Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 Q3-1 (d) C 50 000 70 000 (58 000) (15 000) 47 000 Beginning owner’s equity Income Expenses Distributions Ending owner’s equity Q3-2 (a) Opening equity Income Expenses Distributions (10 000 + 1 700 + 300) – (3 000 + 600 + 400) 8 000 2 500 (1 000) (500) 9 000 Q3-3 (b) Q3-4 (d) Q3-5 (c) Q3-6 (d) Q3-7 (b) Q3-8 (d) © Kolitz 6th edition, 2019 Page 1 The Accounting Equation and the Analysis of Transactions Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 Q3-9 (c) Owner’s equity 30/06/X1 Owner’s equity 30/06/X0 (Assets = 1 800 000+ 1 000 000 + 800 000 +) (Liabilities = 250 000 + 400 000 + 500 000) (Assets = 1 600 000 + 600 000 + 100 000 + 500 000 +) (Liabilities = 700 000) C 2 450 000 (2 100 000) 350 000 1 040 000 1 390 000 Distributions Profit for the period Q3-10 3-10-1 (a) C 38 000 38 000 (24 000) 6 000 20 000 Ending owner’s equity Beginning owner’s equity Capital contribution Distributions Profit for the period 3-10-2 (c) Ending owner’s equity Beginning owner’s equity C *78 000 (38 000) 40 000 (20 000) 12 000 32 000 (^118 000 - 40 000) Capital contribution Distributions Profit for the period * First step, calculate ending owner’s equity ^ Second step, calculate assets using accounting equation, ie A – 40 000 = 78 000 © Kolitz 6th edition, 2019 Page 2 The Accounting Equation and the Analysis of Transactions Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 E3 - 1 a) Accounting equation worksheet ASSETS # 1 2 3 4 5 6 7 8 9 10 11 Bank Accounts receivable = Supplies 7 000 3 000 (2 500) LIABILITIES Equipment Loan Accounts payable OWNERS EQUITY Capital 7 000 2 500 1 000 800 800 1 000 1 000 (600) (200) (700) (300) 8 000 Expenses 3 000 1 000 600 (200) (700) Income 400 700 2 500 3 000 10 310 7 000 1 800 b) Statement of profit or loss THE POP STATEMENT OF PROFIT OR LOSS FOR THE MONTH ENDED 28 FEBRUARY 20X7 C Income Fees Expenses Wages Supplies used Interest 1 800 (510) 200 300 10 (3 000 X 0,04 X 1/12) Profit for the period 1 290 c) Statement of changes in equity THE POP STATEMENT OF CHANGES IN EQUITY FOR THE MONTH ENDED 28 FEBRUARY 20X7 Balance at 01/02/X7 Capital contribution Profit for the period Balance at 28/02/X7 © Kolitz 6th edition, 2019 (First period of trading) Page 3 C 7 000 1 290 8 290 The Accounting Equation and the Analysis of Transactions (300) (10) (510) Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 E3-1 continued . . d) Statement of financial position THE POP STATEMENT OF FINANCIAL POSITION AT 28 FEBRUARY 20X7 C ASSETS Equipment Supplies Accounts receivable Bank 2 500 700 400 8 000 11 600 EQUITY AND LIABILITIES Equity Capital (7 000 + 1 290) Liabilities Loan Accounts payable Expenses payable 8 290 3 000 300 10 11 600 © Kolitz 6th edition, 2019 Page 4 The Accounting Equation and the Analysis of Transactions Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 E3-1 continued . . . The distinction between non-current and current assets and non-current and current liabilities is introduced in Chapter 6, Preparation of the Financial Statements. If your course or module introduces this earlier, the statement of financial position has been prepared here showing the non-current and current distinction. d) Statement of financial position THE POP STATEMENT OF FINANCIAL POSITION AT 28 FEBRUARY 20X7 C ASSETS Non-current assets Equipment Current assets Supplies Accounts receivable Bank 2 500 9 100 700 400 8 000 11 600 EQUITY AND LIABILITIES Equity Capital (7 000 + 1 290) Non-current liabilities Loan Current liabilities Accounts payable Expenses payable 8 290 3 000 310 300 10 11 600 © Kolitz 6th edition, 2019 Page 5 The Accounting Equation and the Analysis of Transactions Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 E3-2 a) Accounting equation worksheet = OWNER’S EQUITY LIABILITIES 1 2 3 4 5 6 7 8 9 10 11 10 000 (150) (2 000) (500) 10 000 150 15 000 13 000 500 4 000 4 000 (600) (400) (500) (600) (400) (500) (400) (400) (125) (50) (1 575) (125) 5 850 Distribution s Expenses Income Capital Accounts payable Equipment Supplies Rent prepaid Accounts receivable Bank # ASSETS 4 000 (50) 100 100 14 875 13 000 10 000 4 000 b) Statement of profit or loss ENJOY AGAIN STATEMENT OF PROFIT OR LOSS FOR THE MONTH ENDED 30 APRIL 20X7 C Income Recycling fees Expenses Salaries Administrative Supplies used Equipment usage Rent (15 000/10 x 1/12) Profit for the period 4 000 (1 575) 600 400 400 125 50 2 425 c) Statement of changes in equity ENJOY AGAIN STATEMENT OF CHANGES IN EQUITY FOR THE MONTH ENDED 30 APRIL 20X7 Balance at 01/04/X7 Contribution to capital Profit for the period Distributions Balance at 30/04/X7 © Kolitz 6th edition, 2019 (First period of trading) Page 6 Capital C 10 000 2 425 (500) 11 925 The Accounting Equation and the Analysis of Transactions (500) Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 E 3-2 continued . . . d) Statement of financial position ENJOY AGAIN STATEMENT OF FINANCIAL POSITION AT 30 APRIL 20X7 C ASSETS Equipment Accounts receivable Supplies Rent paid in advance Bank 14 875 4 000 100 100 5 850 24 925 EQUITY AND LIABILITIES Equity Capital 11 925 Liabilities Accounts payable 13 000 24 925 e) Percentage return on capital Profit Capital © Kolitz 6th edition, 2019 2 425 11 925 X 100 = 20,34% Page 7 The Accounting Equation and the Analysis of Transactions Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 E3-2 continued . . . The distinction between non-current and current assets and non-current and current liabilities is introduced in Chapter 6, Preparation of the Financial Statements. If your course or module introduces this earlier, the statement of financial position has been prepared here showing the non-current and current distinction. d) Statement of financial position ENJOY AGAIN STATEMENT OF FINANCIAL POSITION AT 30 APRIL 20X7 C ASSETS Non-current assets Equipment Current assets Accounts receivable Supplies Rent paid in advance Bank 14 875 10 050 4 000 100 100 5 850 24 925 EQUITY AND LIABILITIES Equity Capital 11 925 Current liabilities Accounts payable © Kolitz 6th edition, 2019 13 000 24 925 Page 8 The Accounting Equation and the Analysis of Transactions Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 E3-3 a) and b) Accounting equation worksheet (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) 8 000 (600) (3 600) 2 000 4 200 1 200 1 800 Accounts payable Insurance paid in advance Liabilities Supplies Bank Accounts receivable Assets 1 400 (600) Owner’s equity C 13 800 I D (3 600) (2 000) 500 500 11 500 11 500 (2 400) 2 000 (180) (900) (2 400) 2 000 (180) (900) (720) 4 320 E 13 700 980 20 650 (150) 1 650 1 300 13 800 13 500 20 650 (720) (150) (7 050) (900) c) Statement of profit or loss THE PUFFING BILLY STATEMENT OF PROFIT OR LOSS FOR MONTH ENDED 31 JULY 20X5 C Income Train fares Expenses Hire of steam train Wages Water & light Supplies Insurance (11 500 + 2 000) 13 500 (1 200 + 500 - 980) (1 800 / 12) (7 050) 3 600 2 400 180 720 150 Profit for the period © Kolitz 6th edition, 2019 6 450 Page 9 The Accounting Equation and the Analysis of Transactions Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 E3-3 continued … d) Statement of changes in equity THE PUFFING BILLY STATEMENT OF CHANGES IN EQUITY FOR THE MONTH ENDED 31 JULY 20X5 Capital C 13 800 6 450 (900) 19 350 Balance at 01/07/X5 Profit for the period Distributions Balance at 31/07/X5 e) Statement of financial position THE PUFFING BILLY STATEMENT OF FINANCIAL POSITION AT 31 JULY 20X5 C ASSETS Supplies Accounts receivable Insurance paid in advance Bank 980 13 700 1 650 4 320 20 650 EQUITY AND LIABILITIES Equity Capital 19 350 Liabilities Accounts payable © Kolitz 6th edition, 2019 1 300 20 650 Page 10 The Accounting Equation and the Analysis of Transactions Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 E3-3 continued … The distinction between non-current and current assets and non-current and current liabilities is introduced in Chapter 6, ‘Preparation of the Financial Statements’. If your course or module introduces this earlier, the statement of financial position has been prepared here showing the non-current and current distinction. e) Statement of financial position THE PUFFING BILLY STATEMENT OF FINANCIAL POSITION AT 31 JULY 20X5 C ASSETS Current assets Supplies Accounts receivable Insurance paid in advance Bank 980 13 700 1 650 4 320 20 650 EQUITY AND LIABILITIES Equity Capital 19 350 Current liabilities Accounts payable © Kolitz 6th edition, 2019 1 300 20 650 Page 11 The Accounting Equation and the Analysis of Transactions Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 E3-4 a) Accounting equation worksheet 20X6 Jan Bank 100 000 (21 000) ASSETS Accounts Inventory receivable LIABILITIES Accounts Furniture payable OWNER’S EQUITY Capital 100 000 Income Expenses 21 000 50 000 50 000 9 000 9 000 (6 000) (6 000) Feb 18 000 18 000 (4 000) 13 000 (4 000) 13 000 (8 000) (500) Mar (8 000) (500) (1 500) 10 000 (1 500) 10 000 (7 500) (7 500) 8 000 8 000 (6 000) (6 000) (40 000) (5 000) 60 500 Distributions (40 000) (5 000) 22 000 8 000 (825) 38 175 128 675 27 000 100 000 40 000 27 500 (825) (33 825) 101 175 b) Statement of profit or loss THE BROWN MUSHROOM STATEMENT OF PROFIT OR LOSS FOR THE PERIOD ENDED MARCH 20X6 C Income Sales Expenses Cost of sales Wages Advertising Depreciation on furniture & fittings: (9 000 + 13 000 + 10 000 +8 000) [(21 000 / 10 X 3/12) + (18 000 /10 X 2/12)] Profit for the period © Kolitz 6th edition, 2019 40 000 (33 825) 27 500 1 500 4 000 825 6 175 Page 12 The Accounting Equation and the Analysis of Transactions (5 000) Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 E3-4 continued . . . c) Statement of financial position THE BROWN MUSHROOM STATEMENT OF FINANCIAL POSITION AT 31 MARCH 20X6 C ASSETS Furniture Inventory Accounts receivable Bank 38 175 22 000 8 000 60 500 128 675 EQUITY & LIABILITIES Equity Capital (0 + 100 000 + 6 175 – 5 000) Liabilities Accounts payable © Kolitz 6th edition, 2019 101 175 27 500 128 675 Page 13 The Accounting Equation and the Analysis of Transactions Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 E 3-4 continued . . . The concept of gross profit is introduced in Chapter 6, ‘Preparation of the Financial Statements’. If your course or module introduces this earlier, the statement of profit or loss has been prepared here showing the gross profit. b) Statement of profit or loss THE BROWN MUSHROOM STATEMENT OF PROFIT OR LOSS FOR THE PERIOD ENDED MARCH 20X6 (9 000 + 13 000 + 10 000 +8 000) (6 000 + 8 000 + 7 500 + 6 000) Sales Cost of sales Gross profit Expenses Wages Advertising Depreciation on furniture & fittings: [(21 000 / 10 X 3/12) + (18 000 /10 X 2/12)] Profit for the period C 40 000 (27 500) 12 500 (6 325) 1 500 4 000 825 6 175 The distinction between non-current and current assets and non-current and current liabilities is introduced in Chapter 6, ‘Preparation of the Financial Statements’. If your course or module introduces this earlier, the statement of financial position has been prepared here showing the non-current and current distinction. c) Statement of financial position THE BROWN MUSHROOM STATEMENT OF FINANCIAL POSITION AT 31 MARCH 20X6 C ASSETS Non-current assets Furniture Current assets Inventory Accounts Receivable Bank 38 175 90 500 22 000 8 000 60 500 128 675 EQUITY & LIABILITIES Equity Capital (0 + 100 000 + 6 175 – 5 000) Current liabilities Accounts payable © Kolitz 6th edition, 2019 101 175 27 500 128 675 Page 14 The Accounting Equation and the Analysis of Transactions Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 E3-5 a) Profit calculation: distribution but no contribution Ending owner’s equity Beginning owner’s equity Movement Distributions (Add back, as distributions decrease owner’s equity but do not comprise an expense) Profit for the period C 20 000 (15 000) 5 000 17 000 22 000 b) Profit calculation: contribution but no distribution Ending owner’s equity Beginning owner’s equity Movement Contribution (Subtract, as contributions increase owner’s equity but do not comprise income) Profit for the period C 20 000 (15 000) 5 000 (4 000) 1 000 c) Profit calculation: contribution and distribution C 20 000 (15 000) 5 000 17 000 22 000 (4 000) 18 000 Ending owner’s equity Beginning owner’s equity Movement Distributions Contribution Profit for the period Workings Bank Expenses paid in advance Income receivable Income received in advance Expenses payable . .Owner’s equity © Kolitz 6th edition, 2019 31/12/X5 C 9 000 7 200 4 800 (4 000) (2 000) 15 000 (Asset) (Asset) (Asset) (Liability) (Liability) Page 15 31/12/X6 C 12 000 10 000 6 500 (5 000) (3 500) 20 000 The Accounting Equation and the Analysis of Transactions Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 E3-6 a) Owner’s equity at end of period Assets Cameras, computers and production equipment Bank (1 500 000 – 37 500) C 4 712 500 1 462 500 3 250 000 Liabilities (2 000 000) Owner’s equity 2 712 500 b) Profit for the period C 2 500 000 (500 000) 712 500 2 712 500 Owner’s equity at 01/04/X5 Contribution Distribution Profit for the period Owner’s equity at 30/06/X5 c) Income earned during the period . . Income C 2 700 000 Expenses Salaries Rent Advertising Depreciation 1 987 500 900 000 600 000 450 000 37 500 Profit for the period © Kolitz 6th edition, 2019 712 500 Page 16 The Accounting Equation and the Analysis of Transactions Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 P3-1 (a) Accounting equation worksheet 3 300 (2 400) 1 700 5 350 6 (800) (1 700) 400 10 (210) 11 (1 000) 400 2 250 (210) (1 000) (180) 12 (180) (150) 13 (150) (200) 14 1 090 Distributions (800) 8 (2 250) Expenses 1 700 350 1 700 9 Income Capital Acc pay 1 100 2 400 4 7 13 900 800 2 Insurance paid in advance Rent paid in advance 8 200 Supplies Office equipment 5 700 Acc rec Bank 1 OWNER’S EQUITY LIABILITIES ASSETS 8 850 400 120 2 200 (750) 1 500 (950) 300 13 900 2 450 (1 490) (1 000) b) Statement of profit or loss GREEN EARTH STATEMENT OF PROFIT OR LOSS FOR THE MONTH ENDED 31 OCTOBER 20X5 C Income Fees Expenses Electricity Supplies Depreciation Rent Insurance 2 450 (300 – 120) (9 000 / 5 x 1/12) (2 250 /3) (2 400 / 12) Profit for period © Kolitz 6th edition, 2019 (1 490) 210 180 150 750 200 960 Page 17 The Accounting Equation and the Analysis of Transactions Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 P3-1 continued . . . c) Statement of changes in equity GREEN EARTH STATEMENT OF CHANGE IN EQUITY FOR THE MONTH ENDED 31 OCTOBER 20X5 C Opening balance Capital contribution Profit for period Distributions Closing balance 0 13 900 960 (1 000) 13 860 d) Statement of financial position GREEN EARTH STATEMENT OF FINANCIAL POSITION AT 31 OCTOBER 20X5 C ASSETS Office equipment Accounts receivable Office supplies Insurance paid in advance Rent paid in advance Bank (9 000 – 150) 8 850 400 120 2 200 1 500 1 090 14 160 (2 400 – 200) (2 250 – 750) EQUITY & LIABILITIES Equity Capital Liabilities Accounts payable © Kolitz 6th edition, 2019 13 860 300 14 160 Page 18 The Accounting Equation and the Analysis of Transactions Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 P3-1 continued . . . The distinction between non-current and current assets and non-current and current liabilities is introduced in Chapter 6, ‘Preparation of the Financial Statements’. If your course or module introduces this earlier, the statement of financial position has been prepared here showing the non-current and current distinction. d) Statement of financial position GREEN EARTH STATEMENT OF FINANCIAL POSITION AT 31 OCTOBER 20X5 C ASSETS Non-current assets Office equipment Current assets Accounts receivable Office supplies Insurance paid in advance Rent paid in advance Bank (9 000 – 150) 8 850 (2 400 – 200) (2 250 – 750) 400 120 2 200 1 500 1 090 14 160 EQUITY & LIABILITIES Equity Capital Current liabilities Accounts payable © Kolitz 6th edition, 2019 13 860 300 14 160 Page 19 The Accounting Equation and the Analysis of Transactions Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 P3-2 a) Accounting equation worksheet 27 000 (600) Nov 1 (750) 3 400 (580) 580 3 400 (580) Nov 16 1 700 1 700 Nov 23 1 200 1 200 Nov 26 Distributions 750 580 Nov 13 Expenses 24 000 600 Nov 3 Nov 9 Income 27 000 24 000 Nov 1 Capital Accounts payable Supplies Equipment Accounts receivable Insurance paid in advance Rent paid in advance Bank Nov 1 OWNER’S EQUITY LIABILITIES ASSETS 1 700 (1 700) Nov 28 (1 000) (1 000) Nov 29 Nov 30 340 340 (80) Nov 30 (650) Nov 30 (1 200) Nov 30 (2 250) (80) (650) 1 200 2 250 Nov 30 (400) Nov 30 (400) (600) Nov 30 (600) (750) (750) Nov 30 (500) 24 990 1 200 2 250 1 200 23 500 (500) 520 53 660 © Kolitz 6th edition, 2019 340 340 Page 20 51 000 6 300 (2 980) 53 320 The Accounting Equation and the Analysis of Transactions (1 000) Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 P3-2 continued . . . b) Statement of profit or loss CURVY SPINE STATEMENT OF PROFIT OR LOSS FOR THE MONTH ENDED 30 NOVEMBER 20X5 C Income Fees (3 400 + 1 700 +1 200) 6 300 (2 980) 80 650 400 600 750 500 Expenses Telephone Salary Supplies Rent Insurance Equipment: Depreciation Profit for the period 3 320 c) Statement of changes in equity CURVY SPINE STATEMENT OF CHANGES IN EQUITY FOR THE MONTH ENDED 30 NOVEMBER 20X5 C Balance at 01/11/X5 Capital contribution Distributions Profit for the period Balance at 30/11/X5 51 000 (1 000) 3 320 53 320 d) Statement of financial position CURVY SPINE STATEMENT OF FINANCIAL POSITION AT 30 NOVEMBER 20X5 C ASSETS Medical equipment Medical supplies Accounts receivable Expenses paid in advance Bank EQUITY & LIABILITIES Equity Capital (1 200 + 2 250) (51 000 + 3 320 – 1 000) or from SOCIE LIABILITIES Accounts payable © Kolitz 6th edition, 2019 23 500 520 1 200 3 450 24 990 53 660 (580 + 340 - 400) 53 320 340 53 660 Page 21 The Accounting Equation and the Analysis of Transactions Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 P3-2 continued . . . d) Statement of financial position The distinction between non-current and current assets and non-current and current liabilities is introduced in Chapter 6, ‘Preparation of the Financial Statements’. If your course or module introduces this earlier, the statement of financial position has been prepared here showing the non-current and current distinction. CURVY SPINE STATEMENT OF FINANCIAL POSITION AT 30 NOVEMBER 20X5 C ASSETS Non-current assets Medical equipment Current assets Medical supplies Accounts receivable Expenses paid in advance Bank EQUITY & LIABILITIES Equity Capital 23 500 (580 + 340 - 400) (1 200 + 2 250) 520 1 200 3 450 24 990 53 660 (51 000 + 3 320 – 1 000) or from SOCIE 53 320 Current liabilities Accounts payable © Kolitz 6th edition, 2019 340 53 660 Page 22 The Accounting Equation and the Analysis of Transactions Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 P3-3 a) Accounting equation spreadsheet Assets # 1 2 3 Bank + Rent paid in advance Call deposit + Accounts receivable + + Computer & office equipment + Motor vehicle + Interest receivable Elec and + Fees + tel received in payable advance Accounts payable + Wheels Bank loan 100 000 Capital + Income - Expenses - Distributions 100 000 (4 000) + 4 000 (10 000) 10 000 4 5 Owner’s equity Liabilities Office supplies 1 500 1 500 (40 000) + 40 000 6 7 100 000 100 000 8 9 10 100 (100) 3 000 3 000 (800) (800) 11 2 000 2 000 12 100 13 7 000 14 (2 425) + (100) 7 000 (2 425) 15 4 000 16 (200) 17 (500) 18 2 000 19 (6 000) 4 000 (200) (500) + (2 000) (6 000) 20 (2 000) 21 2 000 25 22 25 (1 000) (1 000) 23 500 24 (500) (200) (200) 25 (333) 48 075 + 3 000 10 000 + 4 000 + 1 300 + 39 667 Assets = 204 400 © Kolitz 6th edition, 2019 (1 667) + 98 333 (2 000) 25 500 + 5 000 + 1 500 Liabilities = 107 000 Page 23 The Accounting Equation and the Analysis of Transactions + 100 000 100 000 + 11 025 + (7 625) + Owner's Equity = 97 400 (6 000) Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 P3-3 continued . . . b) Statement of profit or loss FINANCIAL FITNESS STATEMENT OF PROFIT OR LOSS FOR THE MONTH ENDED 31 MARCH 20X5 Income Fees Interest C 11 025 11 000 25 Expenses Petrol Advertising Salaries Rent expense Telephone & electricity Office supplies used Asset usage Interest (7 625) 200 800 2 425 1 000 500 200 2 000 500 3 400 Profit for the period c) Statement of changes in equity FINANCIAL FITNESS STATEMENT OF CHANGES IN EQUITY FOR THE MONTH ENDED 31 MARCH 20X5 C Balance at 1 January 20X5 Profit for the period Distributions Contribution to capital Balance at 31 March 20X5 © Kolitz 6th edition, 2019 3 400 (6 000) 100 000 97 400 Page 24 The Accounting Equation and the Analysis of Transactions Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 P3-3 continued . . . d) Statement of financial position FINANCIAL FITNESS STATEMENT OF FINANCIAL POSITION AT 31 MARCH 20X5 C 204 400 98 333 39 667 1 300 4 000 3 000 25 10 000 48 075 ASSETS Motor vehicle Computer & office equipment Office supplies Accounts receivable Rent paid in advance Interest receivable Call deposit Bank 204 400 EQUITY AND LIABILITIES Capital 97 400 107 000 100 000 1 500 5 000 500 Liabilities Loan from Wheels Bank Accounts payable Fees received in advance Telephone and electricity payable 204 400 © Kolitz 6th edition, 2019 Page 25 The Accounting Equation and the Analysis of Transactions Solutions to Questions, Exercises & Problems in Financial Accounting: A Concepts-Based Introduction Chapter 3 d) Statement of financial position The distinction between non-current and current assets and non-current and current liabilities is introduced in Chapter 6, ‘Preparation of the Financial Statements’. If your course or module introduces this earlier, the statement of financial position has been prepared here showing the non-current and current distinction. FINANCIAL FITNESS STATEMENT OF FINANCIAL POSITION AT 31 MARCH 20X5 C ASSETS 138 000 98 333 39 667 66 400 1 300 4 000 3 000 25 10 000 48 075 Non-current assets Motor vehicle Computer & office equipment Current assets Office supplies Accounts receivable Rent paid in advance Interest receivable Call deposit Bank 204 400 EQUITY AND LIABILITIES Equity Capital 97 400 Non-current liabilities Loan from Wheels Bank Current liabilities Accounts payable Fees received in advance Telephone and electricity payable 100 000 7 000 1 500 5 000 500 204 400 © Kolitz 6th edition, 2019 Page 26 The Accounting Equation and the Analysis of Transactions
