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Transaction
ABC INC a partnership firm incorporated with a capital infusion of $ 1,00,000 where their
partnership ratio is 2:3:5 and it is decided that company will pay a interest @ 7% pa on their capital
value.
Company is located in SEZ so they applied for the grant and they received the same of $ 200,000.
After this receipt partner withdrawan the same.
Company has issued a commercial bonds worth of $ 300,000 @ 8% payable semi annually
Company has invested in equity share of $ 500,000 which was managed by a PMS company who
offered a average return of @ 12% whereas for this PMS will charge @ 2%
A common stock purchased of worth $ 100,000
An amount of $36,000 was paid as advance rent for three months.
Paid $60,000 cash on the purchase of equipment costing $80,000. The remaining amount was
recognized as a one year note payable with interest rate of 9%.
Purchased office supplies costing $17,600 on account.
Provided services to its customers and received $28,500 in cash.
Paid the accounts payable on the office supplies purchased on January 4.
Paid wages to its employees for first two weeks of January, aggregating $19,100.
Provided $54,100 worth of services to its customers. They paid $32,900 and promised to pay the
remaining amount.
Received $15,300 from customers for the services provided on January 18.
Received $4,000 as an advance payment from customers.
Purchased office supplies costing $5,200 on account.
Paid wages to its employees for the third and fourth week of January: $19,100.
Paid $5,000 as dividends.
Received electricity bill of $2,470.
Received telephone bill of $1,494.
Miscellaneous expenses paid during the month totaled $3,470
 Amount in USD
SR Account Debit Credit
1 Cash 1,000,000.00
Capital A 200,000.00
Capital B 300,000.00
Capital C 500,000.00

2 Cash 200,000.00
Government Grant 200,000.00

Capital A 40,000.00
Capital B 60,000.00
Capital C 100,000.00
Cash 200,000.00

Interest Expense A 11,200.00

Interest Expense B 16,800.00
Interest Expense C 28,000.00
Interest Payable 56,000.00

3 Cash 300,000.00
Commerical Bond 300,000.00

Interest Expense 12,000.00

Interest Payable 12,000.00

Interest paid 12,000.00

Interest Payable 12,000.00

4 Equity share capital 500,000.00

Cash 500,000.00

Interest Receivable 60,000.00

Interest Income 60,000.00

PMS Fees 10,000.00

Fee Payable 10,000.00

5 Cash 100,000.00
Common Stock 100,000.00

6 Prepaid Rent 36,000.00

Cash 36,000.00

7 Equipment 80,000.00
 Cash 60,000.00
Notes Payable 20,000.00

8 Office Supplies 17,600.00

Accounts Payable 17,600.00

9 Cash 28,500.00
Service Revenue 28,500.00

10 Accounts Payable 17,600.00

Cash 17,600.00

11 Wages Expense 19,100.00

Cash 19,100.00

12 Cash 32,900.00
Accounts Receivable 21,200.00
Service Revenue 54,100.00

13 Cash 15,300.00
Accounts Receivable 15,300.00

14 Cash 4,000.00
Unearned Revenue 4,000.00

15 Office Supplies 5,200.00

Accounts Payable 5,200.00

16 Wages Expense 19,100.00

Cash 19,100.00

17 Dividends 5,000.00
Cash 5,000.00

18 Electricity Expense 2,470.00

Utilities Payable 2,470.00

19 Telephone Expense 1,494.00

Utilities Payable 1,494.00

20 Miscellaneous Expense 3,470.00

Cash 3,470.00
 Trail Balance of ABC Inc.
Nature of
SR Account Particulars Debit Credit
1 Asset Cash 820,430.00 -
2 Asset Equity share Investment 500,000.00 -
3 Asset Prepaid Rent 36,000.00 -
4 Asset Equipment 80,000.00 -
5 Asset Accounts Receivable 5,900.00 -
6 Asset Interest Receivable 60,000.00 -
7 Expense Interest Expense 80,000.00 -
8 Expense PMS Fees 10,000.00 -
9 Expense Office Supplies 22,800.00 -
10 Expense Wages Expense 38,200.00 -
11 Expense Dividends 5,000.00 -
12 Expense Electricity Expense 2,470.00 -
13 Expense Telephone Expense 1,494.00 -
14 Expense Miscellaneous Expense 3,470.00 -
15 Income Government Grant - 200,000.00
16 Income Interest Income - 60,000.00
17 Income Common Stock - 100,000.00
18 Income Service Revenue - 82,600.00
19 Income Unearned Revenue - 4,000.00
20 Liability Commerical Bond - 300,000.00
21 Liability Capital - 800,000.00
22 Liability Interest Payable - 80,000.00
23 Liability Fee Payable - 10,000.00
24 Liability Notes Payable - 20,000.00
25 Liability Accounts Payable - 5,200.00
26 Liability Utilities Payable - 3,964.00
Total 1,665,764.00 1,665,764.00
 Financial Statements of ABC Inc.
Amount in USD
ABC Inc. Profit and Loss for the period ended Dec 2018
Interest Expense 80,000.00 Government Grant 200,000.00
PMS Fees 10,000.00 Interest Income 60,000.00
Office Supplies 22,800.00 Common Stock 100,000.00
Wages Expense 38,200.00 Service Revenue 82,600.00
Dividends 5,000.00 Unearned Revenue 4,000.00
Electricity Expense 2,470.00
Telephone Expense 1,494.00
Miscellaneous Expense 3,470.00
Surplus & (Defecit) 283,166.00
Total 446,600.00 Total 446,600.00

Amount in USD
ABC Inc. Balance Sheet At Dec 2018
Assets Amounts Liabilities Amounts
Equipment 80,000.00 Capital 800,000.00
Equity share Investment 500,000.00 Surplus & (Defecit) 283,166.00
Cash 820,430.00 Commerical Bond 300,000.00
Accounts Receivable 5,900.00 Interest Payable 80,000.00
Interest Receivable 60,000.00 Fee Payable 10,000.00
Prepaid Rent 36,000.00 Notes Payable 20,000.00
Accounts Payable 5,200.00
Utilities Payable 3,964.00
Total 1,502,330.00 Total 1,502,330.00

Amount in USD
ABC Inc. Cash flow statement for the period ended Dec 2018
Opening Balance -
Cash flow from Operations
Common Stock 100,000.00
Service Revenue 61,400.00
Accounts Receivable 15,300.00
Unearned Revenue 4,000.00
Prepaid Rent (36,000.00)
Accounts Payable (17,600.00)
Wages Expense (38,200.00)
Miscellaneous Expense (3,470.00)
Cash flow from Investments
Equity share Investment (500,000.00)
Equipment (60,000.00)
Cash flow from Financing
Government Grant 200,000.00
Capital 800,000.00
Commerical Bond 300,000.00
Dividends (5,000.00)
Closing Balance 820,430.00