As at 31 December 2019, the company require inclusion in a financial statement the following: 1 January 2019 the company made a loan of £12,000 to an employee, charging 2% interest per year. On 1 January 2020, the employee repaid the loan in full plus interest The company paid insurance premium of £9,000 in September 2019, for period ending 31 August 2020 In January 2020, the company received overdue due rent of £4,000 from customer, covering period to December 2019. Calculate the amount to be included the company’s statement of financial position as at 31 December 2019 a.Current assets £10,000 Current liabilities £12,240 b.Current assets £22,240 Current liabilities nil c.Current assets £10,240 Current liabilities nil d.Current assets £16,240 Current liabilities £6,000

On 1st January, 2019, a loan of £12,000 given to an employee, which earns an interest of 2% p.a.…

Answered: 1 January 2019 the company made a loan…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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As at 31 December 2019, the company require inclusion in a financial statement the following:

1. 1 January 2019 the company made a loan of £12,000 to an employee, charging 2% interest per year. On 1 January 2020, the employee repaid the loan in full plus interest
2. The company paid insurance premium of £9,000 in September 2019, for period ending 31 August 2020
3. In January 2020, the company received overdue due rent of £4,000 from customer, covering period to December 2019.

Calculate the amount to be included the company’s statement of financial position as at 31 December 2019

	a.	Current assets £10,000 Current liabilities £12,240
	b.	Current assets £22,240 Current liabilities nil
	c.	Current assets £10,240 Current liabilities nil
	d.	Current assets £16,240 Current liabilities £6,000

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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