FINANCIAL REPORT OF PRIVATE FIRM IN NEPAL
WITH
REFERENCE TO
NATIONAL
TRADE CONCERN
A Report about the partial fulfillment of the requirements of the internal evaluation of Grade XI in
Principles of
Accounting-I
STUDENT DETAILS
Name:
Section:
ID card number:
Registration number:
College Logo
Kathmandu
Nepal
Declaration
I hereby declare
that the work presented in this project report has been done by myself under the
supervision of my mentor Teacher’s name, and has not been submitted elsewhere
for any examination.
All sources of
information have been specifically acknowledged by references to authors or
institutions.
Date: 19-08-2021
Student
name
Registration number:
Letter
of Approval
The project
work submitted to College name, By Student’s name, entitled “Financial Report of Private Firm in Nepal With
Reference To National Trade Concern” has been approved as the partial
fulfillment of the requirements of the internal evaluation.
Date: 19-08-2021
.........................................
Teacher’s name
Section - I
INTRODUCTION
Background of the study
Financial report of any organization
shows the operating result and financial position of any organization. It helps
to check the health of the business which helps to detect that the business is
running properly or not. It shows the position of profit or loss and condition
of assets and liabilities.
In Nepal the private firm established by
a single person can be registered under private firm registration Act, 2014.
National Trade Concern was established with
total capital of Rs. 4, 00,000. It was established by Mr. Praveen Bansal with
his own proprietorship.
Since it is registered by a single
person Mr. Bansal has sole authority to control over the business activities.
Objectives of the study:
The main objective of this report is to acquire
a sound understanding of an organization and know about preparation of
financial reports of National Trade Concern. Major objectives of this report
are mention below:
Ø To know operating result.
Ø To know the financial position at a
given period.
Limitation of the study
Since
the report is prepared on the basis of Journal, Ledger and Trial balance
provided by the organization based on the past year’s performance it shows the
operating result and financial position of last year only.
Methods and materials
The
researcher used primary methods of data collection for the purpose of preparing
this report. For the collection of financial and non -financial data researcher
has visited to National Trade Concern, Kathmandu, Nepal.
Section –II
Calculation/Computation
Journal Entries
Of
National
Trade Concern
|
Date |
Particular |
LF |
Debit (Rs) |
Credit (Rs) |
|
A |
Cash
A/C…………………………………………Dr Bank
A/C………………………………………..Dr To Capital A/C (Being business
started with cash and capital.) |
|
3,00,000 1,00,000 |
4,00,000 |
|
B |
Bank
A/C…………………………………………Dr To Cash A/C (Being cash
deposited in Bank.) |
|
1,50,000 |
1,50,000 |
|
C |
Machinery
A/C……………………………….Dr To Bank A/C (Being machinery
purchased and paid by Cheque.) |
|
80,000 |
80,000 |
|
D |
Purchase
A/C………………………………….Dr To creditor’s A/C (Being goods
purchased on credit.) |
|
50,000 |
50,000 |
|
E |
Debtors
A/C……………………………………Dr To sales A/C (Being goods sales
on credit.) |
|
1,70,000 |
1,70,000 |
|
F |
Creditor’s
A/C………………………………..Dr To Discount A/C To cash A/C (Being cash paid
to creditors.) |
|
50,000 |
5,000 45,000 |
|
G |
Cash
A/C…………………………………………Dr Discount
A/C…………………………………..Dr To Debtor’s A/C (Being cash
received from debtors after deducting discount.) |
|
1,42,500 7,500 |
1,50,000 |
|
H |
Insurance Premium
A/C…………………Dr To cash A/C (Being insurance
premium paid.) |
|
15,000 |
15,000 |
|
I |
Wages A/C………………………………………Dr
To Bank A/C (Being wages paid by cheque.) |
|
20,000 |
20,000 |
|
J |
Salary
A/C………………………………………Dr To Cash A/C (Being salary
paid.) |
|
25,000 |
25,000 |
|
K |
Cash A/C………………………………………...Dr To Advance commission A/C To commission A/C (Being commission
received.) |
|
20,000 |
5,000 15,000 |
Different Ledger Account
Cash A/C
Dr
Cr
|
Date |
Particulars |
LF |
Amount |
Date |
Particulars |
LF |
Amount |
|
|
To capital A/C To debtors A/C To advance
commission A/C To commission A/C |
|
3,00,000 1,42,500 5,000 15,000 |
|
By Bank A/C By creditors A/C By insurance
premium A/C By salary A/C By balance c/d |
|
1,50,000 45,000 15,000 25,000 2,27,500 |
|
|
Total |
|
4,62,500 |
|
Total |
|
4,62,500 |
Capital A/C
Dr
Cr
|
Date |
Particulars |
LF |
Amount |
Date |
Particulars |
LF |
Amount |
|
|
To Balance c/d |
|
4,00,000 |
|
By Cash A/C By Bank A/C |
|
3,00,000 1,00,000 |
|
|
Total |
|
4,00,000 |
|
Total |
|
4,00,000 |
Bank A/C
Dr
Cr
|
Date |
Particulars |
LF |
Amount |
Date |
Particulars |
LF |
Amount |
|
|
To Capital A/C To cash A/C |
|
1,00,000 1,50,000 |
|
By machinery A/C By wages A/C By balance c/d |
|
80,000 20,000 1,50,000 |
|
|
Total |
|
2,50,000 |
|
Total |
|
2,50,000 |
Machinery A/C
Dr
Cr
|
Date |
Particulars |
LF |
Amount |
Date |
Particulars |
LF |
Amount |
|
|
To Bank A/C |
|
80,000 |
|
By balance c/d |
|
80,000 |
|
|
Total |
|
80,000 |
|
Total |
|
80,000 |
Purchase A/C
Dr Cr
|
Date |
Particulars |
LF |
Amount |
Date |
Particulars |
LF |
Amount |
|
|
To creditors A/c |
|
50,000 |
|
By balance c/d |
|
50,000 |
|
|
Total |
|
50,000 |
|
Total |
|
50,000 |
Creditors A/C
Dr
Cr
|
Date |
Particulars |
LF |
Amount |
Date |
Particulars |
LF |
Amount |
|
|
To cash A/c To discount A/C |
|
45,000 5,000 |
|
By purchase A/C |
|
50,000 |
|
|
Total |
|
50,000 |
|
Total |
|
50,000 |
Sales A/C
Dr
Cr
|
Date |
Particulars |
LF |
Amount |
Date |
Particulars |
LF |
Amount |
|
|
To balance c/d |
|
1,70,000 |
|
By debtors A/C |
|
1,70,000 |
|
|
Total |
|
1,70,000 |
|
Total |
|
1,70,000 |
Debtors A/C
Dr
Cr
|
Date |
Particulars |
LF |
Amount |
Date |
Particulars |
LF |
Amount |
|
|
To sales A/C |
|
1,70,000 |
|
By Cash A/C By discount A/C By balance c/d |
|
1,42,500 7,500 20,000 |
|
|
Total |
|
1,70,000 |
|
Total |
|
1,70,000 |
Discount A/C
Dr
Cr
|
Date |
Particulars |
LF |
Amount |
Date |
Particulars |
LF |
Amount |
|
|
To debtor A/C |
|
7,500 |
|
By Creditors A/C By balance c/d |
|
5,000 2,500 |
|
|
Total |
|
7,500 |
|
Total |
|
7,500 |
Insurance Premium A/C
Dr
Cr
|
Date |
Particulars |
LF |
Amount |
Date |
Particulars |
LF |
Amount |
|
|
To cash A/C |
|
15,000 |
|
By balance c/d |
|
15,000 |
|
|
Total |
|
15,000 |
|
Total |
|
15,000 |
Wages A/C
Dr
Cr
|
Date |
Particulars |
LF |
Amount |
Date |
Particulars |
LF |
Amount |
|
|
To bank A/C |
|
20,000 |
|
By balance c/d |
|
20,000 |
|
|
Total |
|
20,000 |
|
Total |
|
20,000 |
Salary A/C
Dr
Cr
|
Date |
Particulars |
LF |
Amount |
Date |
Particulars |
LF |
Amount |
|
|
To cash A/C |
|
25,000 |
|
By balance c/d |
|
25,000 |
|
|
Total |
|
25,000 |
|
Total |
|
25,000 |
Advance commission
A/C
Dr
Cr
|
Date |
Particulars |
LF |
Amount |
Date |
Particulars |
LF |
Amount |
|
|
To balance c/d |
|
5,000 |
|
By cash A/C |
|
5,000 |
|
|
Total |
|
5,000 |
|
Total |
|
5,000 |
Commission A/C
Dr
Cr
|
Date |
Particulars |
LF |
Amount |
Date |
Particulars |
LF |
Amount |
|
|
To balance c/d |
|
15,000 |
|
By cash A/C |
|
15,000 |
|
|
Total |
|
15,000 |
|
Total |
|
15,000 |
Trial
balance
|
National Trade Concern |
|||||||
|
Trial Balance As on……………. |
|||||||
|
S.
N. |
Head
of Account |
L.F. |
Debit(Rs.) |
Credit
(Rs.) |
|||
|
1 |
Cash |
|
|
2,27,500 |
|
||
|
2 |
capital |
|
|
|
4,00,000 |
||
|
3 |
Bank |
|
|
1,50,000 |
|
||
|
4 |
Machinery |
|
|
80,000 |
|
||
|
5 |
Purchase |
|
50,000 |
|
|||
|
6 |
Creditors |
|
|
- |
- |
||
|
7 |
Sales |
|
|
|
1,70,000 |
||
|
8 |
Debtors |
|
|
20,000 |
|
||
|
9 |
Discount |
|
|
2,500 |
|
||
|
10 |
Insurance Premium |
|
|
15,000 |
|
||
|
11 |
wages |
|
|
20,000 |
|
||
|
12 |
Salary |
|
|
25,000 |
|
||
|
13 |
Advance commission |
|
|
|
5,000 |
||
|
14 |
commission |
|
|
|
15,000 |
||
|
|
Total |
|
|
|
5,90,000 |
5,90,000 |
|
Income statement
|
National Trade Concern |
||
|
Income Statement |
||
|
For the year ended …………… |
||
|
Particulars |
Details
(Rs ) |
Amount
(Rs.) |
|
Revenue from operation |
|
1,70,000 |
|
Less:
Cost of goods sold |
|
|
|
purchase |
50,000 |
|
|
Wages |
20,000 |
|
|
Closing stock |
(20,000) |
(50,000) |
|
Gross profit |
|
1,20,000 |
|
Other income |
|
20,000 |
|
General and administrative expenses: |
|
|
|
Salary |
35,000 |
|
|
Depreciation on Machinery |
8,000 |
|
|
Insurance |
10,000 |
|
|
Total
General and administrative Expenses
|
(53,000 ) |
|
|
Selling and distribution Expenses: |
|
|
|
Discount
allowed |
7,500 |
|
|
Total Selling and distribution
Expenses |
(7,500) |
|
|
Total
operating Expenses |
|
(60,500) |
|
Income from
operation
|
|
79,500 |
|
Finance Cost |
|
0 |
|
Income before tax |
|
79,500 |
|
Income tax paid |
|
0 |
|
Net
Income after tax |
|
79,500 |
Balance sheet
|
National Trade Concern |
||
|
Balance sheet |
||
|
As on ……… |
||
|
Assets |
Notes |
Amount (Rs.) |
|
Non-current
Assets |
|
|
|
Property, Plant
and equipment |
|
72,000 |
|
Total
Non-current Assets |
|
72,000 |
|
|
|
|
|
Current Assets |
|
|
|
Bank
|
|
1,50,000 |
|
Cash |
|
2,27,500 |
|
Debtors |
|
20,000 |
|
Closing stock |
|
20,000 |
|
Prepaid
insurance |
|
5,000 |
|
Total Current
Assets
|
4,22,500 |
|
|
Total Assets
|
|
4,94,500 |
|
Liabilities and
Equity: |
|
|
|
Non-current
liabilities |
|
Nil |
|
Current
Liabilities : |
||
|
o/s salary |
1,000 |
|
|
Advance commission |
|
5,000 |
|
Total current liabilities |
15,000 |
|
|
Equity |
|
|
|
Capital
|
4,00,000 |
|
|
Retained Earning |
79,500 |
|
|
Total
Equity
|
4,79,500 |
|
|
Total liabilities
and Equity
|
|
4,94,500 |
Result and findings
Researcher finds the following result from the
study of organization’s financial statement.
Ø The income statement shows the positive result
of business operation.
Ø The balance sheet shows ‘zero ‘balance in
current liabilities and no other fixed assets other than furniture.
Conclusion
The firm has sound financial position. Since, it
has positive operating result in very short period of its establishment. The
firm can increase its capital to enlarge the size and operation area of the
business to get more profit and better financial freedom.
Bibliography
·
Koirala ,Madhab Raj.et al.“Principles
of Accpunting-I” 2020
·
https://en.wikipedia.org/