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FINANCIAL STATEMENTS OF OK GARMENTS

After collecting the information from the owner of OK GARMENTS, the whole group tried to
put in a lot of efforts in drafting the financial statements of the sole trader and tried to
make this report a complete source of information on the accounts of a sole
proprietorship.

Ok Garments
Transactions for the month of October, 2010

Date Particulars

3 partners Ali, Sana and Sundus starting business with


investing 40000000 total capital
Where ali invested 20000000 cash
Sana invested 7000000 inventory
3000000 cash
October
Sundus invested 2500000 account receivable
2
3000000 invetory
3500700 office equipments
1000000 building
700000 accounts payable
70000 allowance for bad debts
October
Paid Rs. 8000 in advance for advertisement
3
October
Sales made on credit card of amount 2100
6
October
Sales made on credit card of amount 2775
8
October
Sold Sweaters of Rs. 15000 on cash
9
October
Paid rent of July and August and maintenance of Rs 3980
9
October
Paid petrol expense of Rs. 1000
15
October
Sold children garments of Rs.35000
15
October
Sold coats of Rs. 25900 on cash
16
October
Sold 5 (two pieces )Suits of Rs. 6500 each on cash(32500)
17
October
Sold Sweaters of Rs. 19600 on cash
18
October
Sale Kurtas and T shirt of 6000 on cash
18
October
Sold 5 shalwar kameez of 2500 each on cash 12500
19
October
Ali took Rs.25000 cash from the business.
19
Oct0ber
Sundus also withdraw 25000 from business
20
October Purchased inventory of Rs. 14100 from Bonanza Garments
20 (30% bill payable)
October
Purchased inventory of Rs. 21750 from Bonanza Garments
20
October
Sold children garments of Rs.25000
21
October
Sold 3 (two pieces )Suits of Rs. 6500 each on cash(19500)
24
October
Sold coats of Rs. 30000 on cash
28
October
Sold different clothes of Rs. 56000 on cash
29
October
Sales made on Credit card of Rs 13770
30
October
Paid salary expense of Rs. 55000
31
October
Paid electricity Expense of Rs. 5776.46
31
October
Sundus and Sana withdraw 30,000 cash
31
October
Paid telephone expense of Rs. 420
31
October
Depreciation expense Furniture : Rs. 1267
31
Add a new partner Sarah who invested 30000000 cash and
receive 15% interest on net income. Also mention any
October
bonous received to either the new or the old partners. The
31
bonus to old partners will be distributed in according to
their profit sharing ratio
October
Depreciation expense Splits: Rs. 983
31
October
Depreciation expense Fixtures and fittings: Rs. 2892
31
October
Depreciation expense Shutters : Rs. 333
31
October
Office supplies used Rs. 5000
31
October
Paid electricity Expense of Rs. 5776.46
31
October
Purchased inventory of Rs. 21750 from Bonanza Garments
31
October
Paid rent of July and August and maintenance of Rs 3980
9
October
Sold children garments of Rs.25000
21
October
Sold Sweaters of Rs. 15000 on cash
9
October
Paid salary expense of Rs. 55000
31
October
Sold coats of Rs. 25900 on cash
16
October
Sale Kurtas and T shirt of 6000 on cash
18
October
Paid petrol expense of Rs. 1000
15
October
Paid Rs. 8000 in advance for advertisement
3
October
Sold Sweaters of Rs. 19600 on cash
18
October Sarah withdrawal 5000 cash from the business for personal
31 use
October Purchased inventory of Rs. 14100 from Bonanza Garments
20 (30% bill payable)
October
Owner took Rs.25000 cash from the business.
19
October
Paid electricity Expense of Rs. 5776.46
31
October
Sales made on credit card of amount 2100
6
October
Paid telephone expense of Rs. 420
31
October
Sold Sweaters of Rs. 19600 on cash
18
October
Sold Bonanza kamiz shalwar of Rs. 5000 on account
2
October
Sold children garments of Rs.35000
15
OK GARMENTS
GENERAL JOURNAL

Date Accounts L.P Debit Rs Credit Rs


Oct 02,2010 Accounts reciveable 250000
Inventory 10000000
Cash 23769300
Office equipments 3500700
building 1000000
Capital Ali 20000000
Capital Sana 10000000
Capital Sundus 10000000
Accounts payable 700000
Allowance for bad 70000
debts
Ali, sana, sundus invested capital with
a ratio of 2:1:1
Oct 03,2010 Prepaid Advertising 8000
Cash 8000
Paid Rs. 8000 in advance for
advertisement
Oct 06,2010 Cash 2100
Sale 2100
Sales made on credit card of amount
Rs.2100
Oct 08,2010 Cash 2775
Sale 2775
Sales made on credit card of amount
Rs.2775

Oct 09,2010 Cash 15000


Sale 15000
Sold Sweaters of Rs. 15000 on cash

Oct 09,2010 Rent & Maintenance Expense 3980


Cash 3980
Paid rent of July and August and
maintenance of Rs 3980
Oct 15,2010 Petrol Expense 1000
Cash 1000
Paid petrol expense of Rs. 1000
Oct 15,2010 Cash 35000
Sale 35000
Sold children clothes of Rs. 35000 on
cash
Oct 31,2010 Salaries Expense 55000
Cash 55000
Paid salary expense of Rs.55000 to
employees.
Oct 17,2010 Cash 32500
Sale 32500
Sold 5 (two pieces )Suits of Rs. 6500
each on cash(32500)
Oct 18,2010 Cash 19600
Sale 19600
Sold Sweaters of Rs. 19600 on cash

Oct 18,2010 Cash 6000


Sale 6000
Sale Kurtas and T shirt of Rs.6000 on
cash
Oct 19,2010 Cash 12500
Sale 12500
Sold 5 shalwar kameez of 2500 each
on cash 12500
Oct 19,2010 Drawings(ali) 25000
Cash 25000
ali took Rs.25000 cash from the
business
Oct 20,2010 Inventory 14100
Cash 9870
Account Payable 4230
Purchased inventory of Rs. 14100 from
Bonanza Garments (30% bill payable)

Oct 20,2010 Inventory 21750


Cash 21750
Purchased inventory of Rs. 21750 from
Bonanza Garments
Oct 21,2010 Cash 25000
Sale 25000
Sold children garments of Rs.25000

Oct 24,2010 Cash 19500


Sale 19500
Sold 3 (two pieces )Suits of Rs. 6500
each on cash(19500)
Oct 28,2010 Cash 30000
Sale 30000
Sold coats of Rs. 30000 on cash

Oct 29,2010 Cash 56000


Sale 56000
Sold different clothes of Rs. 56000 on
cash
Oct 30,2010 Cash 13770
Sale 13770
Sales made on Credit card of Rs 13770

Oct 31,2010 Salaries Expense 55000


Cash 55000
Paid salary expense of Rs.55000 to
employees.
Oct 31,2010 Electricity Expense 5776
Cash 5776
Paid Electricity Expense of Rs.5776

0ct 31,2010 Drawing (sana) 15000


Cash 15000
Oct 31,2010 Telephone Expense 420

Cash 420
Paid telephone expense of Rs. 420
Oct 31,2010 Depreciation Expense: Furniture 1267

Accumulated Depreciation: 1267


Furniture
To record Depreciation expense of
Furniture Rs.1267
oct 31, 2010 Cash 30000000
Capital ali 9750000
Capital sana 4875000
Capital sundus 4875000
Capital sarah 10500000
Oct 31,2010 Depreciation expense: Splits 983
Accumulated 983
Depreciation: Splits
To record Depreciation expense of
Splits Rs. 983
Oct 31,2010 Depreciation expense: Fixtures and 2892
fittings
Accumulated Depreciation: 2892
Fixtures and fittings
To record Depreciation expense of
Fixtures and fittings Rs.2892
Oct 31,2010 Depreciation expense: Shutters 333
Accumulated Depreciation: 333
Shutters
To record Depreciation expense of
Shutters Rs.333
Oct 31,2010 Office Supplies Expense 5000
Office Supplies 5000
Office Supplies of Rs .5000 consumed
in the month of October.
Oct 31,2010 uncollectible account expense 2000
allowances for 2000
uncollectible accounts
To Record uncollectible amount of
Rs.2000
Oct 31,2010 Cost of goods sold 195420
Inventory 195420

To Record cost of goods sold(65% of


sale Rs.300645)
Oct 31,2010 Electricity Expense 5776
Cash 5776

Paid Electricity Expense of Rs.5776

Oct 20,2010 Inventory 21750

Cash 21750

Purchased inventory of Rs. 21750 from


OK GARMENTS

GENERAL LEDGER

OFFICE SUPPLIES (Rs.)


CASH ACCOUNT (Rs.) 01/10 3500700 31/10 5000
01/10 23769300 03/10 8000
06/10 2100 09/10 3980
08/10 2775 15/10 1000
09/10 15000 19/10 25000
15/10Rs.35000 20/10 9870
16/10Rs.25900 20/10 21750
17/10Rs.32500 31/10 55,000
18/10Rs.19600 31/10 5776
18/10 Rs.6000 31/10 420 Rs.15,000
19/10Rs.12500 19/10 25000
21/10Rs.25000 20/10 25000
24/10Rs.19500 31/10 15000
28/10Rs.30000 31/10 5000
29/10Rs.56000
30/10 13770 PREPAID ADVERTISING
EXPENSE
03/10 Rs.8000

Rs.2386414
9

Rs.8,000

FURNITURE
INVENTORY ACCOUNT Rs Bal: Rs.250000
01/10 10000000 31/10 195420
20/10 14100
20/10 21750

Rs.250,000
ACCOUNT PAYABLE
01/10 Rs.70000
SPLITS
20/10 4230 Bal: Rs.64000

Rs.4,230
Rs.64,000

SALARIES EXPENSE FIXTURES & FITTINGS


31/10Rs.55,000 Bal:Rs.350000

Rs.55,000 Rs.350,000

DRAWINGS
19/10
SHUTTERS
Rs. 25000 Bal:
20/10 Rs.100000
Rs. 25000
31/10
Rs. 15000
31/10
Rs. 5000

Rs.70,000
Rs.100,000
RENT & DEPRICIATION EXPENSE:
MAINTENANCE FURNITURE
PAYABLE 31/10 Rs.1267
09/10 Rs.3980 31/07 Rs.1990
31/08 Rs.1990
31/09 Rs.1990
31/10 Rs.1990

Rs.1,267
Rs.3980

ACCUMULATED
ELECTRICITY EXPENSE
DEPRICIATION:
31/10
Rs.5776.46 FURNITURE
31/10 Rs.1267

Rs.5,776.46
Rs.1,267

TELEPHONE EXPENSE
31/10 Rs.420 PETROL EXPENSE
15/10 Rs.1000

Rs.420
Rs.1,000
uncollectible account
expense
31/10 Rs.2000
OWNER’S CAPITAL
31/10 drawing 25000 Bal: Rs.1759279
31/10 income 26,574

Rs.2,000
DEPRICIATION
EXPENSE: FIXTURE &
Rs .1760853
FITTINGS ACCUMULATED
31/10 Rs.2892 DEPRICIATION:
FIXTURE & FITTINGS
31/10 Rs.2892
31/10 1574
Rs.2,892

SALES
02/10 Rs.5000
06/10 Rs.2100
08/10 Rs.2775
09/10 Rs.15000
15/10 Rs.35000 Rs.2,892
16/10 Rs.25900 DEPRICIATION EXPENSE:
17/10 Rs.32500
18/10 Rs.19600 SHUTTERS
18/10 Rs.6000 31/10 Rs.333
19/10 Rs.12500
21/10 Rs.25000
24/10 Rs.19500
28/10 Rs.30000
29/10 Rs.56000
30/10 Rs.13770

Rs.300,645 Rs.333
DEPRICIATION EXPENSE:
SPLITS ACCUMULATED
31/10 Rs.983 DEPRICIATION: SPLITS
31/10 Rs.983

Rs.983
Rs.983

ACCUMULATED RENT & MAINTENANCE


DEPRICIATION: Expense
SHUTTERS 09/10 Rs.3980
31/10 Rs.333

Rs.3980
Rs.333

Allowance for uncollectable Cost of Goods Sold


accounts 31/10Rs.195420
31/10 bad debts 2000

Rs. 195,420
Rs.2000
ACCOUNT
RECEIVABLE
01/10 31/10 Rs.2000
Rs.2500000
02/10 5000

Rs.3,000
OK GARMENTS
ADJUSTED TRIAL BALANCE
OCTOBER 31, 2010

ACCOUNTS DEBIT Rs. CREDIT Rs.


Cash 23864149
Account Receivables 5000
Allowances for uncollectable accounts N16 2000
Office Supplies 15000
Inventory 1004580
Cost of Goods sold N18 195420
Furniture 250000
Accumulated Depreciation Furniture 62067
Splits 64000
Accumulated Depreciation Splits N5 9833
Fixture & Fittings 350000
Accumulated Depreciation Fixture & Fittings 179284
Shutters 100000
Accumulated Depreciation Shutters 40333
Prepaid Advertising 8000
Drawings 70000
Rent & Maintenance Expense 3980
Petrol Expense 1000
Sales 300645
Account Payable 4230
Rent & Maintenance payable 3980
Owner’s Capital 1759279

Salaries expense N15 55000


Electricity expense N11 5776
Telephone expense N10 420
Bad debts expense 2000
Office Supplies expense 5000
Depreciation expense: furniture N2 1267
Depreciation expense: splits 983
Depreciation expense: 2892
Fixtures and fittings N6
Depreciation expense: 333
Shutters N9

TOTAL 235965 2359651


1
OK GARMENTS
INCOME STATEMENT
FOR THE PERIOD ENDED OCTOBER 31, 2010
REVENUE: Rs.
Sales 300,645
Less: cost of goods sold (195,420
)
Gross Profit 105,225

Less EXPENSES:
Rent & Maintenance expense 3980
Petrol Expense 1000
Salaries expense 55000
Electricity expense 5776
Telephone expense 420
Bad debts expense 2000
Office Supplies expense 5000
Depreciation expense: furniture 1267
Depreciation expense: splits 983
Depreciation expense: 2892
Fixtures and fittings
Depreciation expense: 333
Shutters

(78651)
NET INCOME 26,574
OK GARMENTS
BALANCE SHEET
OCTOBER 31, 2010

ASSETS Rs. AMOUNT


Rs.
CASH 266000
Account receivable
5000
allowances for uncollectible accounts 3000
(2000)
Prepaid advertising 8000
Office supplies 15000
Furniture 250000 187933
Accumulated depreciation: Furniture (62067)
Splits 64000 54167
Accumulated depreciation: Splits (9833)
Fixtures & fittings 350000 170716
Accumulated depreciation: (179284)
Fixture and fittings
Shutters 100000 59667
Accumulated depreciation: (40333)
Shutters
Total Assets 1769063

LIABILITIES & OWNER’S EQUITY AMOUNT


Rs
LIABILITIES:
Account payable 4230
Rent & Maintenance payable 3980

OWNER’S EQUITY:
Owner’s Capital (opening)
1759279
Add: Net Income
26,574
Less: Drawings
(25000)
1760853
TOTAL LIABILITIES & OWNER’S EQUITY Rs.1769063
OK GARMENTS
WORK SHEET
FOR THE PERIOD ENDED OCTOBER 31, 2010

BALANCE SHEET TRIAL BALANCE ADJUSTMENTS ADJUSTED INCOME BALANCE SHEET


ACCOUNTS TRIAL BALANCE STATEMENT
DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT
CASH 327196 61196 266000 266000
Account receivable 5000 5000 5000
Allowances for Bad 2000 2000 2000
Debts
Prepaid advertising 8000 8000 8000
Inventory 1200000 195420 1004580 1004580
Cost of Goods Sold 195420 195420 195420
Office supplies 20000 5000 15000 15000
Furniture 250000 250000 250000
Accumulated 60800 1267 62067 62067
depreciation:
Furniture
Splits 64000 64000 64000
Accumulated 8850 983 9833 9833
depreciation: Splits
Fixtures & fittings 350000 350000 350000

Accumulated 176392 2892 179284 179284


depreciation:
Fixture and fittings
Shutters 100000 100000 100000
Accumulated 40000 333 40333 40333
depreciation:
Shutters
Petrol expense 1000 1000 1000
Account payable 4230 4230 4230
Rent & Maintenance 3980 3980 3980
payable
Rent & Maintenance 3980 3980 3980
expense
Drawings 25000 25000 25000
Sales 300645 300645 300645
Owner’s Capital 1759279 1759279 1759279
2354176 2354176

Salaries expense 55000 55000 55000


Electricity expense 5776 5776 5776
Telephone expense 420 420 420
Uncollectible 2000 2000 2000
Accounts expense
Office Supplies 5000 5000 5000
expense
Depreciation 1267 1267 1267
expense: furniture
Depreciation 983 983 983
expense: splits
Depreciation 2892 2892 2892
expense:
Fixtures and fittings
Depreciation 333 333 333
expense:
Shutters
2359651 2359651
Net Profit 26,574 26574

Total 2085580 2085580