Photo AI
Incomplete Records – Control Accounts Mary O’Malley did not keep a full set of books during the year ended 31/12/2005 - Leaving Cert Accounting - Question 6 - 2006
Question 6
Incomplete Records – Control Accounts Mary O’Malley did not keep a full set of books during the year ended 31/12/2005. The following is a summary of the cash accoun... show full transcript
Worked Solution & Example Answer:Incomplete Records – Control Accounts Mary O’Malley did not keep a full set of books during the year ended 31/12/2005 - Leaving Cert Accounting - Question 6 - 2006
Step 1
Calculate O’Malley’s total purchases and total sales using control accounts.
Answer
To calculate O’Malley’s total purchases and total sales, we will set up Control Accounts for Creditors and Debtors.
Creditors Control Account
| Date | Details | Amount (€) | Balance (€) |
|---|---|---|---|
| 31 Dec 2005 | Cash paid | 25,200 | 6,400 |
| 1 Jan 2005 | Balance b/d | 32,500 | |
| Total Purchases | 32,500 | 32,500 |
Debtors Control Account
| Date | Details | Amount (€) | Balance (€) |
|---|---|---|---|
| 1 Jun 2005 | Balance b/d | 4,900 | 48,800 |
| 31 Dec 2005 | Cash | 48,200 | 5,200 |
| Total Sales | 144,500 | 144,500 |
Thus:
- Total Sales: €144,500
- Total Purchases: €54,600
Step 2
Prepare a Trading and Profit and Loss Account for the year ended 31/12/2005.
Answer
Below is the Trading and Profit and Loss Account for the year:
Trading and Profit and Loss Account for the year ended 31 December 2005
| Details | Amount (€) |
|---|---|
| Sales | 144,500 |
| Less: Cost of Goods Sold | |
| Opening Stock | 10,400 |
| Add: Purchases | 54,600 |
| Less: Closing Stock | 8,700 |
| Cost of Goods Sold | 56,300 |
| Gross Profit | 88,200 |
| Less: | |
| Wages and general expenses | 22,800 |
| Rates | 3,800 |
| Depreciation – Delivery Vans | 8,750 |
| Net Profit | 53,850 |
Step 3
Prepare a Balance Sheet on the 31/12/2005.
Answer
Here is the Balance Sheet as at 31 December 2005:
Balance Sheet at 31 December 2005
| Fixed Assets | Amount (€) | Current Assets | Amount (€) |
|---|---|---|---|
| Premises | 680,000 | Stock | 8,700 |
| Delivery Vans | 650,000 | Trade debtors | 45,500 |
| Furniture | 14,300 | ||
| Total Fixed Assets | 720,550 | Total Current Assets | 54,200 |
| Less: Creditors: amounts falling due within 1 year: | |||
|---|---|---|---|
| Trade creditors | 7,300 | ||
| Expenses due | 740 | ||
| Net Current Assets | |||
| Total Assets less current liabilities | 771,910 |
| Financed by: | | | | | Capital | | | | | Balance at 1 Jan 2005 | 726,090 | Add Net profit | 53,850 | | Capital Employed | 779,940 | | |