Question

Hi, I have an assignment where I have to create a small manufacturing company and run it for two months. I want to make a company that manufactures chocolate chip cookies(just that 1 product).

I have no clue how to get this assignment started so if anyone could help me get the ball rolling I would really appreciate it.

Requirements:

1.) A general journal containing all the journal entries and also include any necessary adjusting entries for both months (minimum of 40 business transactions)

2.)Include a few of each of the following transactions:

Stock Purchases or loans

Purchase of equipment(like machines that make cookies, mix the ingredients, etc.)

Purchase of facility(just one facility) that we would turn into the factory that produces the cookies

Purchases of all raw materials for cookies(butter, chocolate chips, eggs, etc). Make each ingredient its own purchase. NOT just one single group purchase

Any other purchases you feel a cookie manufacturing company would make.

That is all. Any help would be appreciated greatly. Just dont know how to get it started so I can move on and do the rest of the assignment.

Answer 1

Credit (Amt) Date Particulars posting ref Debit (Amt) 1. For starting any business, you need to introduce capital in business. The capital can be introduced either by way of cash or taking loan. If you are introducing cash, the journal entry would be- Cash A/c_ _Dr To Capital A/C (Being Capital introduced by way of cash) XXXX XXXX XXXX 2. You need to open a bank account & deposit cash in bank account Bank A/c Dr To Cash A/C (Being cash deposited in bank A/c) XXXX 3. Raw materials purchased for business (Assumed Input tax credit on purchase of raw material is eligible to claim as setoff as per local tax laws) Materials A/c Dr XXXX Input tax credit on materals purchased__Dr XX To Vendor A/C (Being materials purchased on credit and Input tax credit claimed) XXXX

4. Payment made to Vendor (Assumed-You are liable to deduct TDS(Tax deducted at source) as information regarding local tax laws is missing in question) you can ignore tax component if you are not liable to deduct tax before payment as per local tax laws where company is formed Vendor A/c__Dr XXXX To Bank A/C To TDS payable to government (Being payment made to vendor and tax deducted at source) ХХХХ XX 5. Month on month you need to pay salaries/Wages to employees (Assumed- You are liable to deduct TDS(Tax deducted at source) as information regarding local tax laws is missing in question) Salaries/Wages A/c Dr XXXX To Bank A/C XXXX To TDS payable to government XX (Being Salaries/ Wages paid to employees/ workers after deducting TDS) XXXX 6. If the company is taking loan for business Bank A/C Dr To Loan Payable A/C (Being loan amount deposited in Bank ac) XXXX

XX 7. For monthly repayment of loan Loan Payable A/c Dr To Bank a/c (Being monthly installment on loan paid through bank) XXX 8. Purchase of equipment for the production of cookies Machineries A/c Dr To Bank A/C (Being machineries purchased) XXX XXX 9. Purchase of other Furnitures in office Furniture A/c Dr To Bank A/C (being Furniture purchased for office) XXX XXX 10. You need to provide the depreciation on monthly basis (Amt you need to calculate as per local laws) Depreciation A/c Dr To Machineries A/C To Furniture A/C (Being depreciation provided on assets) XX XX