Transactions - Year 2015

Mr. Ashiq started his business “Ashiq Enterprise” on 1st January 2015. During the year the
following transactions occurred.

1. Mr. Ashiq started his business with BDT 50,00,000 as capital. 2000000 as cash and
3000000 as PPE

2. He purchased goods for sale worth of BDT 20,00,000 of which 50% paid in cash and 50%
on credit.

3. He sold goods worth BDT 35,00,000 and 50% of sales are on cash and 50% are on credit.

4. He paid salaries and wages expense of BDT 100,000.

5. He paid office rent of BDT 240000 and Utility bill of BDT 36000.

6. He purchased Machineries worth of 150000.

7. He took loan worth 200,000 from bank.

8. He received cash BDT 15,00,000 from customers for previous credit sale.

9. He paid cash BDT 8,00,000 to suppliers for previous credit purchase.

10. He paid advertisement expense of BDT 50,000.

11. He purchased patent for 6 years of BDT 60,000

12.He created allowance for bad debt fund worth of BDT 20,000.
13.He purchased 25% stock of another company worth of BDT 1,00,000.
14. He gave wages to his factory workers BDT 5000.
15. He purchased a laptop for his personal use with business cash of BDT 1,00,000

1
 JOURNAL

Serial Details Debit Credit

No.
1. Cash 20,00,000
PPE 30,00,000
Capital 50,00,000
2. Purchase 20,00,000
Cash 10,00,000
Accounts Payables 10,00,000
3. Cash 17,50,000
Accounts Receivables 17,50,000
Sales 35,00,000
4. Salaries 1,00,000
Cash 1,00,000
5. Office Rent expense 2,40,000
Utility Bill expense 36,000
Cash 2,76,000
6. Machineries 1,50,000
Cash 1,50,000
7. Cash 2,00,000
Loan 2,00,000
8. Cash 15,00,000
Accounts Receivables 15,00,000
9. Accounts Payables 8,00,000
Cash 8,00,000
10. Advertisement Expense 50,000
Cash 50,000

11. Patent 60,000

Cash 60,000
12. Bad debt expense 20,000
Allowance for bad debt 20,000
13. Stock Investment 1,00,000
Cash 1,00,000
14. Wages expense 5,000
Cash 5,000
15. Drawings 1,00,000
Cash 1,00,000

Ledger
Dr Cr

Cash
2
Capital 20,00,000 Purchase 10,00,000
Sales 17,50,000 Salaries 1,00,000
Loan 2,00,000 Office Rent 2,40,000
Accounting Receivable 15,00,000 Utility 36,000
Machineries 1,50,000
Accounting Payable 8,00,000
Advertisement 50,000
Patent 60000
Stock investment 1,00,000
Wages exp. 5000
Drawings 1,00,000
C/F 28,09,000
Total=54,50,000 Total=54,50,000

Capital
C/F 50,00,000 Cash 20,00,000
PPE 30,00,000
Total=50,00,000 Total=50,00,000

PPE
Capital 30,00,000 C/F 30,00,000
Total=30,00,000 Total=30,00,000

Purchase
Cash 10,00,000 C/F 20,00,000
Accounts Payable 10,00,000
Total=20,00,000 Total=20,00,000

Accounts Payable
Cash 8,00,000 Purchase 10,00,000
C/F 2,00,000
Total=10,00,000 Total=10,00,000

Accounts Receivable
Sales 17,50,000 Cash 15,00,000
C/F 2,50,000
Total=17,50,000 Total=17,50,000

Sales
C/F 35,00,000 Cash 17,50,000
Accounts receivable 17,50,000
Total=35,00,000 Total=35,00,000

Salaries
Cash 1,00,000 C/F 1,00,000

3
 Total=1,00,000 Total=1,00,000

Office Rent
Cash 2,40,000 C/F 2,40,000
Total=2,40,000 Total=2,40,000

Utility
Cash 36,000 C/F 36,000
Total=36,000 Total=36,000

Machineries
Cash 1,50,000 C/F 1,50,000
Total=1,50,000 Total=1,50,000

Loan
C/F 2,00,000 Cash 2,00,000
Total=2,00,000 Total=2,00,000

Advertisement
Cash 50,000 C/F 50,000
Total=50,000 Total=50 ,000

Patent
Cash 60,000 C/F 60,000
Total=60,000 Total=60 ,000

Bad Debt Exp.

Allowance for the bad debt exp. 20,000 C/F 20,000
Total=20,000 Total=20 ,000

Allowance for the bad debt exp.

C/F 20,000 C/F 20,000
Total=20,000 Total=20 ,000

Stock Investment

4
Cash 1,00,000 C/F 1,00,000
Total=1,00,000 Total=1,00,000

Wages Exp.
Cash 5000 C/F 5000
Total=5000 Total=5000

Drawings
Cash 1,00,000 C/F 1,00,000
Total=,1,00,000 Total=1,00,000

Trial Balance
As on 31st December, 2015

Cash 28,09,000
Capital 50,00,000
PPE 30,00,000
Purchase 20,00,000
Accounts Payable 2,00,000
Accounts receivable 2,50,000
Sales 35,00,000
Salary 1,00,000
Rent 2,40,000
Utilities 36,000
Machineries 1,50,000
Loan 2,00,000
Advertisement expense 50,000
Patent 60,000
Bad debt exp. 20,000
Allowance for bad debt exp. 20,000
Stock Investment 1,00,000
Wages Exp. 5000
Drawings 1,00,000

Total 89,20,000 89,20,000

Adjustment
1. Office rent paid up to 31st December, 2016
2. Utility bill 12000 yet to be paid
3. Interest on loan 2000 has to be paid
4. Depreciation expense 10,000 for machineries and amortization of patent (6 years &
no residual value)
5. He gained 20 % profit from his investment.

5
 Adjustment Journal

Serial Details Debit Credit

No.
1. Prepaid office rent 1,20 ,000
Office rent 1,20,000
2. Utility bill 12,000
Utility bill payable 12,000
3. Interest Expense 2000
Interest payable 2000
4. Depreciation 10,000
Accumulated Depreciation 10,000
5. Amortization of patent 10,000
Accumulate of amortization 10,000
6. Stock Investment 20,000
Gain in Investment 20,000

Adjustment ledger
Prepaid office rent
Office rent 1,20,000 C/F 1,20,000
Total=1,20,000 Total=1,20,000

Utility bill Payable

C/F 12,000 C/F 12,000
Total=12,000 Total=12,000

Office Rent
Cash 2,40,000 Prepaid Office rent 1,20,000
C/F 1,20,000
Total=2,40,000 Total=2,40,000

Utility
Cash 36,000 C/F 48,000
Utility bill payable 12,000
Total=48,000 Total=48,000

6
 Interest expense
Interest expense payable 2000 C/F 2000
Total=2000 Total=2000

Interest expense payable

C/F 2,000 Interest expense 2,000
Total=2,000 Total=2,000

Depreciation (M)
Accumulated depreciation 10,000 C/F 10,000
Total=10,000 Total=10 ,000

Accumulated depreciation
C/F 10,000 Depreciation 10,000
Total=10,000 Total=10 ,000

Amortization of Patent
Accumulate of amortization 10,000 C/F 10,000
Total=10,000 Total=10 ,000

Accumulated Amortization
C/F 10,000 Amortization of patent 10,000
Total=10,000 Total=10 ,000

Stock Investment
Cash 1,00,000 C/F 1,20,000

7
Gain on investment 20,000
Total=1,20,000 Total=1,20,000

Gain on Investment
C/F 20,000 Depreciation 20,000
Total=20,000 Total=20 ,000

Adjusted Trial Balance

As on 31st December, 2015

Names of entries Balance Adjustments New balance

Cash 28,09,000 28,09,00
0
Capital 50,00,000 50,00,000

PPE 30,00,000 30,00,00

0
Purchase 20,00,000 20,00,00
0
Accounts Payable 2,00,000 2,00,000

Accounts receivable 2,50,000 2,50,000

Sales 35,00,000 35,00,000

Salary 1,00,000 1,00,000

Rent 2,40,000 1,20,000 1,20,000

Utilities 36,000 12,000 48,000

Vehicle 1,50,000 1,50,000

Loan 2,00,000 2,00,000

8
Advertisement expense 50,000 50,000

Prepaid office rent 1,20,00 1,20,000

0
Utility bill payable 12,000 12,000
Interest expense 2000 2000
Interest payable 2000 2000

Depreciation 10,000 10,000

Accumulated depreciation 10,000 10,000

Patent 60,000 60,000

Bad debt Exp. 20,000 20,000

Allowance for bad debt 20,000 20,000
Stock Investment 1,00,000 20,000 1,20,000
Wages Exp. 5000 5000
Drawings 1,00,000 1,00,000

Amortization of patent 10,000 10,000

Accumulated amortization 10,000 10,000

Gain on investment 20,000 20,000

89,74,000 89,74,000

Income Statement
For the year ended 31st December, 2015

Sales 35,00,000
Less: COGS Purchase 20,00,000
Wages 5000
Gross Profit 14,95,000
Salary (1,00,000)
Rent (1,20,000)
Utility (48,000)
Advertisement (50,000)

9
Bad debt Exp. (20000)
Interest expense (2000)
Depreciation (10,000)
Amortization Patent (10,000)
3,60,000
Operating Profit 11,35,000
Gain on Stock Investment 20,000
Net Profit 11,55,000

Balance Sheet
2015 (31st December)
Asset: Current
Cash 28,09,000
Stock Investment 1,20,000
Accounts Receivable 2,50,000
Prepaid office rent 1,20,000
Asset: non current
PPE 30,00,000
Patent 60,000
machineris 1,50,000
Total Assets 65,09,000

Liability and Equity

Liability
Accounts payable 2,00,000
Loan 2,00,000
Utility bill payable 12,000
Interest expense payable 2000
Allowance for bad debt 20,000
Accumulated depreciation 10,000
Accumulated Amortization 10,000
Total Liability 4,54,000
Equity:
Capital 50,00,000
Net income 11,55,000
Drawings (1,00,000)
Total equity & Equity 65,09,000

Notes:
1. Office rent BDT 2,40,000 is divided by 02 because total amount paid for 02 years.
01 year rent =2,40,000 = 1,20,000

2. Patent’s useful time is 06 years and no residual value, so it’s amortization is

calculated in straight line method.
Total patent amount – residual value

10
 Useful time
= 60,000 – 0 =10,000
6
3. Gain on Stock investment is 20,000 (1,00,000 X 20%) and it is added to operating
profit.

11
 2016 Transaction
1. Mr. Ashiq purchased 15, 00,000. 10,00,000 of which was in credit & 5,00,000 on cash
2. Sales was 20,00,000 in credit & 10,00,000 in cash
3. Salary paid 1,50,000 in cash
4. Utility bill 60,000. 12000 for previous year included
5. Loan repayment 1,00,000
6. Cash received against A/R was 18,00,000
7. Cash paid against A/P for 5,00,000
8. Administrative cost was 1,00,000
9. PPE worth of 1,00,000 sold.
10. Withdraw by 1,00,000 Mr. Ashiq
11. Prepaid office rent expired worth 1,20,000
12. Interest expense 4000 of which 2000 for previous year
13. He purchase a vehicle worth of BDT 1,00,000
14. He revalued Machineries worth of 2,00,000 tk with 20 years remaining useful life and no
residual value.
15. Research and development Expense 50,000 tk.

JOURNAL

Serial Details Debit Credit

No.
1. Purchase 15,00,000
Cash 5,00,000
Accounts Payables 10,00,000
2. Cash 10,00,000
Accounts Receivables 20,00,000
Sales 30,00,000
3. Salaries 1,50,000
Cash 1,50,000
4. Utility bill 60,000
Cash 48,000
Utility bill payable 12,000
5. Loan 1,00,000
Cash 1,00,000
6. Cash 18,00,000
A/R 18,00,000
7. A/P 5,00,000
Cash 5,00,000
8. Administrative cost 1,00,000

12
 Cash 1,00,000
9. Cash 1,00,000
PPE 1,00,000
10. Drawing 1,00,000
Cash 1,00,000
11. Office rent 1,20,000
Prepaid office rent 1,20,000
12. Interest expense 2000
Interest payable 2000
Cash 4000
13. Vehicle 1,00,000
Cash 1,00,000
14. Machineries 50,000
Accumulated Depreciation 10,000
Revaluation Reserve 60,000
15. R&D 50,000
Cash 50,000
Total 76,20,000 76,20,000

13
 Ledger
Cash
C/B 28,09,000 Purchase 5,00,000
Sales 10,00,000 Salaries 1,50,000
PPE 1,00,000 Utility 60,000
Accounting Receivable 18,00,000 Loan 1,00,000
Accounting Payable 5,00,000
Administrative cost 1,00,000
Drawing 1,00,000
Interest 4000
Vehicle 1,00,000
R&D 50,000
C/F 40,45,000
Total=57,09,000 Total=57,09,000

Capital
C/F 60,55,000 C/B 60,55,000
Total=60,55,000 Total=60,55,000

Drawing
Cash 1,00,000 C/F 1,00,000
Total=1,00,000 Total=1,00,000

PPE
C/B 30,00,000 Sold 1,00,000
C/F 29,00,000
Total=30,00,000 Total=30,00,000

Purchase
Cash 5,00,000 C/F 15,00,000
Accounts Payable 10,00,000
Total=15,00,000 Total=15,00,000

Accounts Payable
Cash 5,00,000 C/B 2,00,000
C/F 7,00,000 Purchase 10,00,000
Total=12,00,000 Total=12,00,000

Accounts Receivable
C/B 2,50,000 Cash 18,00,000
Sales 20,00,000 C/F 4,50,000
Total=22,50,000 Total=22,50,000

14
 Sales
C/F 30,00,000 Cash 10,00,000
Accounts receivable 20,00,000
Total=30,00,000 Total=30,00,000

Salaries
Cash 1,50,000 C/F 1,50,000
Total=1,50,000 Total=1,50,000

Utility
Cash 60,000 Utility payable 12,000
C/F 48,000
Total=60,000 Total=60,000

Loan
Cash 1,00,000 C/B 2,00,000
C/F 1,00,000
Total=1,00,000 Total=1,00,000

Administrative Expense
Cash 1,00,000 C/F 1,00,000
Total=1,00,000 Total=1,00,000

Office rent
Prepaid office rent 1,20,000 C/F 1,20,000
Total=1,20,000 Total=1,20,000

Interest expense
Cash 4000 Interest payable 2000
C/F 2000
Total=4,000 Total=4,000

Vehicle
Cash 1,00,000 C/F 1,00,000
Total=1,00,000 Total=1,00,000

Accumulated depreciation
Revaliuation Reserve 10,000 C/B 10,000
Total=10,000 Total=10,000

15
 Machineries
C/B 1,50,000 C/F 2,00,000
Revaluation Reserve 50,000
Total=2,00,000 Total=2,00,000

Revaluation Reserve
C/F 60,000 Acc. Dep. of machineries 60,000
Total=60,000 Total=60,000

Research and Development

Cash 50,000 C/F 50,000
Total=50,000 Total=50,000

Trial Balance
As on 31st December 2016

Dr Cr

Cash 40,45,000
Capital 60,55,000
PPE 29,00,000
Purchase 15,00,000
Accounts Payable 7,00,000
Accounts receivable 4,50,000
Sales 30,00,000
Salary 1,50,000
Utilities 48,000
Loan 1,00,000
Administrative expense 100,000
Office rent 1,20,000
Drawing 1,00,000
Machineries 2,00,000
Rev. Reserve 60,000

16
Patent 60,000
Stock Investment 1,20,000
R&D 50,000
Allowance for debt 20,000
Acc. Amortization of patent 10,000
Interest expense 2,000
Vehicle 1,00,000
Total 99,45,000 99,45,000

Adjustment
1. Depreciation of vehicle BDT 10,000
2. Amortization of patent BDT 10,000 for this year.
3. Machinery for 20 years BDT 10,000 for this year.
4. Interest exp. BDT 2000 which is not paid.
5. He sold his investment stock worth of BDT 1,50,000

Adjusted Journal
Serial Details Debit Credit
No.
1. Depreciation of Vehicle 10,000
Accumulated Depreciation 10,000
2. Amortization of patent 10,000
Accumulated Amortization 10,000
3. Interest expense 2000
Interest payable 2000
4. Machineries Depreciation 10,000
Accumulated Depreciation 10,000
5. Cash 1,50,000
Stock Investment 1,20,000
Gain in Investment 30,000

17
 Adjusted Ledger:
Depreciation (V)
C/B 10,000 C/F 20,000
Accumulated depreciation 10,000

Total=20,000 Total=20,000

Accumulated depreciation (V)

C/F 10,000 Depreciation 10,000
Total=10,000 Total=10 ,000

Amortization of Patent
Accumulate of amortization 10,000 C/F 10,000
Total=10,000 Total=10 ,000

Accumulated Amortization
C/F 10,000 Amortization of patent 10,000
Total=10,000 Total=10 ,000

Depreciation (M)
Accumulated depreciation 10,000 C/F 10,000
Total=10,000 Total=10 ,000

Accumulated depreciation (M)

C/F 10,000 Depreciation 10,000
Total=10,000 Total=10 ,000

Interest expense
Interest expense payable 2000 C/F 2000
Total=2000 Total=2000

18
 Interest expense payable
C/F 2,000 Interest expense 2,000
Total=2,000 Total=2,000

Stock Investment
Cash 1,00,000 C/F 1,20,000
Gain on investment 20,000
Total=1,20,000 Total=1,20,000

Gain on Investment
C/F 20,000 Depreciation 20,000
Total=20,000 Total=20 ,000

Adjusted Trial Balance

As on 31st December, 2016

Names of entries Balance Adjustments New balance

Cash 40,45,000 1,50,000 41,95,000

Capital
61,70,000
60,55,000
PPE
29,00,000 29,00,000
Purchase
15,00,000 15,00,000
Accounts Payable
7,00,000 7,00,000
Accounts receivable
4,50,000 4,50,000
Sales
30,00,000 30,00,000
Salary
1,50,000 1,50,000

19
Utilities
48,000 48,000
Loan
1,00,000 1,00,000
Administrative expense
100,000 100,000
Office rent
1,20,000 1,20,000
Drawing
1,00,000 1,00,000
Interest expense
2000 4000
2000
Vehicle
1,00,000 1,00,000
Vehicle Depreciation 10,000
10,000
Patent 60,000 60,000

Interest payable 2,000 2,000

Machinery 2,00,000 2,00,000

Rev. reserve 60,000 60,000

Accumulated amortization 10,000 10,000 20,000

Amortization Patent 10,000 10,000

Acc. Depreciation R(V) 10,000 10,000

R&D 10,000 10,000

1,20,000 1,20,00
Stock Investment 0

20,000 20,000
Allowance for bad debt

30,000 30,000
Gain on investment

Depreciation machineries 10,000 10,000

Acc. depreciation (M) 10,000 10,000

20
Total 10007000 10007000

Income Statement
For the year ended on 31st December, 2016

Sales 30,00,000
Purchase (15,00,000)
Gross Profit 15,00,000
Less: Operating & Admin Exp.
Salary (1,50,000)
Rent (1,20,000)
Utility (48,000)
Administrative Exp. (100,000)
Interest expense (4000)
Depreciation (V) (10,000)
R&D (50,000)
Depreciation (M) (10,000)
Amortization of Patent (10,000)
Operating Profit 9,98,000
Add. Gain on stock investment 30,000
Net Profit 10,28,000

Balance Sheet (As on 31 st

December, 2016)

Asset:
Cash 41,95,000
PPE 29,00,000
Accounts receivable 4,50,000
Machineries 2,00,000
Vehicle 1,00,000
Patent 60,000
Total Asset 79,05,000
Liability and Equity
Liability
Accounts payable 7,00,000
Loan 1,00,000
Interest exp. Payable 2000
Acc. Amortization 20,000
Acc. Depreciation of vehicle 10,000
Allowance for bad debt 20,000

21
Acc. Depreciation of machinery 10,000
Total Liability 8,62,000
Equity:
Capital 60,55,000
Net income 10,28,000
Rev. reserve 60,000
Less: Drawing 1,00,000
Total Equity 70,43,000
Total equity and liability 79,05,000

22
Notes(2016):
1 .Utility bill Worth of BDT 60,000 of which 48,000 is paid in cash and 12,000 is yet to be paid.
2. Interest expense BDT 4,000 of which 2,000 is for prev. year is paid by cash, means cash is
decreased and interest payable also.
3. Machineries revalued which worth of 2,00,000 that means value increased of BDT 50,000 where
prev. value was BDT 1,50,000. Accumulated depreciation of machineries is decreased. Revaluation
reserve is increased and this profit is un realized which is directly added to owner’s equity.
4. Machineries’ depreciation is calculated by straight line method.

1.

23