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Final Accounts of a Sole Trader The following balances were extracted from the books of Michael O'Reilly, a sole trader as at 31/12/2017: Buildings €400,000 Delivery vans at cost €64,000 Accumulated depreciation – delivery vans €12,000 Office equipment (cost €20,000) €10,000 Patents €24,000 Capital 01/01/2017 €202,000 Drawings €12,200 Stock 01/01/2017 €27,000 Sales €583,000 Purchases €192,000 Returns outward (purchases returns) €5,100 Sales returns €13,000 Creditors €36,200 Debtors €22,400 Discount received €1,300 Wages and salaries €108,000 General expenses €12,500 VAT €15,300 Stationery €4,200 Term loan (received 01/04/2017) €60,000 Loan interest paid €1,500 PRSI/USC €9,600 Insurance €8,200 Provision for bad debts €4,000 Bank €46,500 Advertising €5,000 Profit/loss balance 01/01/2017 €51,400 You are given the following additional information: (i) Stock for resale at 31/12/2017 was €21,000 - Leaving Cert Accounting - Question 1 - 2018

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Final-Accounts-of-a-Sole-Trader--The-following-balances-were-extracted-from-the-books-of-Michael-O'Reilly,-a-sole-trader-as-at-31/12/2017:--Buildings-€400,000-Delivery-vans-at-cost-€64,000-Accumulated-depreciation-–-delivery-vans-€12,000-Office-equipment-(cost-€20,000)-€10,000-Patents-€24,000-Capital-01/01/2017-€202,000-Drawings-€12,200-Stock-01/01/2017-€27,000-Sales-€583,000-Purchases-€192,000-Returns-outward-(purchases-returns)-€5,100-Sales-returns-€13,000-Creditors-€36,200-Debtors-€22,400-Discount-received-€1,300-Wages-and-salaries-€108,000-General-expenses-€12,500-VAT-€15,300-Stationery-€4,200-Term-loan-(received-01/04/2017)-€60,000-Loan-interest-paid-€1,500-PRSI/USC-€9,600-Insurance-€8,200-Provision-for-bad-debts-€4,000-Bank-€46,500-Advertising-€5,000-Profit/loss-balance-01/01/2017-€51,400--You-are-given-the-following-additional-information:--(i)-Stock-for-resale-at-31/12/2017-was-€21,000-Leaving Cert Accounting-Question 1-2018.png

Final Accounts of a Sole Trader The following balances were extracted from the books of Michael O'Reilly, a sole trader as at 31/12/2017: Buildings €400,000 Delive... show full transcript

Worked Solution & Example Answer:Final Accounts of a Sole Trader The following balances were extracted from the books of Michael O'Reilly, a sole trader as at 31/12/2017: Buildings €400,000 Delivery vans at cost €64,000 Accumulated depreciation – delivery vans €12,000 Office equipment (cost €20,000) €10,000 Patents €24,000 Capital 01/01/2017 €202,000 Drawings €12,200 Stock 01/01/2017 €27,000 Sales €583,000 Purchases €192,000 Returns outward (purchases returns) €5,100 Sales returns €13,000 Creditors €36,200 Debtors €22,400 Discount received €1,300 Wages and salaries €108,000 General expenses €12,500 VAT €15,300 Stationery €4,200 Term loan (received 01/04/2017) €60,000 Loan interest paid €1,500 PRSI/USC €9,600 Insurance €8,200 Provision for bad debts €4,000 Bank €46,500 Advertising €5,000 Profit/loss balance 01/01/2017 €51,400 You are given the following additional information: (i) Stock for resale at 31/12/2017 was €21,000 - Leaving Cert Accounting - Question 1 - 2018

Step 1

Prepare a balance sheet as at 31/12/2017

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Answer

Balance Sheet of Michael O'Reilly as at 31/12/2017

Assets

Intangible Assets

  • Patents: €24,000

Fixed Assets

  • Buildings: €392,000
  • Office Equipment: €6,000
  • Delivery Vans: €46,800
    Total Fixed Assets: €468,800

Current Assets

  • Closing Stock: €21,000
  • Stock of Stationery: €1,300
  • Debtors: €22,400
  • Less Bad Debt Provision: €1,120
  • Bank: €46,500
  • Advertising Prepaid: €1,800
    Total Current Assets: €51,920

Total Assets: €520,720

Liabilities

Creditors: amounts falling due within 1 year

  • Creditors: €22,400
  • VAT: €15,300
  • Loan Interest: €4,800
  • PRSI/USC: €9,600
    Total Current Liabilities: €52,100

Financed by

  • Loan (amount falling due after 1 year): €60,000
  • Capital: €202,000
  • Profit and Loss Balance: €275,490
  • Less Drawings: €13,100

Total Liabilities: €520,720

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