3.1. Preparation of financial statements
A subsection of Accounting, 9706, through 3. Financial accounting (A Level)
Listing 10 of 678 questions
Reece, a sole trader, does not maintain a full set of accounting records. He has provided the following information for the year ended 30 June 2022. 30 June 2022 1 July 2021 $ $ Cash Electricity accrued Inventory 21 400 23 600 Machinery Cost ? 18 480 Accumulated depreciation ? 9 685 Rent paid in advance 1 100 Trade payables 8 520 6 285 Trade receivables 20 620 23 580 Bank account summary Receipts $ Payments $ Balance b/d 1 860 Credit suppliers 80 140 Credit customers 149 810 Rent 12 250 Cash sales banked 7 170 Wages 36 240 Sale of machinery 4 000 Electricity 3 680 General expenses 18 590 New machinery 9 200 Balance c/d 2 740 162 840 162 840 The following information is also available. Total cash sales for the year were $15 280. Reece had also paid cash for wages during the year but had not recorded this. Reece took $450 per month drawings before the cash sales were banked. He had also taken goods for his own use with a selling price of $350 after a mark-up of 25%. During the year, machinery that had cost $6000 on 1 July 2019 was sold. Machinery is to be depreciated at 15% per annum using the reducing balance method. A full year’s depreciation is charged in the year of purchase, but none in the year of disposal. REQUIRED Calculate the total credit sales for the year ended 30 June 2022. Calculate the total credit purchases for the year ended 30 June 2022. Calculate the total cash paid for wages during the year ended 30 June 2022. Calculate the depreciation charge for the year ended 30 June 2022. Additional information Inventory at 30 June 2022 included damaged goods which had cost $1800, but needed repairs costing $350. The goods could then be sold for 30% less than the normal selling price of $2250. REQUIRED Prepare the income statement for the year ended 30 June 2022. Reece Income statement for the year ended 30 June 2022 Workings: State two causes of depreciation of non-current assets. Explain, with reference to an accounting concept in each case, why: a business should make a provision for depreciation of non-current assets Accounting concept Explanation a business should make an adjustment for damaged inventory. Accounting concept Explanation Additional information Reece has been thinking of maintaining a full set of accounting records. REQUIRED Advise Reece whether or not he should maintain a full set of accounting records. Justify your answer.
9706_w22_qp_23
THEORY
2022
Paper 2, Variant 3
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The purchases ledger control account showed a balance of $79 500 before the following errors were taken into account. A contra of $5300 between the purchases and sales ledger control accounts had been omitted. Cash purchases of $1200 made on the last day of the period had not been recorded. The discount received column in the cash book had been overcast by $6200. The returns inwards journal had been undercast by $1500. Which figure for trade payables should be included in the statement of financial position?
9706_w23_qp_11
MCQ
2023
Paper 1, Variant 1
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The owner of a trading business prepared draft financial statements for the year ended 31 December. It was then discovered that the following transactions occurring during the year had not been recorded. A cheque for $500 had been received for commission earned. Cash amounting to $2900 was received for a sale of goods which had cost $3000. Inventory costing $5000 had been taken from the business by the owner for personal use. Non-current assets with a carrying value of $6500 had been sold for $7000 cash. Which transactions will affect both the gross profit for the year and the total value of net assets on the statement of financial position?
9706_w23_qp_12
MCQ
2023
Paper 1, Variant 2
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A business adds a mark-up of 25% to all goods sold. The following information is available for the year ended 30 June. $ receipts from credit customers 284 300 opening trade receivables 22 100 closing trade receivables 26 500 cash used for business expenses and drawings 52 400 discount allowed to credit customers 1 200 closing cash balance Receipts from cash sales were used to pay business expenses and drawings. Any remaining cash was placed in the cash account. The opening cash balance was nil. What was the value of total sales for the year?
9706_w23_qp_13
MCQ
2023
Paper 1, Variant 3
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Questions Discovered
678