Leaving Cert Accounting Tabular Statements: The financial position of Yeats

Question

The financial position of Yeats Ltd on 1/1/2008 is shown in the following balance sheet:

Balance sheet as at 1/1/2008

|               | Cost €       | Dep. €   | Net €         |
|---------------|--------------|----------|---------------|
| Fixed Assets  |              |          |               |
| Goodwill      | (cost €45,000)   |          | 35,000        |
| Land & bulb   | 660,000      | 32,000   | 628,000       |
| Delivery vans | 80,000       | 42,000   | 38,000        |
|               |              |          | 701,000       |
| Current Assets |             |          |               |
| Stock         | 88,700       |          | 88,700        |
| Insurance prepaid | 1,400   |          | 1,400         |
| Debtors       | 57,100       |          | 57,100        |
| Less Creditors: amount falling due within 1 year |  |          |  |
| Creditors     | 79,600       |          | 79,600        |
| Bank          | 14,300       | 97,400   | 49,800        |
| Wages due     | 3,500        |          | 3,500         |
|               |              |          | 720,000       |
| Financed by   |              |          |               |
| Capital and Reserves |        |          |               |
| Authorised    | 500,000 ordinary shares @ €1 each   |     | 500,000     |
| Issued        | 500,000 ordinary shares @ €1 each     |   | 100,000     |
| Share premium  |               |          | 740,000       |
| Profit and loss balance |     |          | 740,000       |

The following transactions took place during 2008:

Jan
Yeats Ltd bought an adjoining business on 1/1/2008 which included buildings €260,000, delivery van €25,000 and creditors €8,000. The purchase price was discharged by granting the seller 250,000 shares in Yeats Ltd at a premium 20 per share.

Feb
A creditor who was owed €8,800 by Yeats Ltd accepted a delivery van, the book value of which was €9,000, in full settlement of the debt. This delivery van had cost €11,000.

March
Received a bank statement on 1 March showing a direct debit of €69,600 to cover fire insurance for year end 28/2/2009 and a credit transfer received of €7,700 to cover 11 months rent received in advance from March 1.

April
Yeats Ltd decided to re-value the land and buildings on 1/4/2008 at €970,000. The land element of the new value is €140,000.

July
A delivery van, which cost €15,000, was traded in against a new van costing €24,000. An allowance of €4,500 was made for the old van. Depreciation on the old van was €12,000.

Aug
An allowance of €1,500 was made for J. O'Brien, a debtor, whose debts became irrecoverable and who now refuses to trade with Yeats Ltd again. This represents 7.5% of the debts or 70% of the debts that were due to Yeats Ltd as at the end of the debt in January 2009. The new van was valued at €60,000 with depreciation of 2.5%.

Dec
The depreciation on buildings is charged at the rate of 2% per annum as of 1/4/2008. The impairment charge for the year on delivery vans was €25,400.

You are required to:

Record on a tabular statement the effect of the above transactions and the relevant asset and liability and return to total assets and liabilities on 31/12/2008.

Month	Event Description	Total (€)
January	Adjoining business purchased, including various assets	+260,000
February	Creditor accepts delivery van in settlement	-8,800
March	Received credit transfer for rent	+7,700
April	Re-valued land and buildings to new amount	+970,000
July	Trade-in of delivery van and depreciation	-12,000
August	Allowance made for irrecoverable debts (7.5% of debts due)	-1,500
December	Depreciation charge for buildings and delivery vans	-25,400
Total		1,155,100

Total Assets as of 31/12/2008	Total (€)
Fixed Assets	628,000 + 970,000 - 25,400 = 1,572,600
Current Assets	88,700 + 1,400 + 57,100 - 79,600 + 14,300 + 3,500 = 1,077,600
Total Liabilities	(79,600 + 3,500) = (83,100)
Total Assets	1,572,600 + 1,077,600 + 83,100 = 2,544,200

The financial position of Yeats Ltd on 1/1/2008 is shown in the following balance sheet: Balance sheet as at 1/1/2008 | | Cost € | Dep - Leaving Cert Accounting - Question 2 - 2019

Worked Solution & Example Answer:The financial position of Yeats Ltd on 1/1/2008 is shown in the following balance sheet: Balance sheet as at 1/1/2008 | | Cost € | Dep - Leaving Cert Accounting - Question 2 - 2019

Record Assets as of 1/1/2008

Record Transactions for Each Month

Calculate Total Assets and Liabilities as of 31/12/2008

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Asset	Cost (€)	Depreciation (€)	Net (€)
Fixed Assets
Goodwill	45,000	-	35,000
Land and Buildings	660,000	32,000	628,000
Delivery Vans	80,000	42,000	38,000
Current Assets
Stock	88,700	-	88,700
Insurance Prepaid	1,400	-	1,400
Debtors	57,100	-	57,100
Less: Creditors	(79,600)	-	(79,600)
Bank	14,300	97,400	49,800
Wages Due	3,500	-	3,500
Total			720,000