Accounting and Finance Sample Assignment

Introduction

Basic principle of an accounting systems are preparation of Journal, ledger and trial balance. Posting of a financial event of a company is known as journal entry. In this study journal, ledger and trial balance of Smart IT Company has to be prepared. This preparation is based on financial events that have been taken place in the financial year 2017. An explanation of journal entry has to be providing on this basis.

Findings and analysis

In the month of May of 2017, some events have been occurred in Smart IT Company. A journal entry has to prepare of the individual event. Journal entries have been prepared in order to keep record of financial events.

Preparation of journal entries

Following is a presentation of Journal Entry based on financial; event of Smart IT company.

In the books of Smart IT

Journal entries

As on 30.2017

Date	Particulars	Amount ($)(Debit)	Amount ($)(credit)
May 1	Cash Account To Capital Account [Being Smart IT Company has started 12 more new websites and that has amounted to $9000	9000	9000
Explanation:	Smart ITC company has started 12 more websites and $9000 has been charged from the client]
May 2	Bank Account To Purchase Account [Being Smart It company purchase Supplies]	140	140
Explanation	Being company has invested some amount of cash for business purchase
May 3	Cash account To, Furniture Account Transportation Cost Account [Company has purchased furniture for business purpose and an addition amount of transportation cost of $ 150 has to pay on that.]	1350	1200 150
Explanation:	Company has purchased furniture and an additional amount of transportation cost has been paid on that
May 4	Advertising Account To Australia Daily [Being an invoice of $3500 has been received from Australia Daily for advertisement purpose]	3500	3500
Explanation:	Company has spend $3500 for advertisement purpose to Australian Daily
May 5	ICT Mart Account (10043+234) To Bank Account [Being the company has purchased 83 keyboards for $121 and nine flash drivers for $ 26 each, the transaction has been done on account]	10377	10377
Explanation:	For business purpose company has purchased keyboard and flashlight from ICT Mart
May 6	Sales To Cash account [being Smart IT company has been sold 98 Keyboards of $14700 and 100 flashlight for $3000](computation refers to Spreadsheet calculation)	1740600	1740600
Explanation	Company has sold out sold out 98 keyboards and 100 flashlights
May 8	Accounts Receivable Account To Cash Account [Being Smart It has been collected $9000 as accounts receivable]	9000	9000
Explanation	Company has collected a cash of $9000 on accounts receivable
May 10	Cash To Rent Account Other Expenses Account [Being the company has been paid rent of $500 and other expenses of $105](Computation refers to spreadsheet calculation]	655	500 105
Explanation	Rent and other expenses has been paid by the company
May 12	Cash Account To Accounts Payable Account [Being accounts payable has been made by the company]	2100	2100
Explanation
May 14	Sales Account To Cash Account [Being company has sold 250 secures for $14](Calculation refers to spreadsheet]	3500	3500
Explanation	Sales of $3500 has been take place
May 17	Cash To Salaries account [Being salary of $750 has been paid to Chris, out of which net pay of to PAYGW is $150]	750	750
Explanation	Company has paid salary to Chris
May 19	Cash To Salaries Account [Being due salary of $100 has been paid of in this month]	100	100
Explanation	Company has paid salary of previous month
May 20	Cash To Salary Account [Being salary of $2800 has been paid to Lemon and Nancy for their work, PAYGW net of is $590	2800	2800
Explanation	Company has paid salary to Lemon and Nancy
May 22	Cash Account To Bank Loan Account Interest Payable [Being Loan amount of $3000 for the month of April and Interest amount of $45 for the month of April has been paid in May][Computation is based on spreadsheet calculation]	3045	3000 45
Explanation	Company has paid their loan and interest
May 25	Cash To Australia Daily account [Being An invoice amount of $3500, which was due of Australia Daily for advertisement purpose that has been paid of]	3500	3500
Explanation	Payment has been done to Australian Daily
May 28	ITC Mart Account Discount Account To Cash account [Being due payment of ITC Mart for purchasing keyboard and flash Drive on 5 may has been paid off in the current month][based on spreadsheet calculation]	10147 230	10377
Explanation	Discount of $230 has been allowed to ITC mart for an early payment

Preparation of ledger

Following is a preparation of Ledger Accounts based on the above recorded transactions

Capital Account

Date	Particulars	Amount($)(Debit)	Date	Particulars	Amount($) (Credit)
May 1	By Cash Account	9000

Cash Account

May

Particulars

Amount($)(Debit)

May

Particulars

Amount($) (Credit)

17,19,20

To Capital Account

To Furniture Account

To Rent Account

To Salaries Account

To Accounts Payable

To Bank Loan

To Interest Payable

To Australia Daily account
To balance b/d

Total

9000

2100

655

3650
2100

3000

1740177

23300

1763477

By Sales Account

By Accounts Receivable

Sales Account

By ITC Mart Account

By Discount Account

Total

1740600

9000

3500

10147

230

1763477

Bank Account

Date

Particulars

Amount($)(Debit)

Date

Particulars

Amount($) (Credit)

May 2

To Purchase Account

To balance b/d

Total

140

10237

10377

May 5

By ICT Mart Account

Total

10377

Purchase Account

Date

Particulars

Amount($)(Debit)

Date

Particulars

Amount($) (Credit)

To balance b/d

Total

140

May 2

By Bank Account

Total

140

Furniture Account

Date

Particulars

Amount($)(Debit)

Date

Particulars

Date

Amount($)(Credit

May 3

To balance b/d

Total

1200

By Cash Account

Total

1200

Transportation cost Account

Date

Particulars

Amount($)(Debit)

Date

Particulars

Amount($) (Credit)

May 1

To balance b/d

Total

150

By Cash Account

Total

150

Advertising Account

Date

Particulars

Amount($)(Debit)

Date

Particulars

Amount ($) (Credit)

May 4

To Australian Daily Account

Total

3500

By balance b/d

Total

3500

Australia Day Account

Date	Particulars	Amount($)(Debit)	Date	Particulars	Amount($) (Credit)
May 25	To cash Account	3500	May 4	By advertisement Account	3500
Total	3500	Total	3500

ICT Mart Account

Date

Particulars

Amount($)(Debit)

Date

Particulars

Amount($) (Credit)

May 5

To bank Account

10377

May 28

By Cash Account

By balance b/d

10147

230

Total

10377

Total

10377

Sales Account

Date

Particulars

Amount($)(Debit)

Date

Particulars

Amount($) (Credit)

May 6

To balance b/d

10377

May 14

By cash Account

cash Account

by cash Account

3500

6877

Total

10377

Total

10377

Accounts Receivable Account

Date	Particulars	Amount($)(Debit)	Date	Particulars	Amount($) (Credit)
May 8	To Cash Account	9000	By balance b/d	9000
Total	9000	Total	9000

Rent Account

Date	Particulars	Amount($)(Debit)	Date	Particulars	Amount($) (Credit)
May 10	To cash	500	By balance b/d	500
Total	500	Total	500

Accounts Payable

Date	Particulars	Amount($)(Debit)	Date	Particulars	Amount($) (Credit)
To balance b/d	2100	May 12	By Cash Account	2100
Total	2100

Salary Account

Date

Particulars

Amount($)(Debit)

Date

Particulars

Amount($) (Credit)

May 17

May 19

May 20

To cash Account

750

100

2800

By balance b/d

3650

Total

3650

Total

3650

Discount Account

Date	Particulars	Amount($)(Debit)	Date	Particulars	Amount($) (Credit)
To balance b/d	230	May 28	By Cash Account	230
Total	230	Total	230

Other Expenses

Date	Particulars	Amount($)(Debit)	Date	Particulars	Amount($) (Credit)
May 10	To Cash Account	105	By balance b/d	105
Total	105	Total	105

Bank Loan Account

Date	Particulars	Amount($)(Debit)	Date	Particulars	Amount($) (Credit)
May 22	To cash Account	3000	By balance b/d	3000
Total	3000	Total	3000

Interest

Date	Particulars	Amount($)(Debit)	Date	Particulars	Amount($) (Credit)
May 22	To cash Account	45	By balance b/d	45
Total	45	Total	45

Preparation of trial balance 300

A Trial balance has been presented below based on the journal entry and trial balance.

SMART IT

Trial Balance

As on May 30, 2017

Asset	Amount	Liabilities	Amount
Current Account	Current
Cash at bank	10377	Accounts payable	2100
Accounts Receivable	9000	Salaries payable	3650
Suppliers inventory	10377	interest payable	45
Property plant and equipment	Non current
Furniture	1200	Bank Loan	3000
Owners equity
Noncurrent Asset	Capital Stock	22159
Investment
Total Asset	30954	Total Liabilities	30954

Conclusion

A brief presentation of Journal entry, ledger account and trial balance has been done above. From their presentation it can be concluded that the company is in a profitable condition and sale of the company is increasing. The transactions of May has been recorded in the journal entry and based on those transactions ledger accounts has been made. Finally a trial balance has been presented.

Bibliography

Gitman, L.J., Juchau, R. and Flanagan, J., 2015. Principles of managerial finance. Pearson Higher Education AU.

Nash, P., 2018. Balance Sheet Substantiation and Analysis. Effective Product Control‐Controlling for Trading Desks, First Edition, pp.243-255.

Shoup, C., 2017. Public finance. Routledge.

Gurskaya, M., Kuter, M. and Andreenkova, A., 2017, December. The Analysis of the Final “Debtors” Section Page Preparation in the Trial Balance of Giovanni Farolfi’s Company Branch Office. In International Conference on Information Technology Science (pp. 185-194). Springer, Cham.

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