Higher Nationals

Internal verification of assessment decisions – BTEC (RQF)

INTERNAL VERIFICATION – ASSESSMENT DECISIONS
Programme title Higher National Diploma in Business Management
ssssss
Assessor Internal Verifier
Unit 10: Financial Accounting
Unit(s)
Prepare final accounts and perform bank reconciliation
Assignment title
eeeeeeeeeeeeeee
Student’s name
List which assessment Pass Merit Distinction
criteria the Assessor has
awarded.
INTERNAL VERIFIER CHECKLIST
Do the assessment criteria awarded
match those shown in the assignment Y/N
brief?

Is the Pass/Merit/Distinction grade awarded

justified by the assessor’s comments on the Y/N
student work?
Has the work been assessed
Y/N
accurately?
Is the feedback to the student:
Give details:

• Constructive?
Y/N
• Linked to relevant assessment
criteria? Y/N

• Identifying opportunities for

improved performance?
Y/N
• Agreeing actions? Y/N
Does the assessment decision need
Y/N
amending?
Assessor signature Date

Internal Verifier signature Date

Programme Leader signature (if
Date
required)
 Confirm action completed
Remedial action taken

Give details:

Assessor signature Date

Internal Verifier
Date
signature
Programme Leader
Date
signature (if required)
Higher Nationals - Summative Assignment Feedback Form

Student Name/ID

Unit Title
Assignment Number Assessor
Date Received 1st
Submission Date
submission
Date Received 2nd
Re-submission Date
submission
Assessor Feedback:

LO1 Record business transactions using double entry bookkeeping, and be able to extract a trial balance.
Pass, Merit & Distinction P1 P2 M1 D1
Descripts

LO2 Prepare final accounts for sole traders, partnerships and limited companies in accordance with
appropriate principles, conventions and standards.
Pass, Merit & Distinction P3 P4 M2 D2
Descripts

LO3 Perform bank reconciliation to ensure company and bank records are correct.

Pass, Merit & Distinction P5 M3 D3

Descripts

LO4 Reconcile control accounts and shift recorded transactions from the suspense account to the right
account.
Pass, Merit & Distinction P6 M4 D4
Descripts

Grade: Assessor Signature: Date:

Resubmission Feedback:

Grade: Assessor Signature: Date:

Internal Verifier’s Comments:

Signature & Date:

* Please note that grade decisions are provisional. They are only confirmed once internal and external moderation has taken place and grades decisions have
been agreed at the assessment board.

Assignment Feedback
Formative Feedback: Assessor to Student

Action Plan

Summative feedback

Feedback: Student to Assessor

Assessor signature Date

Date
Student signature
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REFERRAL or at worst you could be expelled from the course
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Pearson
Higher Nationals in
Business
Unit 10: Financial Accounting
Assignment 01
Assignment Brief
Student Name /ID Number

Unit Number and Title

Academic Year 20……

Unit Tutor

Assignment Title Prepare final accounts and perform bank reconciliation

Issue Date

Submission Date

IV Name & Date

Submission Format:
The submission should be in the form of an individual written report. This should be written in a concise,
formal business style using single spacing and font size 12. You are required to make use of headings,
paragraphs and subsections as appropriate, and all work must be supported with research and referenced
using the Harvard referencing system. Please also provide a bibliography using the Harvard referencing
system.

Unit Learning Outcomes:

LO1. record business transactions using double entry book-keeping, and be able to extract a trial balance;
LO2. prepare final accounts for sole-traders, partnerships or limited companies in accordance with
appropriate principles, conventions and standards;
LO3. perform bank reconciliations to ensure company and bank records are correct;
LO4. reconcile control accounts and shift recorded transactions from the suspense accounts to the right
accounts.

Assignment Brief and Guidance:

Activity 01. Record business transactions using double entry book keeping and be able to extract a
trial balance (Covers LO 01 and P1, P2, M1, D1 )

XYZ PLC has begun professional practice as a system analyst on July 1. He plans to prepare a monthly
financial statement. During July, the owner completed following transactions.

July 1. Owner invested LKR 500,000 cash along with computer equipment that had a market value of
LKR 120,000 two years ago, but was now worth LKR 100,000 only.
July 2. Paid LKR 15,000 cash for the rent of office space for the month.
July 4. Purchased LKR 12,000 of additional equipment on credit (due within 30 days).
July 8. Completed a work for a client and immediately collected the LKR 32,000 cash.
July 10. Completed work for a client and sent a bill for LKR 27,000 to be paid within 30 days.
July 12. Purchased additional equipment for LKR 8,000 in cash.
July 15. Paid an assistant LKR 6,200 cash as wages for 15 days.
July 18. Collected LKR 15,000 on the amount owed by the client.
July 25. Paid LKR 12,000 cash to settle the liability on the equipment purchased.
July 28. Owner withdrew LKR 500 cash for personal use.
July 30. Completed work for another client who paid only LKR 40,000 for 50% of the system design.
July 31. Paid salary of assistant LKR 7000.
July 31. Paid PLDT bill LKR 1,800 and Meralco bill LKR 3,800.

Requirement
 Apply book keeping technique and develop relevant journal entries for given transactions and prepare
general journal../P1
 Apply the double entry book-keeping system of debits and credits for above given transactions in
general ledger. /P1/M1
 Produce a trial balance applying the use of the balance off rule to complete the ledger./M1
 Apply trial balance figures to show which statement of financial accounts they will end up in./D1
Activity 02. Prepare final accounts for sloe traders, partnerships and limited companies in
according with appropriate principles, conventions and standards.

Part (A) – Sole Proprietorship

Saman Trading is a sole proprietorship owned by saman. The trial balance of Saman Trading as at 31st
March 2019 is as follows.
2018/4/1- 2019/3/31

Saman Trading
Trial Balance as at 31st March 2019
Dr (Rs. Cr (Rs.
Description
‘000) ‘000)
Property Plant and Equipment (at cost)    
Land and Building 51000  
Motor Vehicle 8800  
Office Equipment 5500  
Accumulated Depreciation as at 01st April 2018    
Building   10000
Motor Vehicle   2880
Office Equipment   1080
Trade Recievables / Trade Payables 13000 15200
Purchases / Sales 30000 71000
Provision for doubtful debts as at 01st April 2018   1240
Stocks as at 01st April 2018 7700  
Drawings 2400  
Sales Commision 4300  
Telephone and Electricity 7600  
Insurance 3660  
Salaries and Wages 13000  
Bank loan - 14%   19000
Cash in hand 5240  
Bank Overdraft   3800
Capital as at 01st April 2018   28000
  152200 152200
Additional Information –
1. Land Value of Rs. 11,000,000 included in the Land and Building cost.
2. The deprecation policy of the Saman Trading is straight line basis on cost. Depreciation rates as
follows.
Building 5%
Motor Vehicle 20%
Office Equipment 12%
3. Closing Inventory as at 31st March 2019 was Rs. 6,900,000
4. The telephone and electricity bill of Rs. 710,000 for the month of march 2019 was not paid as at
31st March 2019.
5. Insurance expense of Rs. 1,060,000 is relevant for the next financial year of 2019/20.
6. Trade Recievables from Nuwan Distributors amounting Rs 300,000 to be written off as a bad debt
and provision for doubtful debts to be made for the remaining receivable balance at the year end.
(Rate 2%)
7. The bank loan was obtained on 01st April 2018, payable in two equal instalments with the interest
It is due as at 31st march 2019.And it has been paid on 10th April 2019.

You are required to prepare following –

(a) Statement of Comprehensive Income for the year ended 31st March 2019.
(b) Statement of Financial position as at 31st March 2019.
Part (B) - Partnership
The summarized trial balance of ABN Associates (Partnership Business) as at 31st March 2018 is
given below.

ABN Associates
Trial Balance as at 31st March 2018
  Rs.
  Dr Cr
Partners' Capital Accounts    
Amal   500,000
Bimal   400,000
Nimal   400,000
Partners' Current Accounts    
Amal   225,000
Bimal 125,000  
Nimal 85,000  
Partners' loan Account – Nimal   200,000
Property, Plant & Equipment 900,000  
Drawings    
Amal 275,000  
Bimal 175,000  
3,800,00
Sales   0
Inventory 585,000  
Cost of sales

Initial inventory
+Purchases 1,900,00
-closing inventory 0  
Trade Recievables / Trade
Payables 280,000 150,000
Cash at bank 500,000  
Operational Expenses 850,000  
5,675,00 5,675,00
0 0

Adjustments need to be made for the following

1. Depreciation for the year was Rs. 180,000.

2. The profit sharing ratio of Amal, Bimal and Nimal is 4 : 3 : 3 respectively.
3. Interest is payable on Fixed Capital Accounts balances 10% per annum.
4. No entries have been made for Inventory costing Rs. 120,000 taken by Amal.
 5. Interest on the partners loan is 20% per annum.
6. Amal took away the other equipment for his own use on 31st March 2018 at a valuation of Rs.
100,000. The book value of the equipment is Rs. 50,000.

Requirement
Prepare the financial statements for a partnership including appropriation accounts

Part (C) – Limited Liability Company

The trial balance as at 31.03.2015 of Wiskam PLC which trades electric equipment is given below.
Property, Plant and equipment as at 2014.04.01
Dr. (Rs'000) Cr. (Rs'000)
Land 16,000.00
Building 5,000.00
Motor Vehicle 4,200.00
Computer system 600.00
Accumulated depreciation on property, plant and Equipment as at
2014.04.01
Building 1,500.0
0
Motor Vehicle 1,260.0
0
Computer system 120.0
0
Sales 19,300.00
Cost of sales 12,000.00
Trade receivables 1,240.00
Tax paid 175.00
10% bank loan 1,200.00
Lease deposit account 300.00
Advertising expense 200.00
Inventory as at 2015.03.31 (at cost) 350.00
Trade payables 1,650.00
Salary and wages 1,800.00
Stated capital (ordinary share) - share price Rs. 50.00 10,000.00
Dividends paid 500.00
Revaluation reserves as at 2014.04.01 700.00
Retained earnings 7,500.00
Discounts 50.00 120.00
Provisions for doubtful debts as at 2014.04.01 100.00
Sales commission 20.00
 Director's fuel and telephone allowances 175.00
Audit fee 60.00
Donations 30.00
Cash Balance 895.00
Bank overdraft 145.00

Additional information:
Before preparing the financial statements for the year ending 31.03.2015 the following adjustments have
to be made.
 The cost of inventory as at 31.03.2015 has been valued at First in First out (FIFO) method.
 A debtor of Rs. 80 000 from trade receivable amount as at 31.03.2015 was bankrupted on 10.04.2015
and out of this amount only 50% could be recovered. Further 10% on the remaining balance of trade
receivable was decided to provide as doubtful debts.
 An agreement was signed with an advertising company for two years by the company to promote the
products on 01.04.2014. Rs 200 000 of paid amount for a period of two years was recorded in the
advertising expense account.
 All property, plant and equipment should be depreciated 10% on cost based on straight line method
annually. All property, plant and equipment are used for administrative purpose.
 Computers of Rs 400 000 which purchased on 01.10.2014 were recorded in the purchase account.
 A machine was acquired on 01.04.2014 under a finance lease for a period of 4 years. A down payment
of Rs 300 000 was paid on this date and it has been recorded in a lease deposit account. Annual lease
installment of Rs 400 000 including of Rs 100 000 annual interest is to be paid at the end of each year.
The bank loan was obtained on 01.04.2014.
 It is reported that land revaluation loss of Rs 1 000 000 on 31.03.2015. because there is a highway in
front of the land but no entrance was to the highway in near the land. The revaluation reserve consists
of land revaluation surplus on 31.03.2010.
 The building of the business was revalued for the first time on 01.04.2015 for it’s fair value of Rs 4
500 000.
 It has been estimated that the income tax for the current year 2014/15 is Rs 220 000.
 The employer and employee contribution to the EPF are 15% and 10% on gross salary and wages
respectively and the employer contributes 3% to ETF. Only the net amount after reducing employees.
contribution has been recorded in salaries and wages account.
 It is decided to capitalized retained earnings 1/5th of the ordinary shares on 31.03.2015.
 The following decisions have been made by the board of directors.
 To pay a dividend of Rs. 1,500 000 to the ordinary shareholders of the company.
 To Transfer Rs. 300 000 for the general reserve
Requirement

Prepare final accounts from given trial balance figures

The final accounts should cover following statements;
 Statement of P/L and Other comprehensive income
 Statement of Financial Position
 Statement of Changes in Equity
 Notes to the financials

Part (D) – Cash Flow Statement

Extractions of the summarized statement of comprehensive income and statement of changes in Equity
for the year ended 31.03.2015 of Ruba PLC are as follows;
Income Statement Rs. (‘000)
Sales 20,500.00
Cost of sales (14,000.00)
Gross Profit 6,500.00
Other income (Fized deposit interest) 75.00
Operating expenses (3,500.00)
Other expenses (Computer disposal) (50.00)
Rs.
Financial Expenses (Loan interest) (760.00)
(‘000)
Profit before tax 2,265.00
Income tax (1,200.00)
Profit for the period 1,065.00

Statement of changes in Equity

Balance as at 01.04.2015 540.00
Total comprehensive income 1,065.00
Dividends (605.00)
Balance of retained earnings as at 31.03.2015 1,000.00
Additional information
1. Carrying amount of computer disposed on 01.04.2015 was Rs. 120,000.00
2. The depreciation of Rs. 300,000.00 was included in operating expenses
3. Following balances were extracted from the statement of financial position

Rs. (‘000)
2015.03.31 2014.03.31
Ordinary share capital 15,500.00 15,000.00 4. Rs.120,000.00 worth of a
Preference share capital 10,000.00 10,000.00
Property, Plant and equipment 7,700.00 8,000.00
Cash and cash equivalents 1,440.00 300.00
Loan interest receivable 40.00 50.00
Other current assests 3,200.00 2,900.00
Provision of income tax 150.00 100.00
Proposed dividends 200.00 250.00
Accrued loan interest 120.00 60.00
Trade Payables/Creditors 860.00 750.00
 photocopy machine was purchased during the period but it was not revealed under property plant and
equipment during the year
5. Note that other current assets include stocks worth 1000 and debtors/trade receivables worth 2200 as
at 31.03.2015 and stocks worth 1500 and debtors/trade receivables worth 1400 as at 31.03.2014
Requirement

Prepare Cash flow statement of Ruba PLC. Find the cash balance for the year ended by using
relevant accounting formats.

Part (E)

Compare the essential features of each financial statement (Complete set of Financial Statements)
to analyse the differences between them in terms of purpose, structure, content Etc.

Activity 03. Prepare bank reconciliations

Part (A)

The credit balance of the banks account of Araliya Business as at 31.03.2015 was Rs. 21,500.00. The
book balance was not agreed with the bank statement on that date. The following information were
revealed in the investigations.
(i) Cheques deposit and date f realization are as follows

Cheque number Deposit date Realization date Value (Rs)

043250 30th march 2015 2nd April 2015 4,500.00
215412 31st March 2015 3rd April 2015 33,500.00
721210 31st March 20150 3rd April 2015 16,000.00

(ii) The following deductions were made by bank from business as bank account

Deduction type Value (Rs.)

Cheque book charges 400
Overdraft interest 1800
Bank charges 450

(iii) Leasing installment of Rs. 20,000.00 was paid by bank on 20th March 2015 on standing order.
But it has not been recorded in a bank account of the business.

(iv) Cheques issued and dates of presented for the payment were as follows;
 Cheque number Deposit date Realization date Value (Rs)
010253 26th March 2015 10th April 2015 95,000.00
010262 31st March 2015 04th April 2015 16,500.00
010284 31st March 2015 04th April 2015 21,500.00

(v) Business requested from the bank to stop for the payment for cheque issued for a creditor of
Rs. 12,000.00 on 20th March 2015 and relevant adjustment was made in the business account,
but it is revealed that payment was made by bank.

(vi) An issued cheque of Rs. 8,900.00 already on 15th March 2015 was recorded in bank account of
the business as Rs. 9,800.00

(vii) Rs. 40,300.00 was directly deposited to the bank by a debtor.

Requirement
Apply relevant accounting procedures to check the book balance with the bank statement balance.
You are required to provide relevant notes and extra calculations to support your answer.

Part (B)

Tharindu (Pvt) Ltd’s cash book as at 31st March 2017 had a credit balance of Rs. 227,700. Bank Statement
was not agreed with the cash book balance, Bank Statement had a balance of Rs. 90,000 (Credit balance).
Following issues were identified through investigations.

(i) Bank Statement did not include cheques amounting Rs. 522,000 issued by Tharidu (Pvt) Ltd.
(ii) Following cheques deposited during the march 2017.But Its shown in the bank statement of April
2017.

Cheque Number Amount (Rs.)

111201 50000
450222 60000
650108 82000
(iii) Dividend Received Rs. 15,000 to the bank account directly. Which is not recorded in the
cash book.
(iv) Customer deposited Rs. 5,400 directly in the bank during the month of March.Tharindu (Pvt) Ltd
recorded this amount on 06th April 2017 when the bank statement was received.
(v) Cheque issued to a supplier amounting Rs. 76,800 was showed in the bank statement correctly.But
 Tharindu (Pvt) Ltd recorded this as a Rs. 78,600 in their books incorrectly.
(vi)Total payment side of a cash book was recorded Rs. 24,000 less.
(vii) Bank Charges was Rs. 10,500. Company has not recorded in the cash book.

Requirement

(i) Prepare the adjusted cash book of Tharindu (Pvt) Ltd for the month ended 31st
March 2017.
(ii) Prepare the bank reconciliation statement as at 31st March 2017.

Activity 04. Reconcile control accounts and clear suspense accounts

Creditor Ledger balance of XYZ business as at 01.03.2014 are as follows;

Creditor Name Value (Rs.)

Asitha 25,000.00
Visitha 44,000.00
Lasith 12,000.00
Total 81,000.00

The summary of the transaction done with the creditors during the month of March 2014 is given below;

Creditor Purchases (Rs.) Purchases Payment (Rs.) Discount

Return (Rs.) Received (Rs.)
Asitha 160,000.00 - 130,000.00 6,000.00
Visitha 300,000.00 4,000.00 300,000.00 -
Lasitha 120,000.00 - 120,000.00 2,000.00
Rakitha 50,000.00 - 16,000.00 -
Total 630,000.00 4,000.00 566,000.00 8,000.00

As at 01.03.2014 the total of the creditors ledger balance agreed with the balance of the creditor control
account. As at 31.03.2014 the total of the creditors ledger balance did not agree with the balance of the
creditors control account. The reasons for this difference are given Below;
(i) Discount received from Asitha for Rs. 3,000.00 have been debited to creditors control account
and credited to discount received account. No other entries had been made in this regard.
(ii) Debited note of Rs. 4,000.00 sent to Visitha has not been recorded in his account.
(iii) Cash ssales of Rs. 20,000.00 have been credited to creditors control account.
(iv) Purchase invoice dated 28.03.2014 raised for goods purchased of Rs.12,000.00 from Muditha.
 Has not been recorded in the purchase journal.
(v) The total of the purchase journal has been posted to the creditors control account as Rs.
603,000.00.

Requirement
Explain the process taken to reconcile control accounts and provide relevant control accounts with
reconciliation statements to obtain the correct creditor balance in the accounts.

Grading Rubric - Pass

Feedback
Outcome(s)/criteria Achieved
Outcome 1: Record business transactions using double entry book-keeping, and be able to extract a
trial balance.
P1. Apply the double entry book-keeping
system of debits and credits. Record
sales and purchase transactions in a
general ledger.
P2. Produce a trial balance applying the use
of the balance off rule to complete the
ledger.
Outcome 2: Prepare final accounts for sole-traders, partnerships and limited companies in accordance
with appropriate principles, conventions and standards

P3. Prepare final accounts from given trial

balance.

P4. Produce final accounts for a range of

examples that include sole traders,
partnerships or limited companies

Outcome 3: Perform bank reconciliation to ensure company and bank records are correct.

P5. Apply the bank reconciliation process to

prepare a number of bank
reconciliations.
Outcome 4: Reconcile control accounts and shift recorded transactions from the suspense accounts to
the right accounts.
P6. Explain the process taken to reconcile
control accounts and clear suspense
accounts using given account examples

Grading Rubric - Merit

Grade Description (Merit) Achieved Feedback

M1. Analyse transactions to show the

progression from previous trial balance to
the next one using double entry
bookkeeping.

M2. Make adjustments to balances of sum

accounts. For example, accruals,
depreciations and prepayments before
preparing the final accounts.

M3. Apply the reconciliation process

demonstrating the use of deposit in transit,
outstanding checks and NSF check.

M4. Demonstrate understanding of the

different types of accounts and how and
why they are reconciled.
 Grading Rubric - Distinction
Grade Description (Distinction) Achieved Feedback

D1. Apply trial balance figures to show

which statement of financial accounts
they will end up in.

D2. Compare the essential features of

each financial account statement to
analyse the differences between them in
terms purpose, structure and content.

D3. Prepare accurate bank reconciliations

that apply appropriate tools and
techniques to check general accounts and
balance sheets

D4. Produce accurate accounts that have

been reconciled applying the appropriate
methods
 Assignment Guideline
LO 01: Record business transactions using double entry book-keeping, and be able to
extract a trial balance.
P1. Apply the double entry book-keeping system of debits and credits. Record sales and purchase
transactions in a general ledger
Activity 01
Activity 1.1-Apply book keeping technique and develop relevant journal entries for given
transactions and prepare general journal.

1.Application of the Book Keeping Techniques for an organization

1.1 .General Jornal entries for XYZ PLC

XYZ PLC
As at 31st July
General Journal
- (LKR)
Date Description Debit Credit
01.07 Cash A/C 500000
Computer Equipment A/C 100000
Capital A/C 600000
(Recording owners’ investment of Cash and Computer)
02.07 Office Rent A/C 15000
Cash A/C 15000
(Recording payment of office rent)
04.07 Equipment A/C 12000
 Trade Payable A/C 12000
(Recording purchase of equipment on credit)
08.07 Cash A/C 32000
Service Income A/C 32000
(Recording service income on immediate cash)
10.07 Trade Receivable A/C 27000
Service Income A/C 27000
(Recording service income on credit)
12.07 Equipment A/C 8000
Cash A/C 8000
(Recording purchase of equipment on cash)
15.07 Wage A/C 6200
Cash A/C 6200
(Recording payment of wages)
18.07 Cash A/C 15000
Trade Receivables A/C 15000
(Recording Collection of payment owed by the client)
25.07 Trade Payable A/C 12000
Cash A/C 12000
(Recording settlement of equipment purchased of credit)
28.07 Drawings A/C 500
Cash A/C 500
(Recording owner’s drawings)
30.07 Cash A/C 40000
Trade Receivables A/C 40000
Service Income A/C 80000
(Recording 50% payment from the client for the
completed work)
31.07 Salary A/C 7000
Cash A/C 7000
(Recording payment of salary)
31.07 Utility Bill A/C 5600
Cash A/C 5600
(Recording payment of Utility bill)
P1. Apply the double entry book-keeping system of debits and credits. Record sales and purchase
transactions in a general ledger

M1. Analyse transactions to show the progression from previous trial balance to the next one using
double entry bookkeeping.

Activity 1.2-Apply the double entry book-keeping system of debits and credits for above given
transactions in general ledger.

1.2 .Preparation of the General Legder for XYZ Company /P1/M1

Cash Account
Re Amount Re Amount
Date Description f (Rs.) Date Description f (Rs.)
01-Jul Capital   500000 02-Jul Office Rent   15000
08-Jul Service Income   32000 12-Jul Equipment   8000
Trade
18-Jul Receivables   15000 15-Jul Wage   6200
Trade
30-Jul Service Income   40000 25-Jul Payables   12000
        28-Jul Drawings   500
        31-Jul Salary   7000
        31-Jul Utility Bill   5600
        31-Jul  Balance B/D   532700
Total 587000 Total 587000
 01-
Aug Balance B/F   532700        

Computer Account
Re Re
Date Description f Amount (Rs.) Date Description f Amount (Rs.)
01-Jul Capital   100000  
         31-Jul Balance B/D   100000
 Total 100000 Total 100000
 01-Aug Balance B/F   100000        

Capital Account

Date Description Ref Amount (Rs.) Date Description Ref Amount (Rs.)
  01-Jul Cash   500000
01-Jul Computer 100000
 31-Jul  Balance B/D   600000    
Total 600000 Total 600000
     01-Aug  Balance B/F    600000

Rent Account
Re Re
Date Description f Amount (Rs.) Date Description f Amount (Rs.)
02-Jul Cash   15000  
        31-Jul  Balance B/D   15000
Total 15000 Total 15000
 01-Aug Balance B/F   15000        

Service Income Account

Date Description Re Amount Date Description Re Amount (Rs.)
f (Rs.) f
   08-Jul Cash   32000
Trade
10-Jul Receivable 27000
30-Jul Cash 80000
 Balance
31-Jul  B/D    139000    
Total 139000 Total 139000
 01-
    Aug  Balance B/F    139000

Re
Date Description f Amount (Rs.) Date Description Ref Amount (Rs.)
10-Jul Service Income   27000 18-Jul Cash   15000
 30-Jul  Service Income   40000 31-Jul  Balance B/D   52000
Total 67000 Total 67000
 01-
Aug Balance B/F   52000        
Trade Receivable Account

Equipment Account
Re Re
Date Description f Amount (Rs.) Date Description f Amount (Rs.)
04-Jul Trade Payable   12000  
 12-Jul Cash   8000 31-Jul  Balance B/D   20000
Total 20000 Total 20000
 01-Aug Balance B/F   20000        

Wage Account
Re Re
Date Description f Amount (Rs.) Date Description f Amount (Rs.)
15-Jul Cash   6200  
        31-Jul  Balance B/D   6200
Total 6200 Total 6200
  01-Aug Balance B/F   6200        

Trade Payable Account

Date Description Ref Amount (Rs.) Date Description Ref Amount (Rs.)
25-Jul Cash   12000 04-Jul Equipment   12000
         31-Jul Balance B/D   -
Total 12000 Total 12000
  Balance B/F   -        

Drawings Account
Re Re
Date Description f Amount (Rs.) Date Description f Amount (Rs.)
28-Jul Cash   500  
        31-Jul  Balance B/D   500
Total 500 Total 500
 01-Aug Balance B/F   500        

Salary Account
Re Re
Date Description f Amount (Rs.) Date Description f Amount (Rs.)
31-Jul Cash   7000  
        31-Jul  Balance B/D   7000
Total 7000 Total 7000
 01-Aug Balance B/F   7000        

Utility Bill Account

Re Re
Date Description f Amount (Rs.) Date Description f Amount (Rs.)
31-Jul Cash   5600  
        31-Jul  Balance B/D   5600
Total 5600 Total 5600
 01-Aug Balance B/F   5600        

1.3.Application of Transactions in accounting Equation to show the impact on next trail Balance/M1
 Eg : Transaction 01
Income+ Liabilty+ capital = Assets+ Expenses
SuB parts: sales+…………………………..

Analysis
Date Transction Impact on Next trail Balance
7/1 Owner invested LKR 500,000 Capital + 600,000
cash along with computer Computer + 100,000
equipment that had a market Cash + 100,000
value of LKR 120,000 two years
ago, but was now worth LKR
100,000 only

P2. Produce a trial balance applying the use of the balance off rule to complete the ledger.
Activity 1.3- Produce a trial balance applying the use of the balance off rule to complete the ledger.
1.3. Trail balance for the XYZ company

Trial Balance of XYZ PLC

As at 31st July
Name of the Account LF Dr. Balance (Rs.) Cr. Balance (Rs.)
Cash   532700  
Computer   100000  
Capital     600000
Rent   15000  
Service Income     139000
Trade Receivable   52000  
Equipment   20000  
Wage   6200  
Drawings   500  
Salary   7000  
Utility Bill   5600  
Total   739000 739000
P2

P2. Produce a trial balance applying the use of the balance off rule to complete the ledger

Activity 1.3. Produce a trial balance applying the use of the balance off rule to complete the ledger.

1.4.Trial balance for XYZ company

Trial Balance of XYZ PLC
As at 31st July
Name of the Account LF Dr. Balance (Rs.) Cr. Balance (Rs.)
Cash   532700  
Computer   100000  
Capital     600000
Rent   15000  
Service Income     139000
Trade Receivable   52000  
Equipment   20000  
Wage   6200  
Drawings   500  
Salary   7000  
Utility Bill   5600  
Total   739000 739000
D1. Apply trial balance figures to show which statement of financial accounts they will end up in

Activity 1.4. Apply trial balance figures to show which statement of financial accounts they will end
up in.

1.5.
Name of the Account Dr. Balance (Rs.) Cr. Balance Ctagory financial
(Rs.) Statemen
t
Cash 532700   Assest Statement
of
Financila
Position
Computer 100000   Assest
Capital   600000 Capital
Rent 15000   Expense
Service Income   139000 Income
Trade Receivable 52000   Assest
Equipment 20000   Assest
Wage 6200   Expense
Drawings 500   Capital
Salary 7000   Expense
Utility Bill 5600   Expense
Total 739000 739000
Application of trail balance elements in Financial Statements
1.6.Justification for allocating the elements and preparation of financial statements/Not mandatory

Learning Outcome 2: Prepare final accounts for sole-traders, partnerships and limited companies in
accordance with appropriate principles, conventions and standards.
Activity 02
P3. Prepare final accounts from given trial balance
P4. Produce final accounts for a range of examples that include sole traders, partnerships or limited companies
M2. Make adjustments to balances of sum accounts. For example, accruals, depreciations and prepayments
before preparing the final accounts.

Activity 02-Part A-Sole Propertiership

2. Preparation of Final financial statements for a Sole trader organization

2.1. Comprehensive Income statement for Sole trader organization ( Activity 2.A.a)
-Income statement
Saman Trading
For the year ending 31.03.2019
Statement of Comprehensive income
(LKR 000)

Sales     71000
       
Cost of Sales      
Opening Inventory   7700  
Purchases   30000  
    37700  
(-) Closing Inventory   -6900 -30800
       
Gross Profit     40200
       
Other income      
Provision for Doubtful Debt     986
      41186
Office and Administration Expenses      
Building Depreciation 2000    
Office Equipment Depreciation 660    
Telephone and Electricity Bill 8310    
Insurance 2600    
Salaries and Wages 13000 26570  
Sales and Distribution Expenses      
Bad Debt 300    
Motor Vehicle Depreciation 1760    
Sales Commission 4300 6360  
       
Finance Expenses      
Bank Loan Interest 2660 2660 (35590)
 Net profit     5596

2.1. Staement of Financila Position for Sole trader organization ( atcity 2.A.b)
Saman Trading
As at 31.03.2019
Statement of Financial Position
(LKR 000)
Accumulated
Non-Current Assets Cost Net Value
Depreciation
Land 11000 N/A 11000
Building 40000 12000 28000
Motor Vehicle 8800 4640 4160
Office Equipment 5500 1740 3760
  65300 18380 46920
Current Assets      
Inventory   6900  
Trade Receivables 12700    
(-) Doubtful Debt -254 12446  
Prepaid Insurance   1060  
Cash in Hand   5240 25646
      72566
Equity      
Capital 28000    
(-) Drawings -2400 25600  
Net Profit   5596 31196
       
Non-Current Liabilities      
Bank Loan   19000  
       
Current Liabilities      
Trade Payables   15200  
Accrual Telephone and Electricity Bill   710  
Accrual Bank Loan Interest   2660  
Bank overdraft   3800 41370
      72566

Workings

1. Depreciation of Non-Current Assets for the Year

 5
 Building Rs . 40000 × =Rs .2000
100

20
 Motor Vehicle Rs . 8800× =Rs . 1760
100

12
 Office Equipment Rs .5500 × =Rs . 660
100

2. Provision of Doubtful Debt for the year

 Trade Receivables= Rs. 13000

(-) Bad Debt = Rs. (300)
Actual Trade = Rs.12700
Receivables

2
 Doubtful Debts for remaining trade receivables = Rs .12700 × =Rs . 254
100
14
3. Bank Loan Interest = Rs .19000 × =Rs . 2660
100
Partnetrship accounts

Activity 2.B.

1.Trading, P&L, Appropriation Account

ABN Association
For the year ended 31.03.2018
Trading, P&L, Appropriation Account
LKR
Sales   3800000
     
Cost of Sales (1900000 - 120000)   -1780000
     
 Gross Profit   2020000
     
Other Income    
Sales Proceed   50000
    2070000
Expenses    
Depreciation 180000  
Interest - Nimal 40000  
Operational Expenses 850000 -1070000
Net Profit   1,000,000
     
Interest    
Amal 50000  
Bimal 40000  
Nimal 40000 -130000
    870000
Profit    
Amal 348000  
Bimal 261000  
Nimal 261000 -870000
    0
2. Statement of Financial Position

ABN Association
As at 31.03.2018
Statement of Financial Position
LKR
Non-Current Assets    
Property Plant and Equipment   670000
     
Current Assets    
Inventory 585000  
Trade Receivable 280000  
Cash at Bank 500000 1365000
    2035000
     
Capital and Liabilities    
Capital -    
Amal 500000  
 Bimal 400000  
Nimal 400000 1300000
     
Current Account -    
Amal 128000  
Bimal 1000  
Nimal 256000 385000
     
Non-Current Liabilities    
Loan – Nimal 200000  
     
Current Liabilities    
Trade Payables 150000 350000
    2,035,000
Description Amal Bimal Nimal Description Amal Bimal Nimal
Balance N/A 125000 85000 Balance 225000    
Drawing 120000     Interest 50000 40000 40000
Equipment 100000     Loan Interest     40000
Drawing 275000  175000   Profit 348000 261000 261000
31.03.2018 B/B/D 128000 1000 256000        
  623000 301000 341000   623000 301000 341000
        01.04.2018 B/B/F 128000 1000 256000

Current Account

Workings

1. Interest on Capital for all three members

10
 Amal Rs .500000 × =Rs . 50000
100

10
 Bimal Rs . 400000 × =Rs . 40000
100

10
 Nimal Rs . 400000 × =Rs . 40000
100
2. Loan Interest Calculation - Nimal

20
 Rs . 200000× =Rs . 40000
100

3. Sales Proceed Calculation – Nimal

 Selling price of other equipment – Actual cost of other equipment = Sales Proceed
Rs. 100000 – Rs. 50000 = Rs. 50000

4. Property Plant and Equipment (PPE) Calculation

 Amount available in Trial Balance – Depreciation – Nimal’s Drawing = Net Value of PPE

Rs. 900000 – Rs. 180000 – Rs. 50000 = Rs. 670000

5. Profit Allocation for All three Partners

4
 Amal Rs . 870000× =Rs . 348000
100

3
 Bimal Rs . 870000× =Rs . 261000
100

3
 Nimal Rs . 870000× =Rs . 261000
100