The document summarizes transactions for Friends & Company Ltd., a business selling books and stationery. It lists 40 transactions for the year 2016, including purchasing inventory, selling goods, paying expenses, and receiving payments from customers. It then provides a trial balance and additional financial information to adjust account balances at the end of the year.

1. 1 | P a g e
Group Members:
Sadam Hussain (35867)
Fayyaz Ahmed (33732)
Hunain Tunio (35839)
Faizan saddiq (35316)
Name of Business:
Friends &Company ltd
Product:
Books, Stationary, Cash Memoe.t.c
Submitted to:
DR. Muhammad Irfan Khan

2. 2 | P a g e
Ms. Nida commences business on Jan 2016 as a Selling Books, Stationary, and Cash
Memo etc, under the name of “Friends & Company ltd”.
Friends had done the following transactions duringthe year 2016.
1) Ms. Nida invested 500,000 as a cash in business.
2) Purchased office furniture for 50,000 as cash.
3) Purchased generator for 65,000. It has five year life.
4) Depreciation expense on furniture 12,000.
5) Bought delivery vehicle for business in 200,000, it has 3 year life.
6) Paid rent expense for 3 months 30,000.
7) Paid advertisement expense 25,000.
8) Purchased goods on cash 80,000.
9) Paid transportations charges 7,000.
10) Sale books & stationary to Kareem & Co for 40,000.
11) Borrowed 1000,000 from bank and sign Note payable @ 10% interest rate p.a.
12) Purchase supplies from Shahid & Sons for 25,000.
13) Purchase office equipment for 45,000
14) Salaries paid to workers 18,000.
15) Ms. Nida withdrew 3000 from business for personal used.
16) Paid rent for a year in advance 120,000.
17) Ownerinvested additional investment in business 200,000.
18) Purchased goods from XY on account 500,000.
19) Sold goods to Pervaiz 120,000 on account.
20) Payment through cash to Shahid & Sons 20,000.
21) Received cash from Pervaiz 100,000.
22) Bought office Stationary on cash 20,000.
23) Bad debts expense incurred 2,000.
24) Pay off misc.expense 1,500.

3. 3 | P a g e
25) SaleBooks to Pervaiz amounted rupees 100,000.Received cash 50,000 &
remaining sign account receivable.
26) Paid utilities expense 300.
27) Sales return by Pervaiz10,000.
28) Equipment was used by worker 1,100.
29) Received cash from Pervaiz15,000.
30) Received cash from Kareem & Co25,000.
31) Pay off delivery vehicleinsurance expense 16,667.
32) Sale books & stationary to ABC of 25,000.Received cash 15,000 & remaining
sign account receivable.
33) Sale on cash&received 350,000.
34) Withdrew cash for personal used 4,000.
35) Purchased return to XY costing rupees 2,900.
36) Paid cash 5,000 for card printing expense.
37) Paid cash to XY100,000.
38) Purchased goods from Oxford on account 27,000.
39) Received cash from ABC10,000
40) Advance rent was expired on 1st march, 2016.

4. 4 | P a g e
Friends &Company ltd
General Journal Entries
For the year ended 2016
S.No Description P/R Dr Cr
1
2
3
4
5
6
7
8
9
10
Cash
Capital
( To record Nida invested 500,000 )
500,000
50,000
65,000
12,000
200,000
30,000
25,000
80,000
7,000
40,000
500,000
50,000
65,000
12,000
200,000
30,000
25,000
80,000
7,000
40,000
Furniture
Cash
(To record Purchased office furniture for 50,000)
Generator
Cash
(To record Purchased generator for 65,000 )
Dep. Expense
Cash
( record dep. expense for 12,000 )
Vehicle
Cash
( purchased vehicle on cash )
Prepaid Rent
Cash
( Paid advance rent for 3 months )
Advertisement Expense
Cash
( Pay advertisement )
Purchased
Cash
( Purchased on cash )
Transportation Expense
cash
( Paid transportation charges )
Account Receivable
Sale revenue
(sales on account)

5. 5 | P a g e
S.No Description P/R Dr Cr
11
12
13
14
15
16
17
18
19
20
21
22
Cash
Loan Payable
( Taking loan from bank )
1000,000
25,000
45,000
18,000
3,000
120,000
200,000
500,000
120,000
20,000
100,000
20,000
1000,000
25,000
45,000
18,000
3,000
120,000
200,000
500,000
120,000
20,000
100,000
20,000
Supplies
Cash
( purchased supplies on cash )
Office Equipment
Cash
(Purchased equipment on cash)
Salaries Expense
Cash
(paid salaries to staff)
Drawing
Cash
( Withdrew for personal use )
Prepaid Rent
Cash
( Paid advance rent for one year )
Cash
Capital
( To record Nida invested 200,000 )
Purchases
Account Payable
(Purchased on account)
Account Receivable
Sales Revenue
( Sale on account )
Account Payable
Cash
(Pay cash toCustomer)
Cash
Account Payable
( Cash received from creditor )
Office Stationary
Cash
( Purchase office stationary )

6. 6 | P a g e
S.No Description P/R Dr Cr
23
24
25
26
27
28
29
30
31
32
Bad debts Expense
A/w for Bad debts
(To record bad debts expense)
2,000
1,500
50,000
50,000
300
10,000
1,100
15,000
25,000
5,000
15,000
10,000
2,000
1,500
100,000
300
10,000
1,100
15,000
25,000
5,000
25,000
Misc. Expense
Cash
( Pay off misc. expense )
Cash
Account Receivable
Sales
(sales on account)
Utilities Expense
Cash
( Paid utilities expense )
Sales Return
Cash
( Sales return by Customer )
Equipment Expense
Equipment
( Equipment was used )
Cash
Account Receivable
(Received cash from customer)
Cash
Account Receivable
( Received cash from customer )
Insurance Expense
Cash
( Pay off insurance expense )
Cash
Account Receivable
Sales
(sale on account & cash)

7. 7 | P a g e
S.No Description P/R Dr Cr
33
34
35
36
37
38
39
40
Cash
Sale
( Sold on cash )
350,000
4,000
2,900
5,000
100,000
27,000
10,000
30,000
350,000
4,000
2,900
5,000
100,000
27,000
10,000
30,000
Drawing
Cash
( Withdrew cash for personal use )
Cash
Purchase Return
( Purchase return to supplier )
Printing Expense
Cash
( Paid cash for printing expense )
Account Payable
Cash
( Paid cash to Supplier )
Purchased
Account Payable
(Purchased goods on account)
Cash
Account Receivable
(Received cash from customer)
Rent Expense
Prepaid Rent
(Advance rent was expired)

8. 8 | P a g e
Friends &Company ltd
Ledger Accounts
For the year ended 2016
I-CASH
01. 500,000
10. 1000,000
16. 200,000
20. 100,000
24. 50,000
28. 15,000
29. 25,000
31. 15,000
32. 350,000
37. 2,900
39. 10,000
02. 50,000
03. 65,000
04. 12,000
05. 200,000
06. 30,000
07. 25,000
08. 80,000
12. 7,000
13. 25,000
15. 45,000
19. 18,000
21. 3,000
23. 120,000
25. 20,000
30. 20,000
33. 1,500
35. 300
36. 10,000
5,000
100,000
30,000
C/F 13,92,100
22,67,900
B/F13,92,100
22,67,900
ii-Account Receivable
09. 40,000
18. 120,000
24. 50,000
31. 10,000
20. 15,000
27. 25,000
28. 10,000
C/F170,000
220,000
B/F 170,000
220,000

9. 9 | P a g e
iii- Generator
06. 65,000
C/F 65,000
65,000
B/F 65,000
65,000
iv- Furniture
02. 50,000
C/F50,000
50,000
B/F50,000
50,000
v- Vehicle
04. 200,000
C/F 200,000
200,000
B/F 200,000
200,000
vi- Supplies
11. 25,000
C/F25,000
25,000
B/F25,000
25,000
vii- Office Equipment
21. 45,000 26. 1,100
C/F 43,900
45,000
B/F 43,900
45,000

10. 10 | P a g e
viii- Purchased
07. 80,000
17. 500,000
38. 27,000
C/F6,07,000
6,07,000
B/F6,07,000
6,07,000
ix- Prepaidrent
05. 4,500
15. 18,000
41. 4,500
C/F18,000
22,500
B/F18,000
22,500
x- Drawing
13. 3,000
33. 2,000 C/F 5,000
5,000
B/F 5,000
5,000
xi- Advertisement Expense
06. 1,800
C/F1,800
1,800
B/F1,800
1,800
xii- TransportationExpense
08. 1,200
C/F 1,200
1,200
B/F 1,200
1,200

11. 11 | P a g e
xiii-Salary Expense
12. 20,000
C/F20,000
20,000
B/F20,000
20,000
xiv- DepreciationExpense
14. 13,500
C/F13,500
13,500
B/F13,500
13,500
xv- Bad debt Expense
22. 1,450
C/F 1,450
1,450
B/F 1,450
1,450
xvi- Equipment Expense
26. 1,050
C/F1,050
1,050
B/F1,050
1,050
xvii- Utilities Expense
25. 450
C/F450
450
B/F450
450

12. 12 | P a g e
xviii-Misc Expense
23. 1,700
C/F1,700
1,700
B/F1,700
1,700
xix- Insurance Expense
30. 1,450
C/F1,450
1,450
B/F1,450
1,450
xx- Printing Expense
35. 2,100
C/F 2,100
2,100
B/F 2,100
2,100
xxi- Sales Return
27. 2,000
C/F2,000
2,000
B/F2,000
2,000
xxii- Sales Discount
37. 1,350
C/F1,350
1,350
B/F1,350
1,350

13. 13 | P a g e
xxiii- Capital
C/F400,000
01. 200,000
16. 200,000
400,000 400,000
B/F400,000
xxiv-Sales Revenue
C/F493,500
09. 20,000
18. 115,000
24. 48,000
31. 43,000
32. 200,000
34. 67,500
493,500 493,500
B/F493,500
xxv- Note Payable
C/F500,000
10. 500,000
500,000 500,000
B/F500,000
xxvi- Account Payable
19. 20,000
36. 50,000
40. 45,000
C/F225,000
11. 30,000
17. 200,000
38. 110,000
340,000 340,000
B/F225,000
xxvii-Purchase Return
C/F45,000
40. 45,000
45,000 45,000
B/F45,000

14. 14 | P a g e
xxviii- Acc Dep ( Plant )
C/F12,000
14. 12,000
12,000 12,000
B/F12,000
xxix- Acc Dep ( Furniture )
C/F1,500
10. 1,500
1,500 1,500
B/F1,500
xxx- Allowance for Bad debt
C/F1,450
10. 1,450
1,450 1,450
B/F1,450

15. 15 | P a g e
Friends &Company ltd
Unadjusted Trial Balance
For the year ended 2016
S.No Title of Account Dr Cr
01 Cash 620,450
02 AccountReceivable 49,500
03 Plant 150,000
04 Furniture 70,000
05 Vehicle 300,000
06 Supplies 30,000
07 Office Equipment 22,950
08 Purchased 360,000
09 Prepaid Rent 18,000
10 Drawing 5,000
11 AdvertisementExpense 1,800
12 Transportation Expense 1,200
13 Salary Expense 20,000
14 Rent Expense 4,500
15 Depreciation Expense 13,500
16 Bad debts Expense 1,450
17 EquipmentExpense 1,050
18 Utilities Expense 450
19 Misc. Expense 1,700
20 InsuranceExpense 1,450
21 PrintingExpense 2,100
22 Sales Return 2,000
23 Sales Discount 1,350
24 Capital 400,000
25 Sales Revenue 493,500
26 Note Payable 500,000
27 AccountPayable 225,000
28 Purchase Return 45,000
29 Acc. Dep ( Plant) 12,000
30 Acc. Dep ( Furniture) 1,500
31 A/w for Bad debts 1,450
16,78,450 16,78,450

16. 16 | P a g e
Additional Information:
a) A utility bill for 5,000 rupees was receive but not paid.
b) Accrued interest on loan 1,000.
c) Outstanding salaries 3,000.
d) On 31/12/16, the book value of plant & Furniture is 100,000 & 56,000
respectively.
e) Income tax is payable 700.
f) Insurance of delivery vehicle was due 950.
g) Bad debt estimated 1% on account receivable.
h) Supplies on hand at the end of year 29,000.
i) Outstanding Misc. expense 150.
j) At the end of year the equipment cost was 22,000, remain was consumed.
k) At the end nine month rent was consumed from advance rent.

17. 17 | P a g e
Friends &Company ltd
Adjusting Journal Entries
For the year ended 2016
S.No Description P/R Dr Cr
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
k.
Utilities Expense
Utility Payable
( to adjust utilities expense )
5,000
1,000
3,000
50,500
700
950
495
1,000
150
950
13,500
5,000
1,000
3,000
38,000
12,500
700
950
495
1,000
150
950
13,500
Interest Expense
Interest Payable
( to adjust interest expense )
Salaries Expense
Salaries Payable
( to adjust Salaries expense )
Depreciation Expense
Acc.dep (Plant)
Acc.dep (Furniture)
( to adjust Depreciation expense )
Income tax Expense
Income tax Payable
( to adjust Income tax expense )
Insurance Expense
Insurance Payable
( to adjust Insurance expense )
Bad debt Expense
Allowance for bad debt
( to adjust Bad debt expense )
Supplies Expense
Supplies Payable
( to adjust Supplies expense )
Misc. Expense
Misc. Payable
( to adjust Misc. expense )
Equipment Expense
Equipment
( to adjust Equipment expense )
Rent Expense
Prepaid Rent
( to adjust rent expense )

18. 18 | P a g e
Friends &Company ltd
Adjusted Ledger Accounts
For the year ended 2016
a- Salary Expense
Balance 20,000
c. 3,000 C/F23,000
23,000
B/F23,000
23,000
b- Depreciation Expense
Balance 13,500
d. 50,500 C/F64,000
64,000
B/F64,000
64,000
c- Bad debt Expense
Balance 1,450
g. 495 C/F 1,945
1,945
B/F 1,945
1,945
d- Equipment Expense
Balance 1,050
j. 950 C/F2,000
2,000
B/F2,000
2,000
e- Utilities Expense
Balance 450
a. 5,000 C/F5,450
5,450
B/F5,450
5,450

19. 19 | P a g e
f- Interest Expense
b. 1,000
C/F1,000
1,000
B/F1,000
1,000
g- Income Tax Expense
e. 700
C/F700
700
B/F700
700
h- Insurance Expense
Balance 1,450
f. 950 C/F 2,400
2,400
B/F 2,400
2,400
i- Supplies Expense
h. 1,000
C/F1,000
1,000
B/F1,000
1,000
j- Supplies
Balance 30,000 h. 1,000
C/F29,000
30,000
B/F29,000
30,000

20. 20 | P a g e
k- Misc. Expense
Balance 1,700
i. 150 C/F1,850
1,850
B/F1,850
1,850
l- Equipment
Balance 22,950 j. 950
C/F22,000
22,950
B/F22,000
22,950
m- Rent Expense
Balance 4,500
k. 13,500 C/F18,000
18,000
B/F18,000
18,000
n- PrepaidRent
Balance 18,000 k. 13,500
C/F4,500
18,000
B/F4,500
18,000
o- Acc Dep ( Plant )
C/F50,000
Balance 12,000
d. 38,000
50,000 50,000
B/F50,000
p- Acc Dep ( Furniture )
C/F14,000
Balance 1,500
d. 12,500
14,000 14,000
B/F14,000

21. 21 | P a g e
q- Allowance for Bad debt
C/F1,945
Balance 1,450
g. 495
1,945 1,945
B/F1,945
r- Misc.Payable
C/F150
i. 150
150 150
B/F150
s- Income Tax Payable
C/F700
e. 700
700 700
B/F700
t- Insurance Payable
C/F950
f. 950
950 950
B/F950

22. 22 | P a g e
u- Salaries Payable
C/F3,000
c. 3,000
3,000 3,000
B/F3,000
v- Interest Payable
C/F1,000
b. 1,000
1,000 1,000
B/F1,000
w- Utility Payable
C/F5,000
a. 5,000
5,000 5,000
B/F5,000

23. 23 | P a g e
Friends &Company ltd
Adjusted Trial Balance
For the year ended 2016
S.No Title of Account Dr Cr
01 Cash 620,450
02 AccountReceivable 49,500
03 Plant 150,000
04 Furniture 70,000
05 Vehicle 300,000
06 Supplies 29,000
07 Office Equipment 22,000
08 Purchased 360,000
09 Prepaid Rent 4,500
10 Drawing 5,000
11 AdvertisementExpense 1,800
12 Transportation Expense 1,200
13 Salary Expense 23,000
14 Depreciation Expense 64,000
15 Bad debts Expense 1,945
16 EquipmentExpense 2,000
17 Utilities Expense 5,450
18 Misc. Expense 1,850
19 InsuranceExpense 2,400
20 PrintingExpense 2,100
21 Sales Return 2,000
22 Sales Discount 1,350
23 Interest Expense 1,000
24 IncomeTax Expense 700
25 SuppliesExpense 1,000
26 Rent Expense 18,000
27 Capital 400,000
28 Sales Revenue 493,500
29 Note Payable 500,000
30 AccountPayable 225,000
31 Purchase Return 45,000
32 Acc. Dep ( Plant) 50,000

24. 24 | P a g e
33 Acc. Dep ( Furniture) 14,000
34 A/w for Bad debts 1,945
35 Utility Payable 5,000
36 Interest Payable 1,000
37 Salaries Payable 3,000
38 Income Tax Payable 700
39 InsurancePayable 950
40 Misc. Payable 150
17,40,245 17,40,245

25. 25 | P a g e
Friends &Company ltd
Income Statement
For the year ended 2016
Revenue 493,500
Less: Sales return (2,000)
Less: Sales discount (1,350)
Sales return& Discount (3,350)
Net Revenue 490,150
Less:COGS:
Purchase 360,000
Add: TransportationInn 1,200
Less: Purchase return (45,000)(43,800)
Material available for supply 316,200
Less: Ending Materials (3975)
Total COGS(312,225)
Gross Profit 177,925
Less: Operating Expense
Advertisement Expense 1,800
Salary Expense 23,000
DepreciationExpense 64,000
Bad debts Expense 1,945
Equipment Expense 2,000
Utilities Expense 5,450
Misc. Expense 1,850
Insurance Expense 2,400
PrintingExpense 2,100
Supplies Expense 1,000
Rent Expense 18,000
Total Operating Expense (123,545)
EBIT 54,380
Less: Interest expense (1,000)
EBT 53,380
Less: Income Tax expense (700)
EAT/Net Profit 52,680

26. 26 | P a g e
Friends &Company ltd
Balance Sheet
As off Dec 31st
, 2016
Assets Liability + Owner’s Equity
Current Asset:
Cash 620,450
Account Receivable 49,500
Less: A/w for Bad debts(1,945)
Net Account Receivable 47,555
Supplies 29,000
Office Equipment 22,000
Prepaid Rent 4,500
Materials 3,975
Total Current Assets 7,27,480
Fixed Asset:
Plant150,000
Less: Acc. Dep (Plant)(50,000)
Book Value of Plant 100,000
Furniture 70,000
Less: Acc. Dep (Furniture)(14,000)
Book Value of Furniture 56,000
Vehicle 300,000
Total Fixed Assets
Current Liability:
Account Payable 225,000
Utility Payable 5,000
Interest Payable 1,000
Salaries Payable 3,000
Income Tax Payable 700
Insurance Payable 950
Misc. Payable 150
Total Current Liability 735,800
Long term Liability:
Note Payable500,000
Owner’s Equity:
Capital 400,000
Add: Net Profit 52,680
Less: Drawing (5,000)
Total Equity450,680
Total Assets11,83,480 Total Liability + 11,83,480
Owner’s Equity