Transactions

Invest Equity of 250000$

Preliminary transaction 2500$ depreciated over 10 years
Buy machinary 70000$ depreciable over 10 years
Buy Land for 10000$
Pay 6000$ for renting a building which includes 3000$ of first
month rent and 3000 for security deposit
Purchase office equipment worth 3000$ out of which
equipment worth 2000$ is depreciable over 4 years
Borrow 100000$ funds from bank at 10% interest

Interest is payable as per balance sheet date is due in 3 months

Software purchase worth 6000$ amortized over 8 years
Manufacuture goods worth 200000$(inventory)
Incurr 15000$ expenses in salaries out of which 4000$ is paid in
next year.
Sales worth 180000$ of inventory worth 100000$ with credit
sales worth 45000$

Expenses of management for travelling 8000$

Marketing expenses worth 5000$ with 2000$ paid in cash

Balance Sheet Income Statement
Assets Revenue 180000
Cash 166500 Expenses -139500
Preliminary Transaction 2250 Depreciation -8500
Machinary 63000 Net Income 32000
Land 10000
Rent Security 3000
Office Equipment 1500
Software 5250
Inventory 100000
Accounts receivable 45000
Total 396500

Liabilities
Equity 250000
Debt 100000
Accounts Payable 7000
Interest Payable 7500
Retained Earnings 32000
Total 396500
 Equity Capital Software Depreciation on Machinary
Dr Cr Dr Cr Dr
(1)250000 (9)6000 (A3)750 (A1)7000
250000 5250 7000

Prepaid Expenses Inventory Depreciation on Office Expenses

Dr Cr Dr Cr Dr
(2)2500 (A4)250 (10)200000 (12)100000 (A2)500
2250 100000 500

Machinary Salary Amortization on Software

Dr Cr Dr Cr Dr
(3)70000 (A1)7000 (11)15000 (A3)750
63000 15000 750

Land Salaries Payable Depreciation on Prepaid Expenses

Dr Cr Dr Cr Dr
(4)10000 (11)4000 (A4)250
10000 4000 250

Building Rent Sales

Dr Cr Dr Cr
(5)3000 (12)180000
3000 180000

Building Rent Advance A\R

Dr Cr Dr Cr
(5)3000 (12)45000
3000 45000

Office Equipment Asset Manufacturing Expenses

Dr Cr Dr Cr
(6)2000 (A2)500 (12)100000
1500 100000

Office Equipment Expense Travelling Expenses

Dr Cr Dr Cr
(6)1000 (13)8000
1000 8000

Loan Marketting Expenses

Dr Cr Dr Cr
(7)100000 (14)5000
100000 5000
Interest Payable A\P
Dr Cr Dr Cr
(8)7500 (14)3000
7500 3000

Interest Payable
Dr Cr
(8)7500
7500
 Cash in Bank
Depreciation on Machinary Dr Cr
Cr (1)250000 (2)2500
(7)100000 (3)70000
(12)135000 (4)10000
(5)3000
Depreciation on Office Expenses (5)3000
Cr (6)3000
(9)6000
(10)200000
(11)11000
Amortization on Software (13)8000
Cr (14)2000
166500

Depreciation on Prepaid Expenses

Cr
Trial Balance

Particular Dr Particular Cr
Prepaid Expenses(A) 2250 Equity Capital(L) 250000
Machinary(A) 63000 Loan(L) 100000
Land(A) 10000 Salaries Payable(L) 4000
Building Rent(E) 3000 Sales(Re) 180000
Building Rent Advance(A) 3000 Interest Payable(E) 7500
Office Equipment Asset(A) 1500 A\P(L) 3000
Office Equipment Expense(E) 1000
Interest Payable(L) 7500
Software(A) 5250
Inventory(A) 100000
Salary(E) 15000
A\R(A) 45000
Manufacturing Expenses(E) 100000
Travelling Expenses(E) 8000
Marketting Expenses(E) 5000
Depreciation on Machinary(E) 7000
Depreciation on Office Expenses(E) 500
Amortization on Software(E) 750
Depreciation on Prepaid Expenses(E) 250
Cash in Bank(A) 166500
Total 544500 Total 544500
Income Statement

Sales(Re) 180000
Building Rent(E) 3000
Office Equipment Expense(E) 1000
Salary(E) 15000
Manufacturing Expenses(E) 100000
Travelling Expenses(E) 8000
Marketting Expenses(E) 5000
Interest Payable(E) 7500
Depreciation on Machinary(E) 7000
Depreciation on Office Expenses(E) 500
Amortization on Software(E) 750
Depreciation on Prepaid Expenses(E) 250
Net Income 32000
Balance Sheet

Assets
Cash in Bank(A) 166500
Machinary(A) 63000
Land(A) 10000
Building Rent Advance(A) 3000
Office Equipment Asset(A) 1500
Software(A) 5250
Inventory(A) 100000
A\R(A) 45000
Prepaid Expenses(A) 2250
Total 396500

Liabilities
Equity Capital(L) 250000
Loan(L) 100000
Salaries Payable(L) 4000
A\P(L) 3000
Interest Payable(L) 7500
Retained Earninngs 32000
Total 396500