Leaving Cert Accounting FINAL ACCOUNTS - Sole Trader: Final Accounts of a Sole Trader

Question

Final Accounts of a Sole Trader
The following balances were extracted from the books of M. O'Dea, a Sole Trader as at 31/12/2014:

€
Capital 01/01/2014 ......................................................................... 198,000
Drawings ......................................................................................... 10,700
Buildings ................................................................................. (cost €22,000)
Office equipment (cost €22,000) ............................................................ 23,000
Patents ........................................................................................... 24,000
Delivery vans at cost .................................................................... 14,000
Accumulated depreciation – delivery vans ..................................... 14,000
Stock 01/01/2014 ...................................................................... 485,000
Sales ............................................................................................. 485,000
Purchases ....................................................................................... 196,000
Returns outwards (purchases returns) ............................................ 5,300
Returns inwards (sales returns) .................................................... 17,000
Debtors ......................................................................................... 34,800
Discount received ........................................................................... 1,400
Wages & salaries ............................................................................ 16,000
General expenses .......................................................................... 13,600
Stationery ........................................................................................ 5,000
VAT – loan (received 01/04/2014) ...................................................... 50,000
Provision for bad debts ................................................................ 2,500
Advertising ..................................................................................... 7,500
Insurance ........................................................................................ 9,000
Loan interest paid ........................................................................... 4,200
Bank ............................................................................................... 4,620
PRSI/USC........................................................................................... 2,000
Profit/loss balance 01/01/2014 ....................................................... 65,000

€70,600 ....................................................................................... 870,600

You are given the following additional information:

(i) Stock for resale at 31/12/2014 was €19,000.
(ii) Stock of stationery on 31/12/2014 was €1,200.
(iii) Provision should be made for interest due on loan. The rate of interest is 6% per annum.
(iv) Wages/salaries are to be divided - 75% for employees/workers and 25% for drawings.
(v) Advertising is for the year ended 31/04/2015.
(vi) Depreciation is to be provided as follows:
- Buildings - 10% of cost
- Delivery vans - 10% of cost book value
- Office equipment - 20% of cost
(vii) Provision for bad debts is to be adjusted to 10% of debtors.

Final Accounts of a Sole Trader The following balances were extracted from the books of M - Leaving Cert Accounting - Question 1 - 2015

Worked Solution & Example Answer:Final Accounts of a Sole Trader The following balances were extracted from the books of M - Leaving Cert Accounting - Question 1 - 2015

Prepare a Balance Sheet at 31/12/2014.

Balance Sheet of M. O'Dea as at 31/12/2014

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