Introduction
The Principle of Accounting is practiced all through the world . It is significant for us to remain updated with news and information about different kinds of calculations. The principles which are practiced are basically orthodox. The categories and format of the account helps us to make good points on several issues. It is more convenient for us to be more comprehensive, informative and moreover free to make deals on different calculations. So it is a significant source which enables us to identify and analyze the major ways of how to get a complete idea about accounting through theoretical and practical implementations.
Origin of the report
The report titled as, “Naznin Law Associates”, is to be submitted on 22nd December 2008 to the course instructor Mr.Arif Rana (Lecturer, School of Business) who authorized and assigned us to do this report.
Background of the report
The report titled as, “Naznin Law Associates”, is originated from the partial requirement of the course Principles of Accounting. It is actually a joint student – faculty learning experience, where the students learn the impact of how to get comprehensive idea about how accounting calculation works through the firm .
Objective of the report
This report seeks overall information about how the firm operates its cost and profit . By this report we tried to represent the actual way of how the wholeaccounting system works. Basically there are two objectives behind doing this report, and they are as follows:
- The first and the foremost objective of the report is to fulfill the partial requirement of the course Introduction to Accounting.
- The second objective of the report is to understand how the firm practices and operates the cash inflows outflows profits and loss with the equities which includes the firm’s one month journals, ledgers, Trial balance, Balance Sheet, Statement of Owner’s Equity .
Benefit of the report
The best part of this report is that the students get the opportunity to visualize the accounting calculations. It also helps the students to understand the concept of accounting application in the practical field. This will help the students to enhance their knowledge.
Limitations of the report
Although it was really an interesting experience to find out how the system works but we had to face our share of limitations while preparing the report and those limitations were:
- Time Constraints.
- Lack of proper comprehensiveness.
- The required information were quite scattered and hence to compile it was quite a difficult a task.
Source of Data
We have collected some primary data from “Naznin Rahman” and other advocates the data which are related to our problems we have also used some law books and sites of accounting firms.
We have collected most of the data from “Naznin Law Associates” and others. We have collected there theme of presentation, there present observations, there pattern and there related costing as a new firm which has got it’s name on 30th November 2008.
Data Used
In a short time it was not possible to analysis lot of data. We have also collected some data from the huge source of data. But we didn’t use all of the data which we have collected. So we have used some important and relevant data to complete our analysis. Mainly we have focused on the firm which we have analyzed on .
PART I
The Transaction of Naznin Law Associates
For the month of 31st December 2008
Mrs Naznin began a new law practice organization and she completed these following transactions.
2008
Dec 1 Invested Tk 25000 in cash and law books having a Tk 12000.
Dec 1 Rented the furnished office of a lawyer who was retiring due to illness and paid two months rent in advance Tk 10000.
Dec 1 Paid the premium on a liability insurance policy giving one years protection Tk 4200.
Dec 2 Purchased office sufflies on credit Tk 400.
Dec 8 Completed legal work for a client and immediately collected Tk 2500 cash for the work.
Dec 12 Paid for the office supplies purchased on Dec 2
Dec 15 Completed legal work for Evans Realty on credit Tk 8500.
Dec 22 Completed legal work for security bank on credit Tk 7500.
Dec 25 Received TK 8500 from Evans Realty for the work completed on Dec 15.
Dec 27 Advocate Naznin withdraw a Tk 150 cheque on the bank account at the legal practice to pay his home telephone bill.
Dec 29 Purchased additional office supplies on credit Tk 450.
Dec 31 Paid the December telephone bill of the office Tk 250.
Dec 31 Paid the salary of the office (secretary) Tk 9500.
Dec 31 Recognized that one months rent on the office had expired and had become an expense .
Dec 31 Recognized that one months insurance has expired and become an expense.
Dec 31 Took an inventory of unused office supplies and determined that supplies costing Tk 300 Had been used had become an expense.
PART II
Naznin Law Associate’s Journal entries
December 31st,2008
Dr Cr
| Date | Particulars | P.R | Debit | Credit |
| 2008 dec 1 | Cash Dr Law liabrary Dr Dr. kamals capital Cr | 25000 12000 |
37000 | |
| Dec 1
| Prepaid rent Dr Cash Cr | 10000 | 10000 | |
| Dec 1
| Prepaid insurance Dr Cash Cr | 4200
| 4200 | |
| Dec 2
| Office supplies Dr Accounts payable Cr | 400 | 400 | |
| Dec 8 | Cash Dr Legal fecs earned Cr | 2500 | 2500 | |
| Dec 12
| Accounts payable Dr Cash Cr | 400 | 400 | |
| Dec 15
| Accounts recivable Dr Legal fecs earned Cr | 8500 | 8500 | |
| Dec 22
| Accounts recivable Dr Legal fecs earned Cr | 7500 | 7500 | |
| Dec 25 | Cash Dr Accounts recivable Cr | 8500 | 8500 | |
| Dec 27
| Withdrawal Dr Cash Cr | 150 | 150 | |
| Dec 29 | Office supplies Dr Accounts payable Cr | 450 | 450 | |
| Dec 31 | Telephone expense Dr Cash Cr | 250 | 250 | |
| Dec 31 | Salaries expense Dr Cash Cr | 9500 | 9500 | |
| Dec 31 | Rent expense (10000/2 ) Dr Prepaid rent Cr | 5000 | 5000 | |
| Dec 31 | Insurance expense (4200/12) Dr Prepaid insurance Cr | 350 | 350 | |
| Dec 31 | Office supplies expense Dr Office supplies Cr | 300 | 300 |
PART III
Naznin Law Associate’s General ledger
December 31st,2008
Cash
Dr Cr
Date | Particulars | Tk | Date | Particulars | Tk |
2008 Dec 1 Dec 8 Dec 25 2009 Jan 1 | Owners capital Legal fee earned Accounts recivable Balance b\d | 25000 2500 8500 _________ 36000 __________ 11500 | 2008 Dec 1 Dec 1 Dec 12 Dec 27 Dec 31 Dec 31 Dec 31 | Prepaid rent Prepaid insurance Accounts payable Withdrawl Telephone exp Salaries exp Balance c\d | 10000 4200 40 150 250 9500 11500 ___________ 36000 ___________ |
Accounts Receivable
Dr Cr
Date | Particulars | Tk | Date | Particulars | Tk |
2008 Dec 15 Dec 22 2009 Jan 1 | Legal fee earned Legal fee earned
Balance b\d | 8500 7500 16000 7500 | 2008 Dec 25 Dec 31 | Cash Balance c\d | 8500 7500 16000 |
Salaries expense
Dr. Cr
Date | Particulars | Tk | Date | Particulars | Tk. |
2008 Dec 31 2009 Jan 1 | Cash Balance b\d | 9500 _________ 9500 | 2008 Dec 31 | Balance c\d | 9500 ————— |
Law library
Dr Cr
Date | Particulars | Tk | Date | Particulars | Tk |
2008 Dec 1 2009 Jan 1 | Capital Balance b\d | 12000 _________ 12000
| 2008 Dec 31 | Balance c\d | 12000 __________
|
Advocate Naznin’s capital
Dr Cr
Date | Particulars | Tk | Date | Particulars | Tk |
2008 Dec 1 Dec 1 2009 Jan 1 | Cash Law library Balance b\d | 25000 12000 37000 _________ 37000 | 2008 Dec 31 | Balance c\d | 37000
__________ |
Legal Fees Earned
Dr Cr
Date | Particulars | Tk | Date | Particulars | Tk |
2008 Dec 31 | Balance c\d | 18500
________
| 2008 Dec 8 Dec 15 Dec 15 2009 Jan 1 | Cash Accounts recivable Accounts recivable Balance b\d | 2500 8500 7500 18500 18500 |
Prepaid Insurance
Dr Cr
Date | Particulars | Tk | Date | Particulars | Tk |
2008 Dec 1 2009 Jan 1 | Cash Balance b\d | 4200 _________ _________ 3850 | 2008 Dec 31 Dec 31 | Insurance exp Balance c\d | 350 3850 4200 __________ |
Office Supplies
Dr Cr
Date | Particulars | Tk | Date | Particulars | Tk |
2008 Dec 2 Dec 29 2009 Jan 1 | A\C payable A\C payable Balance b\d | 400 450 ————- 850 ————- ————- 550 | 2008 Dec 31 Dec 31 | Office supplies Balance c\d | 300 550 ————— 850 ————— ————— |
Prepaid rent
Dr Cr
Date | Particulars | Tk | Date | Particulars | Tk |
2008 Dec 1 2009 Jan 1 | Cash Balance b\d | 10,000 ————- 10,000 ————————– 5,000 | 2008 Dec 31 Dec 31 | Rent expense Balance c\d | 5000 5000 —————10,000 ————— ————— |
Accounts payable
Dr Cr
Date | Particulars | Tk | Date | Particulars | Tk |
2008 Dec 12 Dec 31 | Cash Balance c\d | 400 450 850 ————————– | 2008 Dec 2 Dec 20 2009 Jan 1 | Office supplies Office supplies Balance b\d | 400 450 850 —————————— 450 |
Insurance expense
Dr Cr
Date | Particulars | Tk | Date | Particulars | Tk |
2008 Dec 31 2009 Jan 1 | Prepaid insurance Balance b\d | 350 _________
350 | 2008 Dec 31 | Balance c\d | 350 __________ |
Advocate Naznin’s Withdrawl
Dr Cr
Date | Particulars | Tk | Date | Particulars | Tk |
2008 Dec 27 2009 Jan 1 | Cash Balance b\d | 150 ————————– 150 | 2008 Dec 31 | Balance c\d | 150 —————————— |
Rent expense
Dr Cr
Date | Particulars | Tk | Date | Particulars | Tk |
2008 Dec 27 2009 Jan 1 | Prepaid expense Balance c\d | 5000 _________ 5000 | 2008 Dec 31 | Balance c\d | 5000 —————————— |
Office expense
Dr Cr
Date | Particulars | Tk | Date | Particulars | Tk |
2008 Dec 31 2009 Jan 1 | Office supplies Balance c\d | 300 ________ 300 | 2008 Dec 31 | Balance c\d | 300 __________ |
Telephone expense
Dr Cr
Date | Particulars | Tk | Date | Particulars | Tk |
2008 Dec 31 2009 Jan 1 | Cash Balance c\d | 250 250 | 2008 Dec 31 | Balance c\d | 250 |
PART IV
Advocate Naznin’s Law Associates
Trial Balance ,December 31st, 2008
Dr Cr
Particulars | Debit | Credit |
Cash A\c recivable Prepaid rent Prepaid insurance Office supplies Law library A\c payable Dr. kamal capital Dr. kamal withdrawl Legal fees earned Rent expense Salaries exp Telephone exp Insurance exp office exp | 11500 7500 5000 3850 550 12000 150 5000 9500 250 350 300 55950 | 450 37000 18500 55950 |
PART V
Naznin Law Associates
Income statement
For month ended 31st December, 2008
Revenue
Legal fees earned 18500
Operating expenses
Rent expenses 5000
Salaries exp 9500
Telephone exp 250
Insurance exp 350
Office supplies exp 300 15400
Net income 3100
PART VI
Statement of Owner’s Equity
Particulars | Tk |
Capital on Dec-1 37,000 (-) drawrings 150 36,850 (+) net income 3100 capital on December 31st 2008 | 39,950 ________ ________ |
PART VII
Naznin Law Associate’s
Balance sheet for the year ended 31st December 2008
_____________________________________________________________
Assets Liabilities
Cash 11500 A\C Payable 450
A\C Recivable 7500 Owners equity capital 39950
Prepaid Rent 5000 ______
Prepaid Insurance 3850 Total Liabilities 40400
Office supplies 550 _________
Law Library 12000 _________
Total Assets 40400
Conclusion
So Nazneen Law Associates tends to go for accounting terms which are simple and easily understandable. It transforms the accounting equation in a very vivid manner. The firm confronts of small transactions which are easily transparent and clarified in a very simplified manner. The basic infrastructure of the calculations followed are mostly very common. The whole format is a traditional one where all the inflows and outflows of cash transactions are done on the basis of what the firm consists.
