Accounting Assignment

Questions: a) Understand the language of financial accounting and financial reporting. b) Explain the purpose, content, format and practical applications of the following financial statements, the Profit and Loss Statement, the Balance Sheet, and the relationship between these financial statements. c) Understand the accounting cycle and the business process of accounting information systems and their ethical implications. Engage in the evaluation, development or implementation of computerized accounting information systems. Answers: Income Statement for the month ended on 31 October, 2012 particulars Amount (in $) Sales 4000 2,13,213.00 Less: Cost of goods sold 5010 (1,63,380.00) Total Income 49,833.00 Expenses Interest expense 5020 46,000.00 Expense on salaries 5040 22,500.00 Expenses Sundry 5060 11,660.00 Expense on Advertising 5070 750.00 Expense on Insurance 5080 800.00 Expense on Rent 5090 5,000.00 Expense on Bad debts 5100 5,496.00 Expense on Inventory devaluation 5110 4,800.00 expense on Depreciation of buildings 5120 2,917.00 expense on Depreciation of motor vehicle 5130 375.00 Total Expenses 1,00,298.00 Net Loss (50,465.00) Balance Sheet as on 31 October, 2012 Particulars Amount (in $) Assets Current assets Cash 1010 88,323.00 Accounts receivable 1020 1,20,510.00 doubtful debts allowance 1030 (5,666.00) 1,14,844.00 Inventory 1040 2,00,740.00 Prepaid insurance 1050 11,200.00 rent Prepaid 1060 45,000.00 Advertising Prepaid 1070 1,250.00 Non-current assets Buildings 1100 14,00,000.00 Buildings - Accumulated depreciation 1105 (1,77,917.00) 12,22,083.00 Motor vehicle 1200 45,000.00 - motor vehicle - Accumulated depreciation 1205 (9,375.00) 35,625.00 Total assets 17,19,065.00 Liabilities Share Capital 3010 12,79,200.00 Retained earnings 3020 (50,465.00) Non Current liabilities Bank Loan 2100 2,76,000.00 Current liabilities Accounts payable 2010 1,25,670.00 Interest payable 2020 46,000.00 Income tax payable 2030 - Salaries payable 2040 22,500.00 Provision for employee entitlements 2050 8,500.00 Accrued expenses 2060 11,660.00 Total Liabilities 17,19,065.00