1,465,000
By Closing Stock 200,000
To Gross 390,000
Profit c/d
Total 1,665,000 Total 1,665,000

Profit & Loss Account

For the Period Ended 31st July,2021
Particulars Amount Amount Particulars Amount Amount
To Salaries 50,000 By Gross Profit b/d 390,000

50,000 By Commission 125,000

Received
Insurance 700,000 By Interest 5,000
Received
To Depreciation:
Land 6,666
Machinery 18,332
Building 3,600
Expense
Rent Expense 3,000
Bills Expense 50,000 81,598
To Net Profit c/d (311,598)
Total 520,000 Total 520,000
Balance Sheet:

Balance Sheet
As on Period Ended 31st July,2021
Liabilities Amount Amount Assets Amount Amount
Capital & Reserves Non-Current
Assets
Opening Capital 1,700,000 Tangible Assets
Add: Net Profit (311,598) 1,388,402 Machinery 550,000
Less: Depreciation 18,332 531,668
Non-Current Land 200,000
Liabilities
Bank Loan 100,000 Less: Depreciation 6,666 193,334

Current Liabilities Current Assets

Ali Food Ltd.'s 480,000 Cash in Hand 286,400
Creditors
Bills Payable 10,000 Cash at Bank 170,000
A/P 25,000 Raza Traders 590,000
Debtors
Rent Payable 3,000 Closing Stock 200,000
A/R 35,000
Total 2,006,402 Total 2,006,402

---------------------------------THE END-------------------------------------