Juggling Jim's Showcase is a circus shop run by your cousin, Jim. He is at the end of his first year in business and he has heard that you have been studying accounting. Jim once took an accounting course himself, but he failed his exams and so he asks you to help him produce some accounts. He has employed a clerk to write up his books which were kept correctly. Jim then prepared the following trial balance which he cannot get to balance. He asks you to help him see where he has gone wrong. Jim's Trial Balance Premises Accumulate depreciation on premises Fixtures and fittings Accumulated depreciation on fixtures and fittings Vans Accumulated depreciation on vans Inventories at end of year Closing trade receivables Closing trade payables Bank balance (overdraft) Capital Profit for the year Loan € 150,000 40,000 4,000 20,000 2,000 12,000 (b) 10,000 2,000 240,000 € 3,000 48,000 50,000 39,000 160,000 300,000 You ascertain the following further information: A van costing €6,000 with accumulated depreciation of €600 was sold for €4,500 cash just before the year-end. This transaction has not yet been reflected in the company's books. Required (a) Produce two corrected trial balances for Jim, one before and one after incorporating adjustment for the note. Show workings using T accounts. Prepare a Statement of Financial Position for Jim's business at the end of its first year, using the Common European Format.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Help with part (b)

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Juggling Jim's Showcase is a circus shop run by your cousin, Jim. He is at the end of his first year in
business and he has heard that you have been studying accounting. Jim once took an accounting
course himself, but he failed his exams and so he asks you to help him produce some accounts. He
has employed a clerk to write up his books which were kept correctly. Jim then prepared the following
trial balance which he cannot get to balance. He asks you to help him see where he has gone wrong.
Jim's Trial Balance
Premises
Accumulate depreciation on premises
Fixtures and fittings
Accumulated depreciation on fixtures and fittings
Vans
Accumulated depreciation on vans
Inventories at end of year
Closing trade receivables
Closing trade payables
Bank balance (overdraft)
Capital
Profit for the year
Loan
Required
€
150,000
40,000
4,000
20,000
(b)
2,000
12,000
10,000
2,000
240,000
€
3,000
48,000
You ascertain the following further information:
A van costing €6,000 with accumulated depreciation of €600 was sold for €4,500 cash just before the
year-end. This transaction has not yet been reflected in the company's books.
50,000
39,000
160,000
300,000
(a)
Produce two corrected trial balances for Jim, one before and one after incorporating adjustment
for the note. Show workings using T accounts.
Prepare a Statement of Financial Position for Jim's business at the end of its first year, using the
Common European Format.
Transcribed Image Text:Juggling Jim's Showcase is a circus shop run by your cousin, Jim. He is at the end of his first year in business and he has heard that you have been studying accounting. Jim once took an accounting course himself, but he failed his exams and so he asks you to help him produce some accounts. He has employed a clerk to write up his books which were kept correctly. Jim then prepared the following trial balance which he cannot get to balance. He asks you to help him see where he has gone wrong. Jim's Trial Balance Premises Accumulate depreciation on premises Fixtures and fittings Accumulated depreciation on fixtures and fittings Vans Accumulated depreciation on vans Inventories at end of year Closing trade receivables Closing trade payables Bank balance (overdraft) Capital Profit for the year Loan Required € 150,000 40,000 4,000 20,000 (b) 2,000 12,000 10,000 2,000 240,000 € 3,000 48,000 You ascertain the following further information: A van costing €6,000 with accumulated depreciation of €600 was sold for €4,500 cash just before the year-end. This transaction has not yet been reflected in the company's books. 50,000 39,000 160,000 300,000 (a) Produce two corrected trial balances for Jim, one before and one after incorporating adjustment for the note. Show workings using T accounts. Prepare a Statement of Financial Position for Jim's business at the end of its first year, using the Common European Format.
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Follow-up Question
EL Question 2
Juggling Jim
Juggling Jim's Showcase is a circus shop run by your cousin, Jim. He is at the end of his first year in
business and he has heard that you have been studying accounting. Jim once took an accounting
course himself, but he failed his exams and so he asks you to help him produce some accounts. He
has employed a clerk to write up his books which were kept correctly. Jim then prepared the following
trial balance which he cannot get to balance. He asks you to help him see where he has gone wrong.
Jim's Trial Balance
Premises
Accumulate depreciation on premises
Fixtures and fittings
Accumulated depreciation on fixtures and fittings
Vans
Accumulated depreciation on vans
Inventories at end of year
Closing trade receivables
Closing trade payables
Bank balance (overdraft)
Capital
Profit for the year
Loan
Required
(a)
(b)
€
150,000
(c)
40,000
4,000
20,000
2,000
12,000
10,000
2,000
240,000
€
3,000
You ascertain the following further information:
A van costing €6,000 with accumulated depreciation of €600 was sold for €4,500 cash just before the
year-end. This transaction has not yet been reflected in the company's books.
48,000
50,000
39,000
160,000
300,000
Produce two corrected trial balances for Jim, one before and one after incorporating adjustment
for the note. Show workings using T accounts.
Prepare a Statement of Financial Position for Jim's business at the end of its first year, using the
Common European Format.
Explain how the double-entry bookkeeping system works. In your answer include information
about opening and balancing off accounts as well as details on recording different types of
transactions.
Transcribed Image Text:EL Question 2 Juggling Jim Juggling Jim's Showcase is a circus shop run by your cousin, Jim. He is at the end of his first year in business and he has heard that you have been studying accounting. Jim once took an accounting course himself, but he failed his exams and so he asks you to help him produce some accounts. He has employed a clerk to write up his books which were kept correctly. Jim then prepared the following trial balance which he cannot get to balance. He asks you to help him see where he has gone wrong. Jim's Trial Balance Premises Accumulate depreciation on premises Fixtures and fittings Accumulated depreciation on fixtures and fittings Vans Accumulated depreciation on vans Inventories at end of year Closing trade receivables Closing trade payables Bank balance (overdraft) Capital Profit for the year Loan Required (a) (b) € 150,000 (c) 40,000 4,000 20,000 2,000 12,000 10,000 2,000 240,000 € 3,000 You ascertain the following further information: A van costing €6,000 with accumulated depreciation of €600 was sold for €4,500 cash just before the year-end. This transaction has not yet been reflected in the company's books. 48,000 50,000 39,000 160,000 300,000 Produce two corrected trial balances for Jim, one before and one after incorporating adjustment for the note. Show workings using T accounts. Prepare a Statement of Financial Position for Jim's business at the end of its first year, using the Common European Format. Explain how the double-entry bookkeeping system works. In your answer include information about opening and balancing off accounts as well as details on recording different types of transactions.
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Follow-up Question

Help with part (C)

EL Question 2
Juggling Jim
Juggling Jim's Showcase is a circus shop run by your cousin, Jim. He is at the end of his first year in
business and he has heard that you have been studying accounting. Jim once took an accounting
course himself, but he failed his exams and so he asks you to help him produce some accounts. He
has employed a clerk to write up his books which were kept correctly. Jim then prepared the following
trial balance which he cannot get to balance. He asks you to help him see where he has gone wrong.
Jim's Trial Balance
Premises
Accumulate depreciation on premises
Fixtures and fittings
Accumulated depreciation on fixtures and fittings
Vans
Accumulated depreciation on vans
Inventories at end of year
Closing trade receivables
Closing trade payables
Bank balance (overdraft)
Capital
Profit for the year
Loan
Required
(a)
(b)
€
150,000
(c)
40,000
4,000
20,000
2,000
12,000
10,000
2,000
240,000
€
3,000
You ascertain the following further information:
A van costing €6,000 with accumulated depreciation of €600 was sold for €4,500 cash just before the
year-end. This transaction has not yet been reflected in the company's books.
48,000
50,000
39,000
160,000
300,000
Produce two corrected trial balances for Jim, one before and one after incorporating adjustment
for the note. Show workings using T accounts.
Prepare a Statement of Financial Position for Jim's business at the end of its first year, using the
Common European Format.
Explain how the double-entry bookkeeping system works. In your answer include information
about opening and balancing off accounts as well as details on recording different types of
transactions.
Transcribed Image Text:EL Question 2 Juggling Jim Juggling Jim's Showcase is a circus shop run by your cousin, Jim. He is at the end of his first year in business and he has heard that you have been studying accounting. Jim once took an accounting course himself, but he failed his exams and so he asks you to help him produce some accounts. He has employed a clerk to write up his books which were kept correctly. Jim then prepared the following trial balance which he cannot get to balance. He asks you to help him see where he has gone wrong. Jim's Trial Balance Premises Accumulate depreciation on premises Fixtures and fittings Accumulated depreciation on fixtures and fittings Vans Accumulated depreciation on vans Inventories at end of year Closing trade receivables Closing trade payables Bank balance (overdraft) Capital Profit for the year Loan Required (a) (b) € 150,000 (c) 40,000 4,000 20,000 2,000 12,000 10,000 2,000 240,000 € 3,000 You ascertain the following further information: A van costing €6,000 with accumulated depreciation of €600 was sold for €4,500 cash just before the year-end. This transaction has not yet been reflected in the company's books. 48,000 50,000 39,000 160,000 300,000 Produce two corrected trial balances for Jim, one before and one after incorporating adjustment for the note. Show workings using T accounts. Prepare a Statement of Financial Position for Jim's business at the end of its first year, using the Common European Format. Explain how the double-entry bookkeeping system works. In your answer include information about opening and balancing off accounts as well as details on recording different types of transactions.
Solution
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