Financial Accounting

ASSIGNMENT-2
Weightage: 30%

Name: Enter your name here Semester Roll. No.

Q.No.1.
Izyan, owner of Izyan Traders, prepared the following Trail Balance on December 31, 20X7
Izyan Traders
Trial Balance
December 31, 20X7
Rs. Rs.
Accounts
Debit Credit
1 Cash in hand 1,768,000
2 Cash at bank 2,431,000
3 Inventory 1,989,000
4 Accounts Receivable 8,840,000
5 Provision for Doubtful debts 1,326,000
6 Prepaid Expense 663,000
7 Land 24,310,000
8 Electricity Generator 1,326,000
9 Accumulated Depreciation - Electricity Generator 442,000
10 Office Supplies 663,000
11 Office Equipment 1,768,000
12 Accumulated Depreciation - Office Equipment 663,000
13 Car 884,000
14 Accumulated Depreciation - Car
15 Izyan's Capital 37,587,900
16 Izyan's Drawings 1,547,000
17 Accounts Payable 663,000
18 Bank overdraft 221,000
19 Salaries Payable 442,000
20 Bank Loan (10 years) 1,989,000
21 Bonds Payable 884,000
22 Sales 22,100,000
23 Sales Tax 3,757,000
24 Return inwards 1,547,000
25 Return outwards 1,326,000
26 Purchases 6,630,000
28 Carriage inward 221,000
29 Carriage Outward 442,000
30 Commission to Distributing agents 663,000
31 Rent Expense 1,768,000
32 Salaries Expense 3,094,000
33 Utilities Expense 1,547,000
34 Depreciation Expense - Electricity Generator
35 Depreciation Expense - Office Equipment
36 Depreciation Expense - Car
37 Interest Expense 442,000
38 Tax Expense 663,000
39 Bad Debts 884,000
40 Interest earned 221,000
41 Other Income ---
42 Other Expenses ---
43 Suspense Account 17,900
Total 67,864,900 67,864,900

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 Financial Accounting
ASSIGNMENT-2
Weightage: 30%

Additional Information:-
1) Sales have been overstated by Rs. 120000
2) A payment to supplier through cheque has been entered into books as Rs. 26100 instead of
Rs. 21600
3) Izyan withdrew Rs. 10000 for his personal use both cash in hand and drawings amount had
been credited with the amount
4) Purchase of office supplies Rs. 90000 has been debited to utilities expense account
5) carriage inwards of Rs. 15000 have been posted to carriage outwards account
6) A purchase of Rs. 110000 was recorded correctly into cash account but got purchases account
was debited by Rs. 11000 only
7) Advance payment of Rent of Rs. 30000 has been recorded in rent expense account
8) Bad debt of Rs. 7000 were recorded as if the company is following direct write-off method but
in actual company follows provision method.
9) Bad debt of Rs. 20000 has not been recorded
10) The electricity generator was sold on 1st May for cash (60% of its cost) but no entry was
passed in this regard. It has been depreciated throughout its life at 18% under double
declining method.
11) Car was purchased on September 30, 2017, its useful life is 6 years and company has decided
to use double declining method for its depreciation
12) Scrap value of office equipment is around 20% of its cost with its useful life being 10 years.
13) A debt of Rs. 10000 which was written off was partially recovered when debtor volunteered
to pay 70% of the liability.
14) Company's policy is to have provision for doubtful debts equal to 10% of its credit sales.
During the year 70% of the sales remained cash sales
15) Closing Inventory was double than the opening inventory
Requirements:-
i. Pass the necessary Journal Entries
ii. Prepare ledger accounts where needed to avoid complications e.g. Suspense, Disposal,
Provision for Doubtful debts, Accumulated Depreciation of the disposed asset etc.
iii. Prepare Adjusted Trail Balance and Classified Income Statement and Balance Sheet

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