This is the last session in the training course and we will have a look at the solution to the complaints of exercise. I gave you a trial balance as at the 30th of November 2009. The financial year started on the first of January 2009 and ended on the first of December 2008. So, we had to account for the transactions for December 2009. So, I gave you a draw balance and this trial balance will form the opening balances of all the accounts in the general ledger. gave you an asset register up until the November and yet to calculate the depreciation for December 2009.

I gave you a bank reconciliation, the closing balance on the city as of November from the opening balance in the December bank reconciliation and they was to add the items that's 10 check an outstanding deposit and I gave you it data's balance. It was the two dataset here had a total of 12765 right and gave you create this balance 78 967. I gave you all the transactions for December. It was sales purchases, cash, book receipt, cash payments, petty cash and Additional information. And I gave you a bank statement for December 2009. And then we requested account for all the transactions in substitute journals and Ledger's and prepare an income statement and a balance sheet for December 2008.

The first thing that you had to do was to copy all of these balances to the general ledger. So on the first of December, that'll brought forward 1367589 created. So you copy the credit, cost of sales, next one, debit 918976 cost of sales that will route forward 918976. And you would have copied all the income statement items to the general ledger and all the balance sheet items. to the gym or Legion, I gave you the status opening balances that was super and that was it David very important, you know we need to debit and the credit it is our debit and credit there was a credit. So in the data's ledger happening balance first of December balance brought forward 40.9896 and four yamo on the first of the seven December balance brought forward is 1762 and the creditors balance in the creditors ledger opening balance bt x first of December 2008 balance brought forward 78967 and I gave you all the transactions here's all the sales so we add a sale on the fifth invoice to one five value 17 100 The third FUPA in was 215, the total invoice was 17,100.

We actually take VAT into account, so times 100 divided by 1144 15,000. That's our money. So we will account for the sales and 17 100 times 14 divided by 114 to 100. That was the government's money and we will account for that under the VAT column. So we accounted for all those transactions. We total the sales journal, and we prepared a general journal.

So we add sales, sales, income, income demo, plus, income becomes more we created we created 1317 15.8 VAT VAT is a liability, the liabilities became more plus the liability becomes more we've created one eight, double four 5.12 and it is it is an asset the assets became more plus an asset becomes more v. David, David 150 196 add up the debits and the credits and the general journal balances and this general journal will be copied to the general ledger and then we add purchases on the first of the 12 2008 invoice 786 to the value of 74,104 stock from bt x on the first vt x invoice number 37 for 100 Seven for 100 times 100 divided by 114 64,008. That's what we fight for the stock. We also paid VAT but we can trim it back from the government seven for 100 times 14 divided by 1149 100 vi T. And there was written on the second crit that 92 the value of 9120.

For stock from bt x, we return stock to the supplier on the second bt x 19 days, the return now remember we put the return in minus, we've sent some stock back, we calculate the VAT and we will have to pay back the VAT to the receiver. So when we return All the amounts will be in a negative and we accounted for the purchases we totaled and we did the general general stock stock as an asset as it became more and if an asset becomes movie David 57,000 rent cleaning an expense benefit a more plus an expense expense becomes more we need to debit 1000 rent and VAT. So liability for in this instance we will claim the money back from the receiver so that will reduce the liability liability we will become less liability becomes less we need to debit and we will debit type 120 and in credit as a liability we bought from creditors so we owe them the money liabilities increased plus if a liability becomes More we need to create it 66 120 and we have we added up all the debits and they are equal to the credits, then the cash book.

Now the first thing that you need to do before you write up the cash book, you need to go back to the bank reconciliation and you will see this abstaining check check 1259 1860 and these outstanding deposit 978 60 and you needed to be they appear on the bank statement for December. And for December on the December bank statement, the 97863 appear on the bank statement. So that outstanding standing item is no longer an outstanding item. So, you can move Crew so that one went through the bank. And then we can write up the cash receipts. So we had a receipt 132 to the value of 2176 from wooper.

So on the first wooper, that's a data to 176. And then have a look at this entry on the 31st receipt 135 to the value of 148 units from Chora for the vehicle that was sold, so we sold the vehicle 31st Gara 135148 200. Remember to account for the vat. So 148 200 times 100 divided by 1,430,000 Rand in the sundry column, and 148 200 times 14 divided by 114. And that is 18 to one For VAT, that is no VAT on the datas. We already accounted for the VAT when we accounted for the sale in the sales journal.

So this is any payment that we received from the data and recent event on it. And then we reconciled to 1762176. That one went through the bank, the city went through the bank 184 hundred, some outstanding our item outstanding, we don't see a deposit on the bank statement, the one for a 223 the bank and in the was deposit interest received 50 Adrian now we don't have a receipt for that. That is a transaction that was generated by the bank. So we need to account for it on the 31st interest received 58 grand interest received 58 train So, that one went through the banks and that is accounted for as well. So, we have one abstain item 184 hundred, add up all the columns and remember to cross costs.

So, you will add up all of these columns and make sure that it equals the title and immediately general general data's control. So, it is an asset we received money from the data. So, it is for the asset to reduce minus if an asset becomes less we created 51072 interest or C income income became more plus income becomes more we created 50 Adrian's then profit with the sale of an asset. When we receive the money, we will tie the money that we receive to the profit and loss of sight loss. Assets 130,000 created VAT that's the money that we received when we sold the vehicle at 200. So we have to pay it over to receive it that is a liability liability became worthless.

Liability becomes all we need to create it on h 200. And the total receipts 199330 and that was bank bank is an asset the asset became more we received the money and we deposited the money in the bank so the bank became Oh plus, an asset becomes more wavy, David 199360. debits equal the credits. Emmys account for the five minutes in the cash payment journal. In the cash payment journal on the first of the 12 Check 1262 BTC the value of seven 698 fee that will include this kind of 2.5%. So on the first vt x one to six, the check amount is 769 to 83, but it includes a discount of 2.5%. So 7699 2.83 divided by 0.975 equals 78967.

That is the amount that will be debited on our creditors account. So 789 and six and the discount that we have received is the difference between 78967 and 769 283. And that was 197 4.12 and that is an a negative and we will account for all of these payments. Now, I can see we need reconsolidated bands 7699 to 769211401140 is 159. That was for bank charges 570-470-1267 512-675-2000 2000. And there was a 45.

That is not on the bank statement. So there's a 45 medicine outstanding items asked in item and there was 800. That does not appear on the bank statement and that is also an outstanding item. And then there was the 159 Bank charge. And we haven't made a check for the bank charges. That is a an emetic transaction that was initiated by the bank and there was a 60,000 payment on the is on the line and that was a debit order that we signed at the bank.

So that is also a transaction that was generated by the bank. But we have to account for it in our cash book, bank charges 159 remember the VAT and they was epsa bank 60,000 installment and these know that on the installment, we cleanse event when we bought the item, we will title the columns to the cross cost make sure that that is the title and we will generate the general journal critters critters liability we bite the liability so the liability reduced if a liability becomes this we debit 126260 This can receive this can receive this and income. Income became all plus income becomes more we need to create it. Three one to write or to send it created stationaries expense expense became more plus expense becomes more we need to debit that was for salaries, and it was also an expense station. And then it was vi t by the i t by t vet over to the receiver.

So vi t that's a liability, we fight the liability. So the liability reduce if a liability becomes less we need to debit debit 12675 that was in the sundry account. And we paid the bank Mike is a liability liability became less and if a liability becomes an issue, we need to debit 60,000. So we've accounted now for all the items in the salary column And all the payments in the bank the bank is an asset when we made the payments, the bank became less minus the bank comes least we created. So we created with 199337 of all the debits and credits and we will copy that to the general ledger. Then the petty cash we received a check from the bank 2000 2000 Rand and we generate a general journal petty cash became more so petty cash is an asset as it became more plus an asset becomes more we need to debit we will debit that.

And remember if we if there's transactions between the petty cash in the bank, we will debit the petty cash and we will credit the bank petty cash controls so that is the credit in the bank. They was the bank petty cash control account, we credited the bank and we will debit that account it is pretty important that you remember that transactions between cash books and the cash, the bank becomes more we take the other leg to the petty cash bank control account. Then we add the petty cash payments, we might as defilements and we generate the journal. And then they was additional information provide interest at 24%. Beyond the line provided details and against the provision for future expenses. So in the trial balance, there is a line for 100,000 Rand and we already provided for interest of 22,000.

So let's do the calculation 100,000 rate times 24% because 24,000 grants Please 22 that was already provided for 2018. So for December, we still need to provide 2000 You can also calculate 100,000 times 24% times one over 12,000. So, that was interest interest in expense expense became more plus an expense becomes more we need to debit and we accounted for the interest against the provision for expenses again, provision for expenses a liability liability became more we still have to fight plus liability because we need to create it 2010 the stationery that was bought out of petty cash was for telephone expense. So, we actually buy the telephone again but we accounted for it as station service station. is an expense we allocated that payment against the lease and expense needs to become less minus expense becomes less we need to create it telephone is expense plus experience becomes more we need to debit.

So we will debit telephone. So if you go back to the petty cash, you can see they was a payment to NCI is 50 rent station. So we made a mistake that was not for station that was for telephone. But we allocated that to the Taylor stationary accounts in the general ledger and we need to correct them. So we will take it out of station and we will allocate it to telephone and the gross profit on stock that was sold was 25%. The sales in the sales journal 1317 5088 so 131 750 point 88 the gross profit was 25%.

So times 100 divided by 125 equals 105 400. That was the cost of the items that we sold, and we need to take that out of the stock account and transfer it to the cost of sales again. So, cost of sales and expense needs to become more plus if an expense becomes more we need to debit one and 570 stop stock as an asset. We sold the stock, the stock reduced minus an asset becomes less we need to create a one a five 400 and make provision for salaries of 1500 provision for future expenses. So we need to make a provision for the salary so we haven't paid the salary yet. So we still need to buy it.

So salaries and expense plus an expense becomes more we need to debit 1500 provision for expenses liability account, liabilities became more we still need to do the payment plus if a liability becomes more we need to create one 500. And then they was on these journals. First one, Yama has been liquidated and the balance needs to be written off and expanded. So let's have a look at the status ledger. In the datas ledger, there was an account for young remember it was the opening balance type one 716. Yahweh has been liquidated and we will not getting money from your mom.

We will not receive it. So we need to write it off. So in the data's general Yama Yama is an asset to data as it became less. And as the money anymore if data becomes less, we need to create it, Id 176 to the event we can train back from the receiving end. So VAT is a liability liability will become less liability becomes least we need to debit. So that was 817 16 times 14 divided by 114.

That is the veteran thingies 04 0.95 that we can send back and we will write the amount of as pending 71 7105. That's the difference between what they owed us and what we will claim back from the receiver so our loss is 7170 To 1.0105 and received once we do was a deposit from Boston, a new client. So if we go to the cash book receipt is received 132 it said yeah 132 was from Buddha, but that was incorrect. It was from a new client. Lastly. So indeed datas ledger, we allocated that amount to the accounts of Rupa, but that's incorrect.

We need to take it out of group as account and we need to allocate it to university. So we bought we bought an asset, the asset needs to become more plus and if an asset becomes more we debit to 176 invest money as an asset and we received the money from us, although they don't earn money. Service money is an asset the asset produced so traduced. We need to To create a 2176 and then we did the asset register, we need to calculate depreciation for the same. So 250,000 rent that is the cost price such vehicles depreciate in your personal cost times 20% times 12 over 12 months for a whole year that will be 50,000. So, we already accounted for depreciation to the end of November for 4.8 double 3.33 and it needs to be 50,000.

So, accumulated depreciation for one double 6.67 office equipment depreciation tips introduced balance the cost price was 24,000 Rand The depreciation at the beginning of the year was to 500. So, costly accumulated depreciation will leave us with book value of 20 to 500 times 10% that is 250 to 250 we already accounted for 260 50. So, we will account for another 375 and the same for the other asset we will account for against the depreciation and depreciation is an expense in game or plus between 60 control the accumulated depreciation So, Canton produces the value of the asset asset minus if an asset becomes lease we need to create it so we will create it and we sold the vehicle in the cash book receipt journal. We received money 100 200 for the vehicle that was sold. So, the cost price list 250 needs to come out the accumulated depreciation is 100,000.

So we need to take it out. First of all cost asset, we sold the asset the asset produced, asset becomes less we need to create it to 50. So we take it out of the lease to 50 cumulated depreciation and 1000 rent that's a credit. So we need to debit it if we want to take it out of the accounting reports debit and we will type the debit and the credit to the profit and loss account income statement account. And then we need to do the bank reconciliation. So the opening balance the cash book opening balance is the closing balance for November 18789 cash procedural cash payment journal does totals as a receipt we will plus and as the payment we will subtract and we will get a new cash book balance 18781 and then there was the outstanding items.

The first one was from the November bank reconciliation. So, there was a bank reconciliation year and remember that deposit appear on the bank statement for the same and that was an outstanding item. So, if we go to the bank recon for December 1 one plus x then Jake 918 60 that was from November. Remember if we subtract the we need to add every year and if we plus day we need to minus every year and in the was two Other outstanding checks. The first one was the item to train, and then they was the 45. So, we add back the 800.

And we add back the 45. And it was an outstanding deposit. I think 400 we will subtract it. So 87 at 157 plus, that's the ending checks plus abstaining deposits, total 144941. And that is the balance on the bank statement. So our bank reconciles with the cash book.

And indeed, it is journal. We need to account for all the database transactions in the different journals in the data's ledger. First of all, we AdSense for sale coupon, so rubber Resulting in was 215 17 one remember that was the money including VAT 17 100. So, we pass an asset the asset became more plus if an asset becomes more we need to debit invoice 21517 100. We had to account for the receipts from our datas in the cash procedure No. So we received from wooper 1322176.

I will pop cash book receipt, remember, produce the asset maybe created 2176 and it was the data's journals. First of all we need to write of Yama Yama add a balance of 817 16 and we have to write it all. So, Yama 81762. And that was c d was not for Rupa we are candidate for it in we pass a can we manage this receipt incorrectly and we need to allocate it to Vaseline. we account for the debit day in general and we will create it for us. And then we need to balance our status at the debits and the credits and the security choose 1471 and six and that will be transferred to the debit side.

So that is what is yahveh debit credit zero zap by boat necktie debit. Balance zero. Vasily. We received money from us. So there's a credit of 21769 David so we put in a debit transfer that to the credit side that was the balance. So we actually add velocity summon 147 Minus 217 will give us a total of 145020 create this ledger, we need to account for all the purchases in the purchase journal.

So we bought from bt x in for 100. So, invoice seven for 180 excess liability liability became more when we bought the stock for liability becomes more we need to create it and then it was some payments in the cash payment journal. So, if we buy the creator liability becomes less liabilities less we need to debit. So there was a payment 7699 to remember that was the check amount and we received this can we need to take the amount in the creditors column 78967 when we balance the creditors, the credits 143067 we need to put in a debit day debit rule form the opening balance as the first of January 2009. That will also be the closing balance on the 31st of December 2008. And we do the same with our file, we don't earn any money so 18226 plus 01882 6.15.

And then we copy all the general journals that we generated in the different journals. So first of all, it will be sales, sales 131 750 so on the 31st of December from the sales journal once we once in 50. I will copy them the VAT and we will copy the debtors control and we will do the same for the purchase journal the cash book journals the very questions the general general anti data's journal We will be a trial balance. So, bank 18781 so we just copy all of those against everything 18781 David data's control debit 145020145020 so I'm going to create this one, I do 615 credit creditors 180 6.15 and we need to make sure that the bank reconciles with bank reconciliations if we go to the bank reconciliation, cash book closing balance, that is the balance remember that's the cash book balance that will not agree with the bank statement balance because they are some outstanding items.

So that is the title a if we get to the data ledger 14500 do the trial balance 141020 and the creditors control will balance with the creditors ledger to get to the creditors ledger on it 6.15 we will add up all the credits will add up all the debits and they said David short and is the net profit 16 four one T and that balances that will be carried over to the profit for the year. That is net profit 60 412. Remember if we put in a debit we need to put in a credit so you can leave it out and that will not be the either and that is all the balance sheet items. So we accounted for the income statement items and we accounted for the balance sheet items. And we need to copy this to the income statement and the balance sheet. Income Statement, this income statement, sales, one, four, double nine, double three, nine.

There it is cost of sales. There it is brilliant. That's it, David. So that was a credit that's a debit. It will leave us with a credit other income to these other income interest created, created. That was that is a created, that's a new credit.

And we can pull the expenses that debits add up all the expenses and we have a debit of 41573 6.72 created plus a credit will give a new credit list the debits will give us a net profit net profit is a credit. Remember this net profit must be carried over to the balance sheet and we need to prepare a balance sheet on 31st of December. 2008 we will account for all the assets and we will account for the equity and liabilities in the second section. First of all fixed assets, fixed assets, motor vehicles, office equipment and plant machinery. Now many vehicles office equipment 50,000 in costs plus nine 500 accumulated depreciation they created debit 500,000 rent costs for plant machinery credit accumulated depreciation the net debit of 4488 double 3.3 for the current assets bank but again Stop this stop bank data's and petty cash title the current assets David 1933197. title for assets a debit of 64215 2.1 Do equity share capital 1000 1000 created retained income net retained income years 498 to 6.1 plus the profit that we made for the year that will be 564 3.48.

That's created total equity 56143849 created long term liabilities, the line from the bank 40,000 rent today and in the current liabilities for the creditors fat provision for future expense, total IE current liabilities 40 713 credit, we add up the equity, the long term liability in the current liabilities the title, equity liabilities, six, four to one five to 21. And that is a created The credits equally David's, and it's all due to the double entry system and in this enact that for the fixed assets so nuts to the financial statements on the 31st of December 2009 fixed assets, the carrying value on the first of January 2008 that was the first day of the financial year we had crossed 254 motor vehicles t 50 accumulated depreciation 50. We had office equipment costs 2525 50 so 50 and depreciation 5000. So the book value 45 and nothing for plant and machinery.

So, we add up the cost 300,000 at the accumulated depreciation 55,000 in net book value to 45,000 and we add movements for the additions that was bought and that was bought in February. That's why we only calculated depreciation for 11 months. So additional costs on the machinery 500,008 disposals, the motor vehicle was sold. So 250 costs lays 100 accumulated depreciation leaves us with a book value of and written 50. disposals and book value and 50 motor vehicles and the was depreciation not a vehicle vehicles depreciation 50,000 less 54 500 for office equipment for 500 and the new machine nine one triple 6.67 and we need to add up cost 250 but we sold it we don't have it anymore. Cost zero cumulated depreciation zero motor vehicles to value zero we don't have the motor vehicle in office equipment 59 movement 50 costs they may have accumulated depreciation beginning of the year 5000 depreciation for 500 total depreciation accumulated depreciation at the end of December non 500 and the book value for 500 plant machinery no cost no accumulated depreciation for for 500,000 cost 500,000 calculated depreciation nine one triple six accumulated depreciation nine one triple six book value 408 triple three and up that line and that will give us a net book value 448 double three and effect that line total cost 550 at a deadline accumulated depreciation one on one.

And if we offset the accumulated depreciation from the cost, then we will get to net book value, four, four double 333. And that is the amount in the balance sheet. This was the last session in the training program. I helped you with all the basic principles, and you can go and apply it to your studies or in the workplace. Thank you for supporting me and good luck with your accounting