Advanced Financial Accounting FIN-611

Mian Ahmad Farhan Lecture-2 Single Entry

Statement of Affairs
Assets
Furniture & Fixture Equipments Stock Debtors Prepaid expenses Bank balance Cash Amount (Rs) xxx xxx xxx xxx xxx xxx xxx

Liabilities
Loan Creditors Payable expenses Owners equity/Net Assets (Balancing figure)

Amount (Rs) xxx xxx xxx xxx xxx

xxx

xxx

Question
Capital 31-12-2007 Capital 31-01-2007 Rs. 18,700 19,200

Loan to brother
Personal expenses Pay to family member Electricity charges Investment in securities At 3% premium Fresh capital 2,000 60 2,060

3,500
300 per month 100 per month 10 per month

Solution
Working note of drawings:
Loan to brother Personal expenses Pocket money to family relative Electricity charges 3,500 3,600 1,200 120 8,420

Company Name Statement of Profit & Loss For the year ended 31-12-2007
Closing capital Add Drawings Less Fresh capital Opening capital 2,060 19,200 18,700 8,420 27,120

21,260 5,860

Name of the Organization Statement of Affairs As on Opening and Closing Date

Assets
Furniture & Fixture Stock Debtors (Net of provision) Prepaid expenses Bank Cash

Opening Closing

Liabilities
Loan Creditors Accured expenses Owners equity/Net Assets

Opening Closing

xxx xxx xxx xxx xxx xxx

xxx xxx xxx xxx xxx xxx

xxx xxx xxx xxx

xxx xxx

xxx

xxx

xxx

xxx

xxx

Question
Assets
Furniture Stock

1st April 2007

6,900 30,300

31st March 2008

9,000 40,320

Debtors
Cash Prepaid rent Total

25,350
-----7,450 70,000

36,900
400 6,580 93,200

Liabilities
Creditors Accrued expenses

1st April 2007

16,500 3,500

31st March 2008

18,600 4,300

Owners Equity/Net Assets

Question
Drawings On cash Goods from business Introduce personal furniture in business (Fresh capital)

15,000 600 15,600

2,100

Solution
Opening Capital 1st April 2007 Assets (Rs) Furniture Stock Debtors Cash Prepaid rent Total Liabilities (Rs) Creditors Accrued expenses Total 16,500 3,500 6,900 30,300 25,350 -----7,450 70,000 Closing Capital 31st march 2008 Assets (Rs) 9,000 40,320 36,900 400 6,580 93,200 Liabilities (Rs) 18,600 4,300

20,000

22,900

Owners Equity/Net Assets

50,000

70,300

Company Name Statement of Profit & Loss For the year ended 31-03-2008

Closing capital Add Drawings Less Fresh capital Opening capital

Rs. 70,300 15,600 85,900 2,100 50,000 52,100 33,800

Practice Question

Additional information: 1. Furniture and fixture is subject to depreciation of 10% per annum. Assuming that full depreciation will be charged for any addition during the year. 2. Provision of doubtful debts is to be incurred up to 5% of the debtors