THE DENIM STORE

BY: MOMIN AHSAN, AHMAD FARHAN, IZZA SHAHZAD, HASAN MEHMOOD, SHAHZEB MOHSIN
 INTRODUCTION

We have chosen a denim merchandise company, The Denim Masters. They have partnered with several fashion
brands as their denim garments producer of choice. Using decades of tailoring expertise and old production
methods, they create handcrafted garments of high quality at a very competitive price.

THE DENIM STORE 2

 OPENING TRAIL BALANCE
Denim Masters
Trial Balance
May 1, 2020
Dr Cr
Cash 19251.2
Accounts Receivable 1638.4
Supplies 12204.11
Prepaid insurance 266.24
Prepaid Rent 819.2
Office Equipment 8717.19
Furniture 13947.54
Salaries Payable 942.08
Accumulated Depreciation 77.82
Accounts Payable 8294.4
Ibrar Khan , capital at 1 October 2020 47529.57
56843.88 56843.87

THE DENIM STORE 3

THE DENIM STORE

UNADJUSTED AND ADJUSTED TRAIL

BALANCE
Denim Masters Denim Masters
Unadjusted Trail Balance
Adjusted Trail Balance
May 31, 2020
May 31, 2020
Dr Cr
Cash 13456.8 Dr Cr
Sales 392626.4 Cash 13480.8
A/R 180426.4 Sales 393026.4
Purchase 17333.6 A/R 180426.4
Supplies 177746.4 Purchase 16833.6
A/P 124840 Supplies 177746.4
A/P 124840
Office Supplies 12927.2
Office Supplies 12927.2
Office Euipment 33200
Office Euipment 33200
Sales Return 13560 Sales Return 13560
Sales Discount 14960 Sales Discount 14960
Purchase Return 20800 Purchase Return 20800
Purchase Discount 5440 Purchase Discount 5440
Mis Exp 16392 Mis Exp 16392
Telephone exp 3600 Telephone exp 3600
Electricity Exp 24800 Electricity Exp 24800
Repair Exp 9080 Repair Exp 9080
Utility Exp 6400 Utility Exp 6400
Entertainemnet Exp 720 Entertainemnet Exp 720
Lighting Exp 2680 Lighting Exp 2680
Property Exp 9600
Property Exp 9600
Office Exp 500
Office Exp 424
Transportation Exp 4000
Transportation Exp 3200 Cable wire Exp 2000
Cable wire Exp 2000 Feul Exp 1200
Feul Exp 1200 Furniture Exp 8000
Furniture Exp 8000
Capital, Ibrar Khan 40000
Capital, Ibrar Khan 40000 Drawings, Ibrar Khan 32000
Drawings, Ibrar Khan 32000 584106.4 584106.4
583706.4 583706.4
4
 ADJUSTING ENTRIES

a) 29 th May Sale was done of 2000Rs, instead of Adjusting Entries

1600Rs
Dr Cr
Cash 400
b) 30 th May Supplies purchased of 7500Rs, instead
Sales 400
of 8000Rs 500
Cash
Purchase 500
c) 29 th May Office expense of 500Rs incurred Office Exp 76
instead of Rs424 Cash 76
Transportation Exp 800
Cash 800
d) 29 th May Transportation expense of 4000Rs
instead of 3200Rs

THE DENIM STORE 5

 GENERAL LEDGER
Account Transportation Account Fuel
Account cash Account no. 5
Expense Account no. 39 Expense Account no. 41
Balance
Balance Balance
Post Post
Date Item Post Ref. Debit Credit Debit Credit
Date Item Ref. Debit Credit Debit Credit Date Item Ref. Debit Credit Debit Credit
May 31 CR1 278440 278440
May 29 GJ39 3200 3200 May 29 GJ41 1200 1200
31 CP1 264983.2 13456.8
Adjusting 800 4000
Adjusting 24 13480.8
Account Furniture
Account Cable wire Expense Account no. 42
Expense Account no. 40 Account Sales Account no. 12 Balance
Post
Balance Balance Date Item Ref. Debit Credit Debit Credit
Post
Date Item Ref. Debit Credit Debit Credit Date Item Post Ref. Debit Credit Debit Credit May 29 GJ42 8000 8000
May 29 GJ40 2000 2000 May 31 GJ12 392626.4 392626.4
Adjusting 400 393026.4 Account Ibrar Khan,
Account Purchase Capital Account no. 28
Return Account no. 30
Balance
Balance Post
Post Account Ibrar Khan , Drawings Account no.
Date Item Ref. Debit Credit Debit Credit
Date Item Ref. Debit Credit Debit Credit Balance May 26 GJ28 40000 40000
May 29 GJ30 4800 4800 Date Item Post Ref. Debit Credit Debit Credit
29 GJ30 12000 16800 May 4 GJ18 16000 16000
29 GJ30 4000 20800 31 GJ18 16000 32000

THE DENIM STORE 6

 SUBSIDIARY LEDGER
Name: Umar Saif Name: Slico
Balance Balance
Date Item Post Ref. Debit Credit Debit Credit Date Item Post Ref. Debit Credit Debit Credit
May 29 GJ33 12000 12000 May 22 GJ25 12000 12000

Name: Sheikh Muhammad

Balance Name: JJ Textile
Date Item Post Ref. Debit Credit Debit Credit Balance
May 11 GJ22 6000 6000 Date Item Post Ref. Debit Credit Debit Credit
20 GJ22 1600 4400 May 3 GJ16 17066.4 17066.4
25 GJ16 4000 21066.4

Name: Azmat Cheema

Balance
Date Item Post Ref. Debit Credit Debit Credit
Name: Master Textile
May 3 GJ13 3360 3360
Balance
11 GJ13 20000 23360
19 GJ13 2800 20560 Date Item Post Ref. Debit Credit Debit Credit
24 GJ13 48000 68560 May 26 GJ26 13880 13880
29 GJ13 2400 70960 29 GJ26 13840 40

THE DENIM STORE 7

 SPECIAL JOURNALS
Purchase Journal Sales Journal
Accounts Other
Account Post
Date Accounts Credited Post Reference Payable Accounts
Credit Debited Reference Accounts Receivable-Debit
May 3 Al-Madina Traders ü 1333.6 Sales-Credit
3 Kalstec . ü 8000
May 1 Mush Mush GJ1 40,000
3 AR Textile ü 17,066.4
10 GKK ü 17,200
2 Khalid Mohsin GJ9 3,600

22 Slico ü 12000 3 Azmat Cheema GJ13 3,360

24 Kalstec . ü 800 7 Al-Fatah GJ21 8266.4
25 JJ Textile ü 4000
11 Sheikh Muhammad GJ22 6,000
25 Agara ü 8000
26 Masters Textile ü 13880
11 Azmat Cheema GJ13 20000

27 Sam Enterprise ü 17600 24 Azmat Cheema GJ13 48000

29 Jennie Enterprise ü 28000 29 Umar Saif GJ33 12000
29 SL Traders ü 20000
29 Azmat Cheema GJ13 2400
31 Kalstec . ü 8000
29 Saleem Butt GJ38 48000
155880.0
191,626

THE DENIM STORE 8

 SPECIAL JOURNALS
Cash Receipt Journal CR1
Sales
Account Receivables Capital,
Date Accounts Credited P/R Cash (Dr.) Discount Sales (Cr.) Other Accounts (Cr.)
(Cr.) Ibrar Khan
(Dr.)
May 1 Sales GJ12 16000 1200 17200
1 Sales GJ12 25600 1200 26800
1 Sales GJ12 18800 1200 20000
1 Sales GJ12 21600 1200 22800
2 Sales GJ12 18000 4160 22160
3 Sales GJ12 25600 2800 28400
7 Sales GJ12 25800 2000 27800
10 Sales GJ12 30000 30000
11 Purchase Discount GJ23 5400
16 Sales GJ12 6400 2400 8800
19 Azmat Cheema GJ13 2800 2800
19 Al-Fatha GJ21 4000 4000
20 Sheikh Muhammad GJ22 1600 1600
26 Al-Fatha GJ21 2800 2800
27 Capital, Ibrar Khan GJ28 40000 40000
29 Purchase Discount GJ23 40
29 Purchase Return: Sam Enterprises GJ30 4800
29 Purchase Return: Jennie Enterprise GJ30 12000
29 Sales GJ12 2000 2000
29 Purchase Return GJ30 4000
29 Sales GJ12 4800 4800
29 Sales GJ12 4800 4800
29 Sales GJ12 1600 1600
278440 16160 11200 203960

THE DENIM STORE 9

 INCOME STATEMENT
The Denim Store
Income Statement
May 31,2020

Revenue:
Sales revenue 393026.4
less: Sales return and allowance 13560
Sales discounts 14960 28520
Net Sales 364506.4
Cost of merchandise sold 195080
Gross Profit 169426.4
Operating Expenses:
Mis Exp 16392
Telephone exp 3600
Electricity Exp 24800
Repair Exp 9080
Utility Exp 6400
Entertainemnet Exp 720
Lighting Exp 2680
Property Exp 9600
Office Exp 424
Transportation Exp 3200
Cable wire Exp 2000
Feul Exp 1200
Furniture Exp 8000
Feul Exp 1200
Furniture Exp 8000
Total operating expense 97296
Income from operations 72130.4
Net Profit 72130.4

THE DENIM STORE 10

 OWNER’S EQUITY STATEMENT

The Denim Store

Statement of Owner's Equity
May 31, 2020

Ibrar Khan , Capital at May 1,2020 56843.9

Net profit 72130.4
Add: Additional Capital 40000
112130.4
Less: Ibrar Khan , Drawings 32000

Increase in owner's equity 80130.4

Ibrar Khan , Capital at May 31, 2020 136974.3

THE DENIM STORE 11

 BALANCE SHEET
The Denim Store
Balance Sheet
May 31,2020

Assets
Current Assets:
Cash 13480.8
Accounts Receiveable 180246.4
Merchandise Inventory 16000
Prepaid Insurance 7200
Total Current Assets 216927.2
Land, Property and Equipment:
Office Equipments 33200
Less: Accumulated Depreciation-Office Equipment 5520 27680
Furniture 8000
Total Land, property and Equipment 35680
Total Assets 252607.2
Liabilities
Current Laibility:
Acounts Payable 124840
Salary Payable 6000
Total Liabilities 130840
Owner's Equity
Ibrar Khan , Capital at May 31,2020 136974.3
Total liabilities and owner's equity 267814.3

THE DENIM STORE 12

 CLOSING TRAIL BALANCE
The Denim Store
Post-Closing Trial Balance
May 31, 2020

Dr Cr
Cash 13480.8
Accounts Receivable 180426.4
Supplies 177746.4
Prepaid insurance 7200
Office Equipment 33200
Furniture 8000
Salaries Payable 26000
Accumulated Depreciation 5520
Accounts Payable 124820
Ibrar Khan , capital at 31 October 2020 136974.3
420053.6 293314.3

THE DENIM STORE 13