- 12 Marks
FA – L1 – Q11 – Preparing financial statements of a sole trader
Question
Using the following information, prepare the statement of profit or loss for Blake for the year ended 31 December 20X9 and a statement of financial position as at that date.
Blake – Trial balance as at 31 December 20X9
| Debit GH₵ | Credit GH₵ | |
|---|---|---|
| Purchases | 54,261 | |
| Sales | 135,650 | |
| Sales returns | 50 | |
| Purchase returns | 61 | |
| Carriage inwards (delivery cost of purchases) | 100 | |
| Carriage outwards (cost of deliveries to customers) | 150 | |
| Inventory – 1 January 20X9 | 7,500 | |
| Wages and salaries | 8,900 | |
| Rent | 4,500 | |
| Telephone | 560 | |
| Heat and lighting | 890 | |
| Motor van running expenses | 1,250 | |
| Bank interest | 534 | |
| Land and buildings | 60,000 | |
| Motor van | 5,000 | |
| Payables | 5,900 | |
| Bank overdraft | 6,500 | |
| Receivables | 8,700 | |
| Cash in hand | 150 | |
| Drawings | 15,000 | |
| Capital | 19,434 | |
| Total | 167,545 | 167,545 |
Inventory at 31 December 20X9 was GH₵9,500.
Required
Prepare the statement of profit or loss for the year ended 31 December 20X9 and a statement of financial position as at that date.
Answer
Blake: Statement of profit or loss for the year ended 31 December 20X9
| GH₵ | GH₵ | |
|---|---|---|
| Revenue | 135,650 | |
| Less: Sales returns | (50) | |
| Net revenue | 135,600 | |
| Opening inventory | 7,500 | |
| Purchases | 54,261 | |
| Carriage inwards | 100 | |
| 61,861 | ||
| Less: Purchase returns | (61) | |
| 61,800 | ||
| Less: Closing inventory | (9,500) | |
| Cost of sales | (52,300) | |
| Gross profit | 83,300 | |
| Wages and salaries | 8,900 | |
| Rent | 4,500 | |
| Telephone | 560 | |
| Heat and lighting | 890 | |
| Motor van running expenses | 1,250 | |
| Bank interest | 534 | |
| Carriage outwards | 150 | |
| (16,834) | ||
| Net profit | 66,466 |
Blake: Statement of financial position as at 31 December 20X9
| GH₵ | GH₵ | |
|---|---|---|
| Non-current assets | ||
| Land and buildings | 60,000 | |
| Motor van | 5,000 | |
| 65,000 | ||
| Current assets | ||
| Inventory | 9,500 | |
| Receivables | 8,700 | |
| Cash in hand | 150 | |
| 18,350 | ||
| Total assets | 83,350 | |
| Capital and liabilities | ||
| Capital account | ||
| Capital at 1 January 20X9 | 19,434 | |
| Add: Net profit for the period | 66,466 | |
| 85,900 | ||
| Less: Drawings | (15,000) | |
| Total capital | 70,900 | |
| Current liabilities | ||
| Payables | 5,900 | |
| Bank overdraft | 6,500 | |
| 12,400 | ||
| Total capital and liabilities | 83,350 |
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