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    18.preparation of Financial Statements For Sole Traders

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    18.preparation of Financial Statements For Sole Traders

    Uploaded by

    Nanda Priya
    63 views5 pages

    Original Title

    18.Preparation of Financial Statements for Sole Traders (1)

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    63 views5 pages

    18.preparation of Financial Statements For Sole Traders

    Uploaded by

    Nanda Priya

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 5

    ACCA F3

    Financial Accounting (FA)


    Preparation of Financial
    Statement for Sole Traders
    Learning example

    You have been given the information below and asked


    to prepare the accounts of Mugg for the year ended 31
    December 20x7.

    Trial balance as at 31 December 20x7.


    Dr ($) Cr ($)
    Capital account at 1 January 20x7 2,377
    Preparation of Financial t for
    Rent 500
    Statemen
    Trader Sole
    Inventories 1 January 20x7 510
    Electricity
    s 240
    Insurance 120
    Wage 1,634
    Trade receivables 672
    Sales 15,542
    Repairs 635
    Purchases 9,876
    Discounts received 129
    Drawings 1,200
    Petty cash 5
    Bank 762
    Motor vehicles at cost 1,740
    Furniture and fixtures at cost 830
    Accumulated depreciation at 1 January 20x7
    ----- Motor vehicles 435
    ----- Furniture and fixtures 166
    Travel and entertaining 192
    Trade payables 700
    Suspense account 433
    ACCAspace 中国 ACCA 特许公认会计师教育平台 19,349 m
    t © ACCAspace.co 5
    19,349
    The following information is also available:

    1. Closing inventories, valued at cost, amounts to $647;

    2. Mugg has drawn $10 a month and these drawings have been
    charged to wages;

    3. Depreciation is to be provided at 25% on cost on motor vehicles,


    and 20% on cost on furniture and fixtures;

    4. Irrecoverable debts totaling $37 are to be written off;

    5. $180 received from a credit customer was correctly entered in the


    trade receivables account and credited to the bank account;

    6. Mugg has taken goods from inventories for his own use. When
    purchased by his business these goods cost $63 and they
    would have been sold for $91.
    7. The annual rental of the business premises is $600, and
    $180 paid for electricity in August 20x7 covers the 12
    months to 30 June 20x8.

    8. Discounts allowed of $73 have only been recorded in


    the trade receivables account.

    Required

    A. Prepare journal entries to record items (1) – (8).

    B. Clear the suspense account.

    C. Produce a statement of profit or loss for the year ended


    31 December 20x7 and a statement of financial position
    as at that date.

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