Janet Wilson has run a furniture business for many years, but has never kept adequate accounting records. However, a need to obtain a loan for the expansion of the business has necessitated the preparation of the final acco
Janet Wilson has run a furniture business for many years, but has never kept adequate
accounting records. However, a need to obtain a loan for the expansion of the business has
necessitated the preparation of the
is seeking your help in the preparation of the statements.
1. Janet is able to provide you with the following information about her financial position
at January 1, 2020: inventory of furniture $21,420; Trade
Trade accounts payable $18,196; Buildings $25,200; Fixtures and Fittings $23,400,
building expenses owing $4864, insurance prepaid $ 4,000, bank $8,840
2. Cheques drawn during the year were estimated as follows:
Trade payables
Electricity
Telephone
Rent
Advertising & Promotion
Fixtures and Fittings
Insurance
Building expenses
54,843
12,180
11,220
15,500
13,360
15,600
12,392
14,732
2020/2021 - Semester 2
Financial Accounting I
3. All cash and cheques received were paid into the bank account immediately. Janet
estimates the following receipts for the year
- Cheque received from trade receivables $194,500
- Cash Sales $ 32,700
4.
at 10 % per annum.
5. At December 31, 2020, building expenses owing was $4,582, and insurance paid in
advance was $5,354.
6. Included in the amount paid for Fixtures and fittings were:
A table bought for $2,600, which Janet resold during the year at cost, some wooden
shelving (cost $1,500), which Janet used in building an extension to her personal garage.
7. Cheque written for personal use during the year amounted to $43,000
8. Other balances at 31 December 31, 2020 were:
$
Trade accounts receivable 23,042
Trade accounts payable 19,890
Inventory of furniture 28,126
Required:
A. Prepare the following for the year ended 31 December 2020
i. Statement of Affairs as at January 1, 2020 (5 marks)
ii. Bank Account (7 marks)
iii. Accounts payable and Accounts receivable accounts (14 marks)
iv. Income Statement (20 marks)
v.
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 6 images
