April 2020 to 31 March 2021 was £1,200. 9. Receipts from trade receivables total £52,000. 10.A new delivery van was bought for cash during the year for £16,000 and the useful life of the asset is 7 years. The expected residual value of the asset is £2,000. 11.Payments to trade payables total £40,000. 12.During the year total wages £12,000 was paid in cash however at the end of the year, the business found out £2,000 of wages for the last week of the year was not paid. 13. Bank Loan £10,200 full amount paid back during the year. 14. The owner brought in a machine for £5,000 to the business and the useful life of the asset is 4 years. The expected residual value of the assest is £1,000. 15. The short-term loan £5,000 received were deposited in the business bank account. 16. The corporation tax bill for 2020 is £10,000 half of which was paid in cash during the year and the balance was carried forward towards the next financial year.
April 2020 to 31 March 2021 was £1,200. 9. Receipts from trade receivables total £52,000. 10.A new delivery van was bought for cash during the year for £16,000 and the useful life of the asset is 7 years. The expected residual value of the asset is £2,000. 11.Payments to trade payables total £40,000. 12.During the year total wages £12,000 was paid in cash however at the end of the year, the business found out £2,000 of wages for the last week of the year was not paid. 13. Bank Loan £10,200 full amount paid back during the year. 14. The owner brought in a machine for £5,000 to the business and the useful life of the asset is 4 years. The expected residual value of the assest is £1,000. 15. The short-term loan £5,000 received were deposited in the business bank account. 16. The corporation tax bill for 2020 is £10,000 half of which was paid in cash during the year and the balance was carried forward towards the next financial year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:ASSETS
Non-current assets
Property, plant and equipment
Land
3.
130,000
Equipment at cost
Depreciation
10,000
9.000
139,000
(1,000)
Current assets
Inventories
6,000
3,000
200
Receivables
Prepaid expenses: Water
Rates
200
Cash
29.400
168.400
20.000
Total assets
Equity and Liabilities
Equity
Original Capital (Owner's Capital)
Retained profit
120,000
25.400 145,400
Liabilities
Long-term liabilities
Mortgage
10,200
Short-term liabilities
Trade payables
Accrued expenses: Rent
Tax payable
Total Equity and Liabilities
2,500
500
9.800
12.800
168.400
Transcribed Image Text:During 2020, the following transactions took place:
1. The owners introduced new capital in the form of cash £10,000.
2. Water bill for the year £2,000 and the owner paid £1,800 in cash at the end of the
financial year.
3. Inventories total £60,000 was purchased on credit.
4. Inventories total £20,000 was purchased for cash.
5. Credit sales revenue during the year total £75,000 (cost £35,000).
6. Cash sales revenue during the year total £100,000 (cost £50,000).
7. Building continued to be rented at annual rental of £10,000. During the year, owner
paid in cash £10,500 plus £1,000 towards the next year.
8. Rates on the premises were paid in cash during the year as follows: for the period 1
April 2020 to 31 March 2021 was £1,200.
9. Receipts from trade receivables total £52,000.
10.A new delivery van was bought for cash during the year for £16,000 and the useful
life of the asset is 7 years. The expected residual value of the asset is £2,000.
11.Payments to trade payables total £40,000.
12. During the year total wages £12,000 was paid in cash however at the end of the year,
the business found out £2,000 of wages for the last week of the year was not paid.
13. Bank Loan £10,200 full amount paid back during the year.
14. The owner brought in a machine for £5,000 to the business and the useful life of the
asset is 4 years. The expected residual value of the assest is £1,000.
15. The short-term loan £5,000 received were deposited in the business bank account.
16.The corporation tax bill for 2020 is £10,000 half of which was paid in cash during the
year and the balance was carried forward towards the next financial year.
The business uses the straight-line method for depreciating its non-current assets.
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