Comprehensive Example -2

Following are the transactions of A Hard worker for the first year ended
31 December 2021:
1) Purchased 50 units of goods from Noor trader Rs. 20,000 to be paid after 1 month.
2) Sold goods to Mr Ali Rs. 25,000, receiving 25% at spot and the balance after 15 days.
3) Plant costing Rs 15,000 was purchased by owner personally, and then he put it in business.
4) Rs. 25,000 were paid to Alpha traders for the acquisition of Computer.
5) Half of the amount due to Noor traders was settled after receiving 10% discount
6) Balance amount from Mr Ali was collected directly by owner in his personal account.
7) Paid Rs. 15,000 for overhauling of plant which increased its future capacity by 13.5%
8) 5 units purchased from Noor traders were returned, being defective, and remaining amount was
settled by the owner after availing 15.75% discount
9) Took loan from ASIA Bank on 1-7-2021 Rs. 125,000. (to be repaid in 5 equal installments)
10) Existing plant was disposed at a profit of 10%. Half of the amount was received by owner personally
and the balance was deposited in business account
11) Loan installment together with interest @ 10% was paid through cheque.

Requirement:
A)
 Prepare General Journal from the above transactions
 Prepare Accounting equation from the above data.

B)

What are the balances of the following ledgers at year ended 31 December, 2021 ?

Capital___________________________ Drawing______________________ Plant________________________

Purchases_______________________ Cash__________________________ Discount Allowed_________
Discount Received_____________ Loan_________________________ A/P Alpha traders________

Conceptual understanding
Cash in hand 50,000 Prepaid insurance 900
A/P 10,000 Bank overdraft 157,500
Rent expenses 15,000 Accrued interest 7,000
Advances from customers 14.000 Drawings 875
Building 85,000 Furniture 225,000

Required: Using Accounting Equation concept, calculate the following values at year end:

Capital___________________________ Current assets_______________ Current liabilities___________

Non-Current Assets___________ Trade creditors______________ Equity________________________

PRC-3 ABDUL SALAM SKANS SCHOOL OF ACCOUNTANCY