Report on

“Final Account of Three Companies”Course Name: Fundamental of Accounting

Course Code: FB-503

Prepared For

Prof. Md. Abu Taleb

Professor

Department of Banking and Insurance

EMBA Program

Faculty of Business Studies

University of Dhaka

Prepared By

Md. Ahsanul Karim

ID: 51324053

Department of Banking and Insurance

EMBA Program

Faculty of Business Studies

University of Dhaka

Date of Submission: 9th January, 2014

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UNIVERSITY OF DHAKA

Letter of Transmittal

January 9, 2014

Prof. Md. Abu Taleb

Professor

Department of Banking and Insurance

EMBA Program

Faculty of Business Studies

University of Dhaka

Subject: Submission report on “Final Account of Three Companies”

Dear Sir,

With due respect it is my pleasure to present the term paper entitled “Final Account of Three

Companies”. While preparing the report I have tried my level best to focus closely on the topic and

present all the data that is required for the assignment.

To prepare this term paper, I have given the best effort to accumulate needed information. I will be available to answer any question for clarification. Thank you for your sincere support.

Sincerely Yours

Md. Ahsanul Karim

ID: 51324053

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Acknowledgement

First of all I would like to thank the Almighty Allah for giving me the strength and the

aptitude to complete this report within due time. I am deeply indebted to my course

instructor Prof. Md. Abu Taleb for assigning me such an interesting topic named " Final

Account of Three Companies ".

I also express the depth of my appreciation to my honorable course teacher for his

suggestions and guidelines, which helped me in completing this report.

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Table of Contents

Acknowledgement...............................................................................................3

1.1 Trial Balance of A. K Company Ltd.................................................................5

1.2 Income Statement of A. K Company Ltd........................................................7

1.3 Balance Sheet of A. K Company Ltd...............................................................8

2.1 Trial Balance of Hossain Company Ltd...........................................................9

2.2 Income Statement of Hossain Company Ltd...............................................11

2.3 Balance Sheet of Hossain Company Ltd.......................................................12

3.1 Trial Balance of R & T Corporation..............................................................13

3.2 Income Statement of R & T Corporation.....................................................15

3.3 Balance Sheet of R & T Corporation............................................................16

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A. K Company Ltd.

1. Here given a trial balance of A.K Company Ltd. and some additional data for adjusting the

trial balance for the year ended on December 31, 2012.

1.1 Trial Balance of A. K Company Ltd.

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A.K Company LtdTrial Balance

December 31, 2012

Particulars Debit (Tk) Credit (Tk)

Cash 32,000

Accounts Receivable 67,200

Merchandise Inventory- January 2012 64,800

Land 69,600

Buildings 72,000

Long Term Investment 12,600

Insurance Expense 1,440

Accumulated Depreciation Buildings 19,800

Accounts Payable 44,000

Note Payable- short Term 15,000

Retained Earnings 14,020

Mortgage Payable 48,000

Capital 180,000

Drawing 14,400

Sales Revenue 246,000

Sales Return & Allowance 8,760

Interest Revenue 660

Purchase 138,480

Purchase Return & Allowance 1,140

Allowance for Doubtful Accounts 1,380

Freight in 3,600

Advertising Expense 4,800

Selling Expense 49,420

Supplies 4,200

Office Expense 16,080

Interest Expense 2,640

Doubtful Accounts Expense 7,980

Total 570,000 570,000

Additional Data:

1. The building is to be depreciated annually at the rate of 10 percent on cost.

2. The allowance for doubtful account is to be increased to tk. 3,000.

3. Interest on long term investment is earned but not yet been received amounting to

tk. 240.

4. Interest expense of tk. 480 has not yet been paid.

5. Selling expenses of tk. 3,840. remains unpaid.

6. Cost of merchandise inventory on December 31, 2012 estimated at tk. 90,720.

7. Supplies consumed during the year amounting to tk. 3.420.

8. Insurance expense still un-expired amounting to tk.720.

1.2 Income Statement of A. K Company Ltd.

A.K Company LtdIncome Statement

Year Ended December 31, 2012

Particulars Tk Tk Tk

Sales Revenue 246000

Less- Sales Return -8760

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Net Sales Revenue 237240

Cost of Goods Sold:

Beginning Inventory 64800

Add

Purchase 138480

Less- Purchase Return & Allowance -1140

Add- Freight in 3600

Net Purchase 140940

Cost of Goods Available for Sale 205740

Less- Ending Inventory -90720

Cost of Goods Sold 115020

Gross Profit 122220

Operating Expense:

Insurance Expense 720

Advertising Expense 4800

Selling Expense 53260

Office Expense 16080

Doubtful Expense 9600

Depreciation Expense 7200

Supplies Expense 3420

Total Operating Expense 95080

Income from Operation 27140

Other Income & Expense:

Interest Revenue 900

Less- Interest Expense -3120

Total Other Income & Expense -2220

Net Income 24920

1.3 Balance Sheet of A. K Company Ltd.

A.K Company LtdBalance Sheet

December 31, 2012

Particulars Tk Tk Tk Particulars Tk Tk

Asset Liabilities

Current Asset: Current Liabilities:

Cash 32000 Accounts Payable 44000

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Accounts Receivable 67200 Note Payable 15000

Supplies 780 Retained Earnings 14020

Inventory 90720Allowance for Doubtful Accounts 3000

Interest Receivable 240 Interest Payable 480

Prepaid Insurance 720 Selling Payable 3840

Total Current Asset 191660 Total Current Liabilities 80340

Long Term Asset: Long Term Liability:

Land 69600 Mortgage Payable 48000

Building 72000 Total Long Term Liability 48000Less- Accumulated Depreciation

-27000 45000 Owner's Equity:

Long Term Investment 12600 Capital 180000

Total Long Term Asset 127200 Add- Net Profit 24920

Less- Drawing -14400

Total Owner's Equity 190520

Total Asset 318860 Total Liability & Owner's Equity 318860

Hossain Company Ltd.

2. Here given a trial balance of Hossain Company Ltd. and some additional data for adjusting

the trial balance for the year ended on December 31, 2012.

2.1 Trial Balance of Hossain Company Ltd.

Hossain Company Ltd

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Trial BalanceDecember 31, 2012

Particulars Debit (Tk) Credit (Tk)Cash 18,600Accounts Receivable 41,250Merchandise Inventory- January 2012 20,800Supplies 5,000Property, Land & Equipment 107,800Note Receivable 3,750Accounts Payable 28,950Note Payable 25,000Capital 75,090Drawing 1,100Accumulated Depreciation Property, Land &Equipment 22060Allowance for Doubtful Accounts 850Sales 271,050Sales Return & Allowance 2,850Purchase 156,450Purchase Return & Allowance 2,000Transportation in 3,650Insurance Expense 1,450Salaries Expense 32,000Rent Expense 37,000Prepaid Advertising 6,000Transportation Out 2,300Interest Expense 1,000Rent Revenue 6000Consulting Revenue 10000

Total 441,000 441,000

Additional Data:

1. The company has a 6 days worksheet from Saturday through Thursday and weekly

payroll is Tk. 3600. Employees are paid every Thursday and December 31st is a

Tuesday.

2. Insurance expense represents a payment of insurance premium of Tk. 1200 for 2

years coverage. The payment was made on 1 August 2012.

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3. Prepaid advertising includes expired advertising expenses of Tk. 4500.

4. Merchandise inventory valued t Tk. 28000.

5. The supplies of inventory reveal that Tk 1000 of supplies are on hand.

6. Consulting fees are credited when received. Consulting fees of Tk 1500 are still

unearned.

7. Rent revenue earned but unrecorded amounting to Tk 2000.

8. Property, plant and equipment is to depreciated @ 7.5% on cost. It is a policy of the

company not to charge any depreciation for the asset sold at any time during an

accounting year and to charge full year depreciation.

9. The allowance for doubtful expense is to be raised to 10% on account receivable.

2.2 Income Statement of Hossain Company Ltd.

Hossain Company LtdIncome Statement

Year Ended December 31, 2012Particulars Tk Tk Tk

Sales Revenue 271050Less- Sales Return -2,850

Net Sales Revenue 268200Cost of Goods Sold:Beginning Inventory 20,800Add

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Purchase 156,450Less- Purchase Return & Allowance -2000Add- Freight in 3650

Net Purchase 158100Cost of Goods Available for Sale 178900Less- Ending Inventory -28000Cost of Goods Sold 150900

Gross Profit 117300Operating Expense:Insurance Expense 250Salaries Expense 34,400Rent Expense 37,000Transportation In 2,300Doubtful Expense 3,275Advertising Expense 4,500Depreciation Expense 8,085Supplies Expense 4000Total Operating Expense 93810

Income from Operation 23490Other Income & Expense:Rent Revenue 8000Consulting Revenue 8500Less- Interest Expense -1000Total Other Income & Expense 15500

Net Income 38990

2.3 Balance Sheet of Hossain Company Ltd.

Hossain Company LtdBalance Sheet

December 31, 2012Particulars Tk Tk Tk Particulars Tk Tk

Asset LiabilitiesCurrent Asset: Current Liabilities:Cash 18600 Accounts Payable 28950

Accounts Receivable 41250

Allowance for Doubtful Accounts 4125

Supplies 1000 Salary Payable 2400

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Inventory 28000Unearned Revenue 1500

Rent Receivable 2000Total Current Liabilities 36975

Prepaid Insurance 1200Long Term Liability:

Prepaid Advertising 1500 Note Payable 25000

Total Current Asset 93550Total Long Term Liability 25000

Long Term Asset:Note Receivable 3750 Owner's Equity:Property, Land & Equipment 107,800 Capital 75090Less- Accumulated Depreciation Property, Land & Equipment -30145 77,655 Add- Net Profit 38990

Less- Drawing -1100

Total Long Term Asset 81405Total Owner's Equity 112980

Total Asset 174955Total Liability & Owner's Equity 174955

R & T Corporation

3. Here given a trial balance of R & T Corporation and some additional data for adjusting the

trial balance for the year ended on December 31, 2012.

3.1 Trial Balance of R & T Corporation

R & T CorporationTrial Balance

December 31, 2012

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Particulars Debit (Tk) Credit (Tk)Cash 42,000Accounts Receivable 50,000Merchandise Inventory- January 2012 64,800Land 69,600Buildings 72,000Long Term Investment 12,600Insurance Expense 1,440Accumulated Depreciation Buildings 19,800Accounts Payable 28,000Note Payable- short Term 23,000Retained Earnings 14,020Mortgage Payable 48,800Capital 180,000Drawing 50,400Sales Revenue 284,000Sales Return & Allowance 8,760Interest Revenue 660Purchase 138,480Purchase Return & Allowance 1,140Allowance for Doubtful Accounts 1,380Freight in 5,600Advertising Expense 4,800Selling Expense 49,420Supplies 4,200Office Expense 16,080Interest Expense 2,640Doubtful Accounts Expense 7,980

Total 600,800 600,800Additional Data:

1. A part of selling expenses of tk. 3,840 hang about due.

2. Tk. 90,720.is estimated as ending inventory.

3. Enthusiastic supplies during the year amounting to tk. 3,420.

4. Un-expired insurance amounting to tk.720.

5. Interest on long term investment is earned but not yet been received amounting to

tk. 240.

6. Interest expense of tk. 480 has not yet been paid.

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7. The building is to be depreciated annually at the rate of 10 percent on cost.

8. The allowance for doubtful account is to be increased to tk. 3,000.

3.2 Income Statement of R & T Corporation

R & T CorporationIncome Statement

Year Ended December 31, 2012

Particulars Tk Tk Tk

Sales Revenue 284000

Less- Sales Return -8760

Net Sales Revenue 275240

Cost of Goods Sold:

Beginning Inventory 64800

Add

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Purchase 138480

Less- Purchase Return & Allowance -1140

Add- Freight in 5600

Net Purchase 142940

Cost of Goods Available for Sale 207740

Less- Ending Inventory -90720

Cost of Goods Sold 117020

Gross Profit 158220

Operating Expense:

Insurance Expense 720

Advertising Expense 4800

Selling Expense 53,260

Office Expense 16080

Doubtful Expense 9600

Depreciation Expense 7200

Supplies Expense 3420

Total Operating Expense 95080

Income from Operation 63140

Other Income & Expense:

Interest Revenue 900

Less- Interest Expense -3120

Total Other Income & Expense -2220

Net Income 60920

3.3 Balance Sheet of R & T Corporation

R & T CorporationBalance Sheet

December 31, 2012

Particulars Tk Tk Tk Particulars Tk Tk

Asset Liabilities

Current Asset: Current Liabilities:

Cash 42000 Accounts Payable 28000

Accounts Receivable 50000 Note Payable 23000

Supplies 780 Retained Earnings 14020

Inventory 90720Allowance for Doubtful Accounts 3000

Interest Receivable 240 Interest Payable 480

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Prepaid Insurance 720 Selling Payable 3840

Total Current Asset 184460 Total Current Liabilities 72340

Long Term Asset: Long Term Liability:

Land 69600 Mortgage Payable 48800

Building 72000 Total Long Term Liability 48800Less- Accumulated Depreciation

-27000 45000 Owner's Equity:

Long Term Investment 12600 Capital 180000

Total Long Term Asset 127200 Add- Net Profit 60920

Less- Drawing -50,400

Total Owner's Equity 190520

Total Asset 311660Total Liability & Owner's Equity 311660

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