| Date | Business Activity | | Income Statement | | | Balance Sheet | | | | | | CASH | | Cash Flow Statement |
| 1-Jan-20 | Rs.2,00,000 capital introduced in business by the owners | | For the calender year 2020. | | | Liability | 31-Dec-20 | | Assets | 31-Dec-20 | | | | For the calender year 2020. |
| 1-Jan-20 | Took a loan of Rs.20,000 from bank for |
| | working capital, Interest rate is 10% per annum. |
| | Principal needs to be repaid after 2 years. |
| | Interest for year 2020 was paid in cash at end of year 2020. |
| 2-Jan-20 | Purchased office equipment for Rs. 10,000. |
| 2-Jan-20 | Paid to landlord Rs. 3,000 as security deposit and |
| | Rs. 6,000 as rent for full year of 2020 |
| 5-Jan-20 | Purchased and received 1000 books at a cost |
| | of Rs.50 per book for a total of Rs.50,000. |
| | Paid 50% amount in cash and the remaining |
| | 50% amount is payable by 5 Jan 2021 |
| 18-Apr-20 | Spent Rs.2,500 in TV advertisement | | Profit |
| 20-Apr-20 | Sold for cash 400 books at Rs.300 each book. | | | | | | | | Check |
| 24-Jun-20 | Spend Rs. 8000 on general and administrative activities |
| 27-Sep-20 | Hire a part time clerk to whom company will pay | | Prepare the financial statements for the calender year 2020. |
| | Rs.100/hr. Clerk works for 125 hrs before 30th Dec 2020. |
| | 50% amount was paid in cash in 2020 and | | Management estimates and assumptions |
| | the remaining 50% would be paid in 2021 | | Office equipments have an estimated life of 2 yrs and salvage value of 0. |
| | | | Depreciation method to be used is SLM. |