Question

Think up a company you would like to start.   Then, choose an organizational type.   Assume the company will start on January 1st, 2020.   Create 10 transactions for the year 2020.   Please make sure you use entries which affect equity, revenue, expenses, assets and liabilities.   You can draw the "T" accounts or you can describe the affect of the transactions on the financial statement. Then, show the income statement, the balance sheet and the statement of equity for the year ending 12/31/2020.  

Any company or organization is fine!

Answer 1

	Date	Particulars	Dr.	Cr.
1	01 January 2020	Cash A/C	1,00,000
		Share Capital A/C		1,00,000
2	10 February 2020	Purchases A/C	50000
		Cash A/C		50000
3	10 February 2020	Salary A/C	10000
		Cash A/C		10000
4	10 March 2020	Cash A/C	90,000.00
		Sales A/C		90,000.00
5	15 March 2020	Rent A/C	5000
		Cash A/C	.	5000
6	01 January 2020	Machinary A/C	60000
		Cash A/C		60000
7	05 June 2020	Accounting Services A/C	10000
		XYZ CO A/C		10000
8	31 December 2020	Depreciation A/C	20000		Asset usefull life is 3 years
		Machinary A/C		20000
9	31 December 2020	XYZ CO A/C	5000
		Cash A/C		5000
10	31 December 2020	ABC A/C	1000
		other Income		1000

	Income Statement FY 2020
			Amount
Revenue	Sales A/C		1,20,000.00
	Other revenue		1,000.00
	Total Revenue		1,21,000.00
Expenses
	Purchases A/C		50,000.00
	Salary A/C		10,000.00
	Rent A/C		5,000.00
	Accounting Services A/C		10,000.00
	Depreciation A/C		20,000.00
	Total Expenses		95,000.00
Income	Total Income(Revenue-Expenses)		26,000.00

Balance Sheet
Particulars	Details	Amount
Assets
Machinary A/C	60,000.00
Less Depreciation	-20,000.00	40,000.00
ABC A/C		1,000.00
Cash A/C		1,40,000
Total Assets		181,000
Liabilities
XYZ CO A/C		5,000
Share Capital A/C	1,50,000
Add: Retained Earnings(Net Income)	26,000	1,76,000
Total Liabilities		181,000

1. Investment of $150,000 as share capital and cash also increased with that.

2.Purchases of inventory on cash. Cash got decreases by means asset decreased and expenditure increased.

3.Salary paid of 10k. Expenses increased by that income got declined at the same tine cash got decreased.

4. Products sold. Cash increased and same will impact our income.

5. Rent paid by cash, by means again cash decreased  and expenditure incurred. Expenses will be impact on our income.

6. Purchase of machinary by cash. This increases our asset and correspondingly cash got decreased.

7. Accounting services taken and 10k payable to XYZ co.

8. Depreciation charged on machine. Asset value got decreased and depreciation decreased our income.

9. Part of the cash paid to XYZ co. and remaining is payable.

10. Other income of 1k and increased our income.