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.
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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
Question
Help with part (b)
Thanks.
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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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
by Bartleby ExpertFollow-up Question
Help with part (C)
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
by Bartleby ExpertKnowledge Booster
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