Tabular Statement
The following balance sheet shows the financial position of a sole trader, Ann Reddan, as on November 1st 2009 - Leaving Cert Accounting - Question 2 - 2010
Question 2
Tabular Statement
The following balance sheet shows the financial position of a sole trader, Ann Reddan, as on November 1st 2009.
Balance sheet as at November 1st ... show full transcript
Worked Solution & Example Answer:Tabular Statement
The following balance sheet shows the financial position of a sole trader, Ann Reddan, as on November 1st 2009 - Leaving Cert Accounting - Question 2 - 2010
Step 1
Nov 4 Received from a debtor a cheque for €630 in full settlement of a debt of €650.
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Answer
The debtor's account decreases by €650 and the bank increases by €630, reflecting the payment received. The loss of €20 will be recorded as a reduction in income.
Step 2
Nov 6 Paid off the buying expenses that were due at the beginning of the month.
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Answer
Expenses increase by €500, leading to a decrease in bank funds by €500.
Step 3
Nov 10 Purchased goods on credit for €3,700.
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Stock increases by €3,700, and creditors increase by €3,700 as it is a credit purchase.
Step 4
Nov 15 Received a cheque for €2,000 for repairs to private residence.
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Bank increases by €2,000, while the capital account increases reflecting the income generated.
Step 5
Nov 17 Paid cheque €2,100. A deposit of €3,000 was paid by cheque.
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Bank decreases by €2,100 while creditors decrease by €2,100. The remaining cash paid also reduces overall liquidity.
Step 6
Nov 19 A debtor who owed €900 was declared bankrupt and paid €50 in the euro by cheque.
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Debtors decrease by €900, reflecting the bad debt. The bank increases by €50 from the payment.
Step 7
Nov 24 Received €2,000 in cash for a debtor's account balance of €1,800 and then received discount of €100.
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Answer
Cash (bank) increases by €2,000, while debtors decrease by €1,800. The discount of €100 will also reduce income.
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