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statement of financial positio

statement of financial positio

Financial Reporting, Financial Statement Analysis and Valuation
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter8: Investing Activities
Section: Chapter Questions
Problem 1.3AIC: Estimate the average total estimated useful life of depreciable property, plant, and equipment....
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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.
Transcribed Image Text: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
Transcribed Image Text: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
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