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 L. Bradley, a Sole Trader, on 31/12/2011.

Buildings at cost .......................................................................... €240,000
Motor Vehicles at cost ................................................................. €180,000
Office Equipment at cost ............................................................ €45,000
Patents ........................................................................................ €45,000
Accumulated Depreciation – Motor Vehicles ........................ €48,000
Accumulated Depreciation – Office Equipment .................... €7,100
Capital 01/01/2011 .................................................................... €1,104,900
Sales ........................................................................................... €570,000

Purchases .................................................................................. €320,000
Carriage Inwards ...................................................................... €3,200
Returns Inwards (Sales Returns) ............................................ €8,580
Returns Outwards (Purchases Returns) ...................... €58,500
Creditors .................................................................................... €96,000
Wages/Salaries ......................................................................... €63,700
Selected Receipts .................................................................... €2,700
Commission .............................................................................. €3,000
Term Loan (received 01/04/2011) ......................................... €100,000
Loan Interest paid .................................................................... €3,000
Drawings .................................................................................... €16,500
Bank ............................................................................................. €14,000
VAT ............................................................................................. €3,100
PRSI ............................................................................................. €2,500
Provision for Bad Debts .............................................................. €9,400
Provision for Bad Debts Balance 01/01/2011 ................ €2,300
Profit/Loss Balance 01/01/2011 ............................................ €1,104,900

You are given the following additional information:

(i) Stocks for resale at 31/12/2011 were €31,000.
(ii) Stock of Stationery on 31/12/2011 was €600.
(iii) Provision should be made for Interest due on Loan. The rate of interest is 10% per annum.
(iv) Advertising is for the year ended 31/03/2012.
(v) Provision for bad debts to be adjusted to 5% of debtors.
(vi) Depreciation is to be provided as follows:
- Motor Vehicles 20% of cost.
(vii) Included in Insurance is a cheque for €800, which is for L. Bradley’s private house insurance.

Required:
(a) Prepare a Trading and Profit and Loss Account for the year ended 31/12/2011. (80)
(b) Prepare a Balance Sheet as at 31/12/2011. (40)

Final Accounts of a Sole Trader The following balances were extracted from the books of L - Leaving Cert Accounting - Question 1 - 2012

Worked Solution & Example Answer:Final Accounts of a Sole Trader The following balances were extracted from the books of L - Leaving Cert Accounting - Question 1 - 2012

Prepare a Trading and Profit and Loss Account for the year ended 31/12/2011.

Trading, Profit and Loss Account for the year ended 31/12/2011

Sales

Cost of Sales

Gross Profit

Expenses

Total Expenses

Operating Profit

Other Income

Net Profit

Prepare a Balance Sheet as at 31/12/2011.

Balance Sheet of L. Bradley as at 31/12/2011

Fixed Assets

Current Assets

Creditors: amounts falling due within 1 year

Financed By:

Balance Sheet Total

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