Financial Accounting Sample UAE

A.    i) Description of Business: The business is to provide electrical services in UAE. The business will provide electrical services to the companies in UAE which will also involve selling of electrical products. The company is named as Mitie Electrical Services Ltd and it is founded in Dubai, UAE.

ii) Below are the transactions for the business.

·         Started business with Cash AED 500000

·         Opened an account in DIB bank with AED 50000

·         Borrowed from Bank AED 1000000

·         Withdrawn from Bank AED 500000

·         Purchase of P&M AED 400000 on cash

·         Purchase of Furniture AED 200000 on credit from IKEA Ltd

·         Purchase of vehicles for business AED 100000 for cash

·         Purchased raw material from M/s ABC Ltd for AED 150000 on cash

·         Prepaid rent for 1 year AED 200000 cash

·         Withdrawal of cash for personal use AED 50000

·         Sold Goods to M/s XYZ Limited for AED 300000 on credit

·         Paid for advertisement expenses AED 20000 in cash

·         Paid Salaries AED 150000 from Bank

·         Sold Good to M/s AGB Trading on cash AED 30000 and discount allowed AED 3000

·         Good returned by XYZ limited for AED 50000

B.     Journal Entries and Trial Balance

S.No.	Date	Particulars	L.F.	Debit Amt	Credit Amt
1		Cash A/c		500000
		To Capital A/c			500000
2		Bank A/c		50000
		To Cash A/c			50000
3		Bank A/c Dr.		1000000
		To Loan A/c			1000000
4		Cash A/c		500000
		To Bank A/c			500000
5		P&M A/c		400000
		To Cash A/c			400000
6		Furniture A/c		200000
		To IKEA Ltd.			200000
7		Vehicles A/c		100000
		To Cash A/c			100000
8		Purchases A/c		150000
		To Cash A/c			150000
9		Prepaid Rent A/c		200000
		To Cash A/c			200000
10		Drawings A/c		50000
		To Cash A/c			50000
11		M/s XYZ Ltd		300000
		To sales			300000
12		Advertisement A/c		20000
		To cash A/c			20000
13		Salaries		150000
		To Bank A/c			150000
14		Cash		27000
		Discount Allowed		3000
		To Sales			30000
15		Sales Return A/c		50000
		To XYZ Ltd			50000

Trial Balance

Trial Balance
For the month ended Dec 2017
S.No.	Name of Accounts	L.F.	Debit Amt	Credit Amt
1	Cash A/c		57000
2	Bank A/c		400000
3	Capital A/c			500000
4	Loan A/c			1000000
5	P&M A/c		400000
6	Furniture A/c		200000
7	Purchases A/c		150000
8	IKEA A/c			200000
9	Vehicle A/c		100000
10	Sales Return A/c		50000
11	Prepaid Rent A/c		200000
12	Drawings A/c		50000
13	M/s XYZ A/c		250000
14	Sales A/c			330000
15	Salaries A/c		150000
16	Advertisement A/c		20000
17	Discount Allowed A/c		3000
	Total		2030000	2030000

C.     Transactions with Adjusting Entries

·         Rent adjusted out of prepaid rent AED 16666.67

·         Depreciation of P&M AED 4000

·         Accrued revenue for services rendered AED 50000

·         Depreciation of Furniture AED 2000

S.No.	Date	Particulars	L.F.	Debit Amt	Credit Amt
1		Rent A/c		16666.67
		To Prepaid Rent			16666.67
2		Depeciation Expense-P&M		4000
		To Accumulated Depreciation			4000
3		Accrued Billing		50000
		To Revenue			50000
4		Depeciation Expense-Furniture		2000
		To Accumulated Depreciation			2000

D.    Adjusted Trial Balance

Adjusted Trial Balance
Month Ended Dec 2017
S.No.	Name of Accounts	L.F.	Debit Amt	Credit Amt
1	Cash A/c		57000
2	Bank A/c		400000
3	Capital A/c			500000
4	Loan A/c			1000000
5	P&M A/c		400000
6	Furniture A/c		200000
7	Purchases A/c		150000
8	IKEA A/c			200000
9	Vehicle A/c		100000
10	Sales Return A/c		50000
11	Prepaid Rent A/c		183333.33
12	Drawings A/c		50000
13	M/s XYZ A/c		250000
14	Sales A/c			330000
15	Salaries A/c		150000
16	Advertisement A/c		20000
17	Discount Allowed A/c		3000
18	Rent A/c		16666.67
19	Accumulated Dep A/c			6000
20	Dep Expense A/c		6000
21	Revenue A/c			50000
22	Accured Billing A/c		50000
	Total		2086000	2086000

E.     Financial Statement

Income Statement

Income Statement
(for the year ending Dec 2017)
Dr.			Cr.
Particulars	Amount	Particulars	Amount
Purchases	150000	Sales	330000
Sales Return	50000	Revenue	50000
Gross Profit	180000
	200000		380000
Rent	16666.67	Gross Profit	180000
Advertisement	20000	Net Loss	15666.67
Discount Allowed	3000
Salaries	150000
Depreciation	6000
	195666.67		195666.67

Statement of Owner’s Equity

Statement of Owner's Equity
Capital			500000
- Drawings			-50000
- Net Loss			-15666.67
Ending Balance			434333.33

Balance Sheet

Balance Sheet
As on 31st Dec 2017
Dr.			Cr.
Liabilities	Amount	Assets	Amount
Capital A/c	500000	Cash A/c	57000
- Drawings	-50000	Bank A/c	400000
		P&M A/c	400000
Loan A/c	1000000	Furniture	200000
Creditor (IKEA)	200000	Vehicles	100000
		Prepaid Rent	183333.33
Net Loss	-15666.67	Debtor (M/s XYZ)	250000
		Accumulated Depreciation	-6000
		Accrued Billing	50000
	1634333.33		1634333.33

Bibliography

Horngren, Charles T.; Datar, Srikant M.; Foster, George (2006), Cost Accounting: A Managerial Emphasis (12th ed.), New Jersey: Pearson Prentice Hall

Lung, Henry (2009). Fundamentals of Financial Accounting. Elsevier.

Appendix

Ledger Accounts

Cash A/c
Dr.							Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
	Capital		500000		Bank		50000
	Bank		500000		P&M		400000
	Sales		27000		Vehicle		100000
					Purchases		150000
					Prepaid Rent		200000
					Drawings		50000
					Advertisement		20000
					Balance c/f		57000
			1027000				1027000

Capital A/c
Dr.							Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
	Balance C/f		500000		Cash		500000
			500000				500000

Bank A/c
Dr.							Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
	Cash		50000		Cash		500000
	Loan		1000000		Salaries		150000
					Balance c/f		400000
			1050000				1050000

Loan A/c
Dr.							Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
	Balance C/f		1000000		Bank		1000000
			1000000				1000000

P&M A/c
Dr.							Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
	Cash		400000		Balance c/f		400000
			400000				400000

Furniture A/c
Dr.							Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
	IKEA		200000		Balance c/f		200000
			200000				200000

Purchases A/c
Dr.							Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
	Cash		150000		Balance c/f		150000
			150000				150000

IKEA A/c
Dr.							Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
	Balance c/f		200000		Furniture		200000
			200000				200000

Vehicle A/c
Dr.							Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
	Cash		100000		Balance c/f		100000
			100000				100000

Sales Return A/c
Dr.							Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
	XYZ Ltd		50000		Balance c/f		50000
			50000				50000

Prepaid Rent A/c
Dr.							Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
	Cash		200000		Balance c/f		200000
			200000				200000

Drawings A/c
Dr.							Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
	Cash		50000		Balance c/f		50000
			50000				50000

M/s XYZ A/c
Dr.							Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
	Sales A/c		300000		Sales Return		50000
					Balance c/f		250000
			300000				300000

Sales A/c
Dr.							Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
	Balance c/f		330000		M/s XYZ		300000
					Cash		27000
					Discount Allowed		3000
			330000				330000

Advertisement A/c
Dr.							Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
	Cash A/c		20000		Balance c/f		20000
			20000				20000

Salaries A/c
Dr.							Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
	Bank A/c		150000		Balance c/f		150000
			150000				150000

Discount Allowed A/c
Dr.							Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
	Sales A/c		3000		Balance c/f		3000
			3000				3000

Ledger Accounts post Adjusting Entries

Note: This includes the accounts which are new and where there are changes

Prepaid Rent A/c
Dr.							Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
	Cash		200000		Rent		16666.7
					Balance c/f		183333
			200000				200000

Rent A/c
Dr.							Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
	Prepaid Rent		16666.7		Balance c/f		16666.7
			16666.7				16666.7

Depreciation Expense A/c
Dr.							Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
	Accumulated Dep		4000		Balance c/f		6000
	Accumulated Dep		2000
			6000				6000

Accumulated Depreciation A/c
Dr.							Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
	Balance c/f		6000		Depeciation Expense-P&M		4000
					Depeciation Expense-Furniture		2000
			6000				6000

Accrued Billing A/c
Dr.							Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
	Revenue		50000		Balance c/f		50000
			50000				50000

Revenue A/c
Dr.							Cr.
Date	Particulars	J.F.	Amount	Date	Particulars	J.F.	Amount
	Balance c/f		50000		Accured Billing		50000
			50000				50000