INTRODUCTION TO FINANCIAL ACCOUNTING

To: Prof. Syed Azeem Ahmad

Group Members

Zubair Javaid
Jawad Imtiaz
Hassnain Ali
Question:

•On 1st March 2019 a machine was purchased for Rs 80,000 Rate of
Depreciation is 6% p.a. Prepare machinery Account for 3 years when
depreciation is charged under Diminishing Balance Method
Solution:
Years= 3 Cost= 80,000
Date= 1-March-2019 Rate= 6%
Method= Diminishing Balance Method
 Machine Account
Date Detail Rupees Date Detail Rupees

1-March-2019 Bank 80,000 31-Dec-2019 Depriciation

80,000 * 6/100 * 10/12 4000
76,000
Balance c/d

80,000 80,000

1-Jan-2020 Balance b/d 76,000 31-Dec-2020 Depriciation

80,000 * 6/100 * 10/12 4560
71,440
Balance c/d

76,000 76,000

1-Jan-2021 Balance b/d 71,440 31-Dec-2021 Depriciation

80,000 * 6/100 * 10/12 4286
67,154
Balance c/d

71,440 71,440
Question:

Mr. Farhan Enterprises keeps the data in

LIFO(Last in First out) for month of August
2020.

1st Aug :Balance 100 units @ 10 each

7th Aug: Received 150 units @ 12 each
13th Aug: Received 350 units @ 14 each
20th Aug : Issued 60 units
26thAug: Received 50 units @ 15 each
 Mr. Farhan Enterprises
LIFO
For the month of August,2020

Date Received Issued Balance

Unit Rate Amount Unit Rate Amount Unit Rate Amount

1 Aug 2020 100 10 1000
7 Aug 2020 150 12 1800 100 10 1000
150 12 1800
13 Aug 2020 350 14 4900 100 10 1000
150 12 1800
350 14 4900
20 Aug 2020 60 14 840 100 10 1000
150 12 1800
290 14 4,060
26 Aug 2020 50 15 750 100 10 1000
150 12 1800
290 14 4,060
50 15 750
7,610
Question:

Enter the following transactions for General Journal for

month of moth of Feb 2020.

1st Feb: Mr. Ahsan started business with cash Rs

6,00,000.
2nd Feb: Purchased good for Rs 50,000.
6th Feb: Purchased land for cash Rs 1,00,000.
9th Feb: Sold goods for cash Rs 20,000.
13th Feb: Received bonus Rs 25,000.
 Mr. Ahsan
General Journal
For the Month of Feb 2020

Date Details L/F Debit Credit

1 Feb 2020 Cash Account 6,00,000
Capital Account 6,00,000
(Being started Business with cash)
2 Feb 2020 Purchases Account 50,000
Cash Account 50,000
(Being s goods for cash)
6 Feb 2020 Land Account 1,00,000
Cash Account 1,00,000
(Being purchased land for cash )
9 Feb 2020 Cash Account 20,000
Sales Account 20,000
(Being sold goods for cash )
13 Feb 2020 Cash Account 25,000
Bonus Account 25,000
(Being sold goods for cash)

Total 7,95,000 7,95,000