Mr. Gulzar started a trading organization with the name and style of Gulzar Trading Enterprise. The transactions during May 2020 were conducted as under: - 01. Mr. Gulzar brought cash of Rs. 1,000,000 in business and furniture valuing Rs. 100,000. 02.

To assist you in recording the transactions performed by Gulzar Trading Enterprise in May 2020, I will guide you through the journal entries, the posting to the ledger accounts, and the preparation of financial statements. For simplicity, I'll break down the steps into four parts: Journal Entries, Ledger Accounts, Financial Statement Preparation, and Cash Flow Statement.

### 1) Journal Entries

#### General Journal

| Date       | Account Title                                   | Debit (Rs.)    | Credit (Rs.)   |
|------------|-------------------------------------------------|----------------|-----------------|
| 01-May-20  | Cash                                            | 1,000,000      |                 |
|            | Furniture                                       | 100,000        |                 |
|            | Capital (Mr. Gulzar)                           |                | 1,100,000       |
| 02-May-20  | Repair & Maintenance Expense                    | 12,000         |                 |
|            | Cash                                            |                | 12,000          |
| 03-May-20  | Rent Expense                                    | 50,000         |                 |
|            | Cash                                            |                | 50,000          |
| 05-May-20  | Purchases (Goods)                              | 650,000        |                 |
|            | Cash                                            |                | 500,000         |
|            | Accounts Payable (Ahsan Company)               |                | 150,000         |
| 08-May-20  | Cash                                            | 300,000        |                 |
|            | Sales Revenue                                   |                | 250,000         |
| 10-May-20  | Accounts Receivable (Mr. Afzal)                | 90,000         |                 |
|            | Sales Revenue                                   |                | 70,000          |
| 12-May-20  | Entertainment Expense                           | 800            |                 |
|            | Cash                                            |                | 800             |
| 14-May-20  | Purchases (Goods)                              | 250,000        |                 |
|            | Cash                                            |                | 250,000         |
| 16-May-20  | Accounts Payable (Ahsan Company)               | 100,000        |                 |
|            | Cash                                            |                | 100,000         |
| 18-May-20  | Cash                                            | 120,000        |                 |
|            | Sales Revenue                                   |                | 75,000          |
| 21-May-20  | Utility Expense                                 | 6,500          |                 |
|            | Cash                                            |                | 6,500           |
| 24-May-20  | Accounts Receivable (Mahmood ul Hassan)        | 25,000         |                 |
|            | Sales Revenue                                   |                | 20,000          |
| 26-May-20  | Drawings (Mr. Gulzar)                          | 40,000         |                 |
|            | Cash                                            |                | 40,000          |
| 28-May-20  | Cash                                            | 40,000         |                 |
|            | Sales Revenue                                   |                | 30,000          |
| 30-May-20  | Salary Expense                                  | 65,000         |                 |
|            | Cash                                            |                | 65,000          |

### 2) Posting to Ledger Accounts

For brevity, I will demonstrate the transactions for a few key accounts only. Additional accounts should be created, and balances computed accordingly following normal ledger-account practices.

#### Ledger Accounts

**Cash Account**
| Date       | Details                  | Debit (Rs.) | Credit (Rs.) | Balance (Rs.)    |
|------------|--------------------------|--------------|----------------|------------------|
| 01-May-20  | Capital                  | 1,000,000    |                | 1,000,000        |
| 02-May-20  | Repair Expense           |              | 12,000         | 988,000          |
| 03-May-20  | Rent Expense             |              | 50,000         | 938,000          |
| 05-May-20  | Purchases               |              | 500,000        | 438,000          |
| 08-May-20  | Sales Revenue            | 300,000      |                | 738,000          |
| 12-May-20  | Entertainment Expense     |              | 800            | 737,200          |
| 14-May-20  | Purchases               |              | 250,000        | 487,200          |
| 16-May-20  | Ahsan Payment            |              | 100,000        | 387,200          |
| 18-May-20  | Sales Revenue            | 120,000      |                | 507,200          |
| 21-May-20  | Utility Expense          |              | 6,500          | 500,700          |
| 26-May-20  | Drawings                 |              | 40,000         | 460,700          |
| 28-May-20  | Sales Revenue            | 40,000       |                | 500,700          |
| 30-May-20  | Salary Expense           |              | 65,000         | 435,700          |

**Sales Revenue Account**
| Date       | Details                  | Credit (Rs.) | Balance (Rs.)  |
|------------|--------------------------|---------------|-----------------|
| 08-May-20  | Cash                     | 250,000       | 250,000         |
| 10-May-20  | Accounts Receivable      | 70,000        | 320,000         |
| 18-May-20  | Cash                     | 75,000        | 395,000         |
| 24-May-20  | Accounts Receivable      | 20,000        | 415,000         |
| 28-May-20  | Cash                     | 30,000        | 445,000         |

**Purchases Account**
| Date       | Details                  | Debit (Rs.)   | Balance (Rs.)  |
|------------|--------------------------|----------------|-----------------|
| 05-May-20  | Cash                     | 650,000        | 650,000         |
| 14-May-20  | Cash                     | 250,000        | 900,000         |

**Drawings Account**
| Date       | Details                  | Debit (Rs.)   | Balance (Rs.)  |
|------------|--------------------------|----------------|-----------------|
| 26-May-20  | Cash                     | 40,000         | 40,000          |

### 3) Financial Statements

#### a) Income Statement for May 2020

| Particulars                | Amount (Rs.)  |
|----------------------------|----------------|
| Sales Revenue              | 445,000        |
| (-) Cost of Goods Sold     | 900,000        |
| **Gross Profit/Loss**      | **(455,000)**  |
| (-) Operating Expenses      |                |
| Rent Expense                | 50,000         |
| Salary Expense              | 65,000         |
| Utility Expense             | 6,500          |
| Entertainment Expense       | 800            |
| Repair & Maintenance Expense | 12,000         |
| **Total Expenses**         | 134,300        |
| **Net Income/Loss**        | **(589,300)**  |

#### b) Statement of Changes in Equity

| Particulars                | Amount (Rs.)   |
|----------------------------|-----------------|
| Opening Equity              | 0               |
| Add: Capital Introduced    | 1,100,000       |
| (+) Net Income/Loss        | (589,300)       |
| **Closing Equity**         | **510,700**     |

#### c) Balance Sheet as of May 31, 2020

| Liabilities                | Amount (Rs.)   | Assets                       | Amount (Rs.)      |
|----------------------------|-----------------|------------------------------|-------------------|
| Accounts Payable            | 50,000          | Cash                         | 435,700           |
| Drawings                    | 40,000          | Furniture                    | 100,000           |
|                            |                 | Accounts Receivable           | 90,000            |
|                            |                 | **Total Assets**             | **625,700**       |
| **Total Liabilities**      | **90,000** | **Total Liabilities**        | **90,000**         |

#### d) Cash Flow Statement for May 2020

**Cash Flows from Operating Activities**  
| Particulars                | Amount (Rs.)   |
|----------------------------|-----------------|
| Cash Inflows:              |                 |
| Cash Sales                 | 300,000         |
| Accounts Receivable Sales   | 90,000          |
| Cash Inflows Total         | **390,000**     |
| Cash Outflows:             |                 |
| Rent Expense               | 50,000          |
| Salary Expense             | 65,000          |
| Utility Expense            | 6,500           |
| Entertainment Expense      | 800             |
| Repair & Maintenance Expense| 12,000          |
| Drawings                   | 40,000          |
| Cash Outflows Total        | **174,300**     |
| Net Cash from Operating Activities | **215,700** |

**Net Cash Balance** (assuming starting cash balance of Rs. 0)

Total Cash at End of Month:
- Cash Inflows from Sales: + 390,000
- Cash Outflows from Expenses: - 174,300
- Opening Cash + Net Inflows - Outflows = 215,700

### Summary

This concludes the financial analysis for Gulzar Trading Enterprise for the month of May 2020. You can tailor or modify different aspects of this summary if needed, or let me know if you need any further details!