- 10 Marks
FA – L1 – Q13 – Preparing financial statements of a sole trader
Question
The following is a trial balance for Worthe after his first year’s trading. You are required to prepare a statement of profit or loss for the year ended 30 June 20X9 and a statement of financial position as at that date.
Worthe – Trial balance as at 30 June 20X9
| DR GH₵(000) | CR GH₵(000) | |
|---|---|---|
| Sales | 28,794 | |
| Purchases | 23,803 | |
| Rent | 854 | |
| Lighting and heating expenses | 422 | |
| Salaries and wages | 3,164 | |
| Insurance | 105 | |
| Land and buildings | 50,000 | |
| Fixtures and fittings | 1,000 | |
| Receivables | 3,166 | |
| Sundry expenses | 506 | |
| Payables | 1,206 | |
| Cash at bank | 3,847 | |
| Drawings | 2,400 | |
| Motor vans | 5,500 | |
| Motor running expenses | 1,133 | |
| Capital | 65,900 | |
| Total | 95,900 | 95,900 |
Inventory at 30 June 20X9 was GH₵4,166,000.
Answer
Worthe: Statement of profit or loss for the year ended 30 June 20X9
| GH₵(000) | GH₵(000) | |
|---|---|---|
| Sales | 28,794 | |
| Opening inventory | 0 | |
| Purchases | 23,803 | |
| 23,803 | ||
| Less: Closing inventory | (4,166) | |
| Cost of sales | (19,637) | |
| Gross profit | 9,157 | |
| Salaries and wages | 3,164 | |
| Rent | 854 | |
| Insurance | 105 | |
| Lighting and heating expenses | 422 | |
| Sundry expenses | 506 | |
| Motor running expenses | 1,133 | |
| (6,184) | ||
| Net profit | 2,973 |
Worthe: Statement of financial position as at 30 June 20X9
| GH₵(000) | GH₵(000) | |
|---|---|---|
| Non-current assets | ||
| Land and buildings | 50,000 | |
| Fixtures and fittings | 1,000 | |
| Motor vans | 5,500 | |
| 56,500 | ||
| Current assets | ||
| Inventory | 4,166 | |
| Receivables | 3,166 | |
| Cash at bank | 3,847 | |
| 11,179 | ||
| Total assets | 67,679 | |
| Capital and liabilities | ||
| Capital | 65,900 | |
| Add: Net profit | 2,973 | |
| 68,873 | ||
| Less: Drawings | (2,400) | |
| 66,473 | ||
| Current liabilities | ||
| Payables | 1,206 | |
| Total capital and liabilities | 67,679 |
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