Tabular Statement
The following balance sheet shows the financial position of a sole trader, Brendan Boyle, as at 01/01/2016 - Leaving Cert Accounting - Question 4 - 2016
Question 4
Tabular Statement
The following balance sheet shows the financial position of a sole trader, Brendan Boyle, as at 01/01/2016.
Balance Sheet as at 01/01/2016
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Worked Solution & Example Answer:Tabular Statement
The following balance sheet shows the financial position of a sole trader, Brendan Boyle, as at 01/01/2016 - Leaving Cert Accounting - Question 4 - 2016
Step 1
Received from a debtor a cheque for €3,700 in full settlement of a debt of €3,900.
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Answer
Debtors decrease by €200 (from €28,000 to €27,800) and Bank increases by €3,700.
Step 2
Purchased goods on credit for €14,200.
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Answer
Stock increases by €14,200 and Creditors increase by €14,200.
Step 3
Paid by cheque rent that was due at the beginning of the month.
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Bank decreases by the rent amount (to be specified) affecting the total cash and liabilities.
Step 4
Paid, by cheque, a creditor’s account balance of €14,100 and received a discount of €300.
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Bank decreases by €13,800 and Creditors decrease by €14,100. Capital increases by €300 due to the discount.
Step 5
Sold goods on credit for €8,200, which originally cost €9,200.
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Debtors increase by €8,200 and Stock decreases by €9,200, affecting the Profit/Loss account.
Step 6
Paid a creditor who went €6000 was declared bankrupt and paid 30c in the €.
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Liabilities decrease by the portion payable (30% of €6,000) and Bank is reduced by the amount paid.
Step 7
Paid by cheque from business bank account €3,300 for roof repairs to private house.
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Bank decreases by €3,300, affecting both current assets and possibly liabilities if unpaid.
Step 8
Paid a negative balance for €17,000.
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Total liabilities increase and Bank decreases by €17,000.
Step 9
A deposit of €15,000 was paid by cheque and the remainder borrowed from Warehouse Finance Ltd.
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Bank increases by €15,000 and new liability is created to Warehouse Finance for the remainder.
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