- 15 Marks
FA – May 2012 – L1 – SB – Q6 – Financial Statements Preparation
Prepare Statements of Affairs for two years and calculate opening capital, net worth, and profit.
Question
Fortward Geso Trading Store maintained a single-entry system. The following information was extracted from the records:
| Year Ended | 31 December 2011 | 31 December 2010 |
|---|---|---|
| Accrued expenses | 10,000 | — |
| Accounts receivable | 196,000 | 130,000 |
| Prepaid expenses | — | 16,000 |
| Bank balances | (40,000) | 200,000 |
| Investment | 500,000 | — |
| Cash balance | 366,000 | 106,000 |
| Accounts payable | 74,000 | 90,000 |
| Land and buildings | 1,500,000 | 1,500,000 |
| Delivery van | 260,000 | 260,000 |
| Inventories | 190,000 | 74,000 |
| Loan from bank | 300,000 | 300,000 |
The following additional information was also made available in respect of the 2011 accounting year:
(i) Provision for doubtful debts should be made for N3,000.
(ii) Depreciation is to be provided on book value as follows:
(a) Land and buildings 5%
(b) Delivery van 10%
(iii) Additional capital of N250,000 was introduced into the business during the year.
(iv) The owner of the store withdrew a total sum of N20,000 during the year.
You are required to:
Prepare the Statements of Affairs of Fortward Geso Trading Stores for the two years to show:
(a) The opening capital (6 Marks)
(b) Net worth of the business (6 Marks)
(c) Profit (3 Marks)
Find Related Questions by Tags, levels, etc.
- Tags: Profit Calculation, Single entry system, Statements of Affairs
- Level: Level 1
- Topic: Financial Statements Preparation
- Series: MAY 2012