Can you prepare and present a) statement of Financial performance( also knows as profit and loss) for the financial year ended 31 December 2020b) The statement of financial position.( also knows as balance sheet) as at 31 December 2020 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 thefinancial 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, ownerpaid 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 1April 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 usefullife 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 theasset 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 theyear and the balance was carried forward towards the next financial year.The business uses the straight-line method for depreciating its non-current assets. ASSETSNon-current assetsProperty, plant and equipmentLand3.130,000Equipment at costDepreciation10,0009.000139,000(1,000)Current assetsInventories6,0003,000200ReceivablesPrepaid expenses: WaterRates200Cash29.400168.40020.000Total assetsEquity and LiabilitiesEquityOriginal Capital (Owner's Capital)Retained profit120,00025.400 145,400LiabilitiesLong-term liabilitiesMortgage10,200Short-term liabilitiesTrade payablesAccrued expenses: RentTax payableTotal Equity and Liabilities2,5005009.80012.800168.400

Answered: statement of financial positio

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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Can you prepare and present

a) statement of Financial performance( also knows as profit and loss) for the financial year ended 31 December 2020

b) The statement of financial position.( also knows as balance sheet) as at 31 December 2020

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.

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

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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