Tabular Statement
The following balance sheet shows the financial position of a sole trader, Hugh Brennan, as at 01/01/2020:
Balance Sheet as at 01/01/2020:
Fixed Assets
€
Buildings 480,000
Machinery 120,000
600,000
Current Assets
Stock 43,000
Debtors 39,000
Bank 47,500
129,500
Less Creditors: amounts falling due within 1 year
Trade creditors (26,500)
Expenses due (4,000)
(30,500)
Working capital 99,000
Total net assets: 699,000
Financed by:
Capital 685,000
Profit and loss balance 14,000
Capital employed 699,000
The following transactions took place during January 2020:
Jan 2 Paid by cheque expenses that were due at the beginning of the month - Leaving Cert Accounting - Question 3 - 2020
Question 3
Tabular Statement
The following balance sheet shows the financial position of a sole trader, Hugh Brennan, as at 01/01/2020:
Balance Sheet as at 01/01/2020:
Fixed... show full transcript
Worked Solution & Example Answer:Tabular Statement
The following balance sheet shows the financial position of a sole trader, Hugh Brennan, as at 01/01/2020:
Balance Sheet as at 01/01/2020:
Fixed Assets
€
Buildings 480,000
Machinery 120,000
600,000
Current Assets
Stock 43,000
Debtors 39,000
Bank 47,500
129,500
Less Creditors: amounts falling due within 1 year
Trade creditors (26,500)
Expenses due (4,000)
(30,500)
Working capital 99,000
Total net assets: 699,000
Financed by:
Capital 685,000
Profit and loss balance 14,000
Capital employed 699,000
The following transactions took place during January 2020:
Jan 2 Paid by cheque expenses that were due at the beginning of the month - Leaving Cert Accounting - Question 3 - 2020
Step 1
Jan 2: Paid by cheque expenses that were due at the beginning of the month.
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Answer
This transaction decreases the Bank by €4,000 and decreases the Expenses by the same amount.
Step 2
Jan 5: Purchased goods on credit for €15,600.
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This increases the Stock by €15,600 and increases the Trade Creditors by €15,600.
Step 3
Jan 13: Received a payment from a debtor by cheque for €4,300 in full settlement of a debt of €4,500.
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This decreases the Debtors by €4,500 but increases the Bank by €4,300, noting a loss of €200 in the Profit and Loss.
Step 4
Jan 15: Paid, by cheque, a creditor's account balance of €5,900 and received a discount of €500.
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This decreases the Bank by €5,400 and Trade Creditors by €5,900, leading to a gain of €500 recorded in Profit and Loss.
Step 5
Jan 18: Purchased new machinery for €12,000, which originally cost €11,700.
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This increases the Machinery by €12,000 and Trade Creditors by €12,000.
Step 6
Jan 21: Purchased new machinery for €140,000. A deposit of €25,000 was paid by cheque and the remainder borrowed from Fast Finance Ltd.
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Answer
This increases the Machinery by €140,000, decreases the Bank by €25,000, and increases the Trade Creditors by €115,000.
Step 7
Jan 25: Paid by cheque from business bank account €3,700 for repairs to private residence.
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This decreases the Bank by €3,700 and increases the Drawings.
Step 8
Jan 28: Paid a debt owed to a debtor who owed €800 was declared bankrupt and paid 30c in the €.
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Answer
This results in a loss of €560 recorded in the Profit and Loss, affecting the Bank and reducing Debtors by €240.
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