QUESTION 1 Dr 1. General Ledger Dr 01-Jul-19 23-Jul-19 31-Jul-19 Bal. c/f 01/08/19 $ $ $ $ 31-Jul-19 $ 2. Cr Cash 20,000.00 1,500.00 50.00 1,900.00 02-Jul-19 05-Jul-19 09-Jul-19 31-Jul-19 $ $ $ $ 18,000.00 500.00 1,000.00 150.00 James 150.00 01-Jul-19 $ Bal. c/f 01/08/19 $ 20,000.00 19,850.00 02-Jul-19 $ 31-Jul-19 $ Bal. c/f 01/08/19 $ Bank 18,000.00 450.00 16,530.00 05-Jul-19 $ Bal. c/f 01/08/19 $ Rent 500.00 500.00 06-Jul-19 $ Bal. c/f 01/08/19 $ Equipment 300.00 250.00 09-Jul-19 $ 10-Jul-19 $ Bal. c/f 01/08/19 $ Purchases 1,000.00 2,000.00 3,000.00 20-Jul-19 $ 31-Jul-19 $ Bal. c/f 01/08/19 $ Seddon Creditor 200.00 10-Jul-19 $ 1,800.00 - 06-Jul-19 $ 31-Jul-19 $ 300.00 1,620.00 31-Jul-19 $ 50.00 2,000.00 Purchases Returned 20-Jul-19 $ Bal. c/f 01/08/19 $ 200.00 200.00 Sales 23-Jul-19 $ 26-Jul-19 $ Bal. c/f 01/08/19 $ 28-Jul-19 $ Bal. c/f 01/08/19 $ 26-Jul-19 $ 1,500.00 1,000.00 2,500.00 Sales Returned 500.00 500.00 Frodsham Debtor 1,000.00 28-Jul-19 $ 31-Jul-19 $ Bal. c/f 01/08/19 $ 500.00 500.00 - Discount Received 31-Jul-19 $ Bal. c/f 01/08/19 $ 31-Jul-19 $ Bal. c/f 01/08/19 $ Cr Trial Balance 31 July 2019 Discount Allowed 50.00 50.00 180.00 180.00 Cash Bank Rent Equipment Purchases Sales Returned Discount Allowed $ $ $ $ $ $ $ $ 1,900.00 16,530.00 500.00 250.00 3,000.00 500.00 50.00 22,730.00 James Purchases Returned Sales Discount Received $ $ $ $ 19,850.00 200.00 2,500.00 180.00 $ 22,730.00 QUESTION 2 1. Dr Cr Statement of Profit for the year ended 31 December 2019 Purchases € 65,000.00 Sales € Sales returns € 1,240.00 Purchase returns € Inventory 1/1/2019 € 8,800.00 Discounts received € Carriage Inwards € 2,000.00 Inventory 31/12/2019 € Discounts allowed € 470.00 Rent and rates € 3,970.00 Lighting and heating € 2,590.00 Insurance € 610.00 Salaries and wages € 17,800.00 Sundry expenses € 700.00 Telephone € 1,300.00 Carriage outwards € 1,100.00 Bad Debts € 700.00 Depreciations € 5,000.00 Profit for the year € Dr Cr Statement of Financial Position at 31 December 2019 Non-Current Assets Equity Fixed Assets Fixtures and fittings € 31,000.00 Capital € Provision for depr. F&F -€ 5,000.00 Retained earings € Motor vehicles € 24,000.00 Provision for depr. MV -€ 7,000.00 Total € 43,000.00 Total € Current Assets Accounts receivable € Cash at bank € Cash in hand € Drawings € Inventory € Prepayments € Total € 15,600.00 4,000.00 1,050.00 18,000.00 9,000.00 410.00 48,060.00 Total Assets 91,060.00 Total Liabilities € 150,000.00 1,000.00 380.00 9,000.00 49,100.00 25,000.00 49,100.00 74,100.00 Current Liabilities Accounts payable € 15,410.00 Acrruals € 1,250.00 Provision for Bad Debts € 300.00 Total € 16,960.00 € 91,060.00 QUESTION 3 1. Accruals: Accruals are the expenses of current periods but are paid in other future periods. 1. Electricity is paid after the period for which is paid passed (November-December is paid January). 2. Telephone is paid usualy one month after the period for which is paid (December is paid January). 3. Rent sometimes is paid the next month for which it is paid (December is paid January). Prepayments: Prepayments are the expenses paid before, in current periods but are for other future periods. 1. Sometimes suppliers are paid before for something they will provide in future periods (Goods/services provided in January 2019 are paid in 2018). 2. Insurance is paid usualy before for the period for which it covers (January-December 2019 is paid in 2018). 3. Rent sometimes is paid the before the month for which it is paid (January is paid in December). 2. a) Current Assets Current Assets are the things owned by the company who are to be used in the next 12 months, like inventory, cash, receivables, prepayments etc. Non-Current Assets Non-Current Assets are the things owned by the company who are to be used in periods more than the next 12 months, like motor vehicles, furniture, buldings etc. b) Current Liabilities Current Liabilities are the things that the company owes to others who are to be settled in the next 12 months, like accruals, payables, bank overdraft etc. Non-Current Liabilities Non-Current Liabilities are the things that the company owes to others who are to be settled in periods more than the next 12 months, like loan payable in 10 years etc. b) These distinctions are useful because they help categorize the assets and liabilities of a company to those within the next 12 months and those for more than 12 months. This is good as it provides information within some set periods and what is expected to be paid or received in these future periods, in order to understand the financial position of the company in set time periods and how good or bad it does or how it may do in the future.
