Tag (SQ): Statement of Financial Position

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  • 15 Marks

FA – L1 – Q39 – Preparing financial statements of a sole trader

Prepare a trial balance, statement of profit or loss, and statement of financial position for an antique dealer based on given balances and transactions.

JOHNNY
Johnny is in business as an antique dealer. The trial balance of his business at 1 January 20X9 was as follows.

Dr GH₵(000) Cr GH₵(000)
Capital 5,000
Cash 4,200
Motor van 600
Trade payable – A 200
Trade receivable – B 300
Rates prepaid 100
5,200 5,200

Cash transactions during the period to 31 March 20X9 were

GH₵(000)
Purchases 2,000
Revenue 3,000
Drawings 500
Motor running expenses 350
Rates 250

At 31 March inventory was GH₵700,000 and rates paid in advance amounted to GH₵150,000.

Required
(a) Prepare the trial balance at 31 March 20X9.

(b) Prepare the statement of profit or loss for the period to 31 March 20X9 and a statement of financial position at that date.

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  • 12 Marks

FA – L1 – Q37 – Accruals and prepayments

Write up the insurance account for Vulcan's removal business for 20X9, including prepayments and multiple insurance payments.

Vulcan owns a removal business and runs a small fleet of vans. He prepares his accounts to 31 December each year.
The following transactions occur in relation to insurance for the year 20X9.
1 January: The amount prepaid for insurance was GH¢1,140,000.
1 April: He paid GH¢840,000 insurance for the year ended 31 March 20Y0 on six of the vans.
1 May: He paid GH¢3,540,000 insurance for twenty vans for the year ended 30 April 20Y0.
1 July: He paid GH¢560,000 insurance for the remaining vans for the year ended 30 June 20Y0.

Required:
Write up the insurance account for the year ended 31 December 20X9.

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  • 15 Marks

FA – L1 – Q23 – Non-current assets and depreciation

Prepare ledger accounts for lorries, disposals, and depreciation for Akosua Transport Limited for the year to 30 April 20X9.

Akosua Transport Limited is a haulage contractor. At 1 May 20X8 the company had three lorries, details of which are as follows:

Lorry registration number Date purchased Cost (GH¢000)
KWE 1 1 July 20X5 16,000
AMA 2 1 February 20X7 21,000
EFI 3 1 April 20X8 31,000

During the year to 30 April 20X9, the following lorry transactions took place:
(a) KWE 1 was sold on 31 July 20X8 for GH¢3 million on cash terms. On 1 August 20X8 Akosua Transport Limited replaced it with a new lorry, registration number NAA 4 for which he paid GH¢35 million in cash.
(b) On 1 December 20X8, the new lorry (NAA 4) was involved in a major accident, and as a result was completely written off. The company was able to agree a claim with his insurance company, and on 31 December 20X8 he received GH¢30 million from the insurance company. On 1 January 20X9 he bought another lorry (registration number KOF 5) for GH¢41 million.
(c) During March 20X9, the company decided to replace the lorry bought on 1 April 20X8 (registration number EFI 3) with a new lorry. It was delivered on 1 April 20X9 (registration number ADU 6). The company agreed a purchase price of GH¢26 million for the new lorry, the terms of which were GH¢20 million in part-exchange for the old lorry and the balance to be paid immediately in cash.

Notes:
(1) Akosua Transport Limited uses the straight-line method of depreciation.
(2) The lorries are depreciated over a five-year period by which time they are assumed to have an exchange value of GH¢1 million each.
(3) A full year’s depreciation is charged in the year of acquisition, but no depreciation is charged if a lorry is bought and sold or otherwise disposed of within the same financial year.
(4) Akosua Transport Limited does not keep separate ledger accounts for each individual lorry.

Required
(a) Write up the following accounts for the year to 30 April 20X9:
(i) lorries account
(ii) lorries disposal account
(iii) allowance for depreciation on lorries account.

(b) Show how the lorries account and the allowance for depreciation account would be presented in Akosua Transport Limited’s statement of financial position as at 30 April 20X9.

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  • 10 Marks

FA – L1 – Q13 – Preparing financial statements of a sole trader

Prepare a statement of profit or loss and financial position for Worthe's business for the year ended 30 June 20X9 using the given trial balance and inventory data.

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.

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  • 12 Marks

FA – L1 – Q11 – Preparing financial statements of a sole trader

Prepare statement of profit or loss and financial position for Blake's business for 20X9 using trial balance and inventory data.

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.

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  • 6 Marks

FA – L1 – Q9 – Preparing financial statements of a sole trader

Prepare profit or loss statement and financial position for Kwame's business for the year ended 31 December.

The following information is available for Kwame’s business for the year ended 31 December. He started his business on 1 January.

GH¢’000
Trade payables 1,206
Trade receivables 3,166
Purchases 23,803
Revenue 28,794
Motor van 5,500
Drawings 2,400
Insurance 105
General expenses 506
Rent and rates 854
Salaries 3,164
Inventory at 31 December 4,166
Sales returns 50
Cash at bank 3,847
Cash in hand 100
Capital introduced 65,900

Required:
Prepare a statement of profit or loss for the year ended 31 December and a statement of financial position at that date.

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