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Prepare income statement and balance sheet

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Reference no: EM132717604

Question: Scenario: The business transactions during September, being organized are listed below.

ABC construction is a small business owned and managed by Mr. Ali. The company has 21 employees, few creditors, and no investor other than Mr. Ali. Thus like many small business, it has no obligation to issue financial statement to creditor or investors.

1. Mr. Ali started business with cash Rs20000.

2. The business paid Rs5000 for utility charges.

3. Paid Rs2000 for office rent.

4. Sale goods for Rs50000

5. Sale goods on credit to Amjid Rs20000

6. Purchase machine on credit Rs15000

7. Purchase land on Cash Rs30000

8. Paid Rs5000 for transection 6.

9. Collect Rs10000 form Mr Amjid.

10. Mr Ali Withdraw Rs5000 from his business

Required: 1) Under these circumstances, is there any reason for this company to maintain accounting records if they have no obligation to issue financial statements?

2) Pass Journal entries for the Mr. Ali business for the month of September.

3) Post the data from Journal to ledger.

4) Prepare a trail balance for Mr. Ali

5) Prepare Income statement, Owner equity statement and balance sheet

Reference no: EM132717604

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