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Prepare a statement of Capital of the Fahy family tourism business on 01/01/2017 - Leaving Cert Accounting - Question 7(a) - 2018

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Question 7(a)

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Prepare a statement of Capital of the Fahy family tourism business on 01/01/2017. Assets - Bed and breakfast premises €520,000 - Holiday home €94,000 - Equipment an... show full transcript

Worked Solution & Example Answer:Prepare a statement of Capital of the Fahy family tourism business on 01/01/2017 - Leaving Cert Accounting - Question 7(a) - 2018

Step 1

Assets Calculation

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Answer

List all the assets and their values:

  • Bed and breakfast premises: €520,000
  • Holiday home: €94,000
  • Equipment and linen: €5,500
  • Bicycles: €6,400
  • Cash: €4,500
  • Stock of fuel and heating oil: €2,000
  • Advance deposits (from tourists): €1,500

Total Assets = €520,000 + €94,000 + €5,500 + €6,400 + €4,500 + €2,000 + €1,500 = €632,900

Step 2

Liabilities Calculation

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Answer

There are no stated liabilities for the business in this scenario.

Step 3

Capital Statement

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Answer

The Capital is calculated as:

Capital = Total Assets - Total Liabilities

Given that Total Liabilities = 0:

Capital = €632,900 - 0 = €632,900

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