Question 1 On 1 April 2020 Gandalf started a business with capital of $20,000 which he paid into a business account. The following is a summary of the cash transactions for the first year: Amounts from customers Salary of assistant Cash paid to suppliers for purchases Purchase of motor van on 31 March 2021 Gandalf's drawings during the year Electricity payments Rent for the year Postage and stationery The following further information is relevant: (1) (2) (3) (4) $ 34,628 4,000 20,700 8,000 4,800 1,120 2,200 700 At the end of the year Gandalf was owed $8,512 by his customers and owed $11,344 to his suppliers. Gandalf promised his assistant a bonus of $800. At 31 March 2021 this had not been paid. At 31 March 2021 there was inventory of $8,514 and Gandalf owed $340 for electricity for the last quarter of the year. As the van was acquired in the last day of March, Gandalf has decided not to charge any depreciation for the year. Required: Prepare a statement of profit or loss for the year ended 31 March 2021 and a statement of financial position at that date.

Question 1 On 1 April 2020 Gandalf started a business with capital of $20,000 which he paid into a business account. The following is a summary of the cash transactions for the first year: Amounts from customers Salary of assistant Cash paid to suppliers for purchases Purchase of motor van on 31 March 2021 Gandalf's drawings during the year Electricity payments Rent for the year Postage and stationery The following further information is relevant: (1) (2) (3) (4) $ 34,628 4,000 20,700 8,000 4,800 1,120 2,200 700 At the end of the year Gandalf was owed $8,512 by his customers and owed $11,344 to his suppliers. Gandalf promised his assistant a bonus of $800. At 31 March 2021 this had not been paid. At 31 March 2021 there was inventory of $8,514 and Gandalf owed $340 for electricity for the last quarter of the year. As the van was acquired in the last day of March, Gandalf has decided not to charge any depreciation for the year. Required: Prepare a statement of profit or loss for the year ended 31 March 2021 and a statement of financial position at that date.

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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