5. Preparation of financial statements
A section of Accounting, 7707
Listing 10 of 227 questions
Stalla started trading on 1 April 2021. All receipts are paid into the bank and all payments are made from the bank. She has not kept a full set of books but has provided the following information. Summary of receipts and payments for the year ended 31 March 2022 $ Receipts Capital introduced 8 000 Loan received (repayable 2027) 5 000 Sales (all cash) 36 000 Payments Trade payables 17 850 Fixtures and fittings 12 000 General expenses 1 920 Rent and insurance 7 100 Drawings ? Bank balance at 31 March 2022 2 330 REQUIRED Record the total receipts and total payments to Stalla’s bank account showing the cash drawings for the year ended 31 March 2022. Balance the bank account and bring the balance down on 1 April 2022. Stalla Bank account Date Details $ Date Details $ During the year ended 31 March 2022, Stalla took goods from the business for her own personal use. The selling price of these goods is $3375. Her mark-up is 25%. REQUIRED Calculate Stalla’s total drawings for the year ended 31 March 2022. Stalla has provided a list of balances at 31 March 2022. $ Fixtures and fittings (net book value) 10 800 Inventory 2 150 Prepaid rent Balance at bank 2 330 Trade payables 1 875 Loan (repayable 2027) 5 000 Capital ? REQUIRED Prepare a statement of affairs to calculate Stalla’s capital at 31 March 2022. Stalla Statement of Affairs at 31 March 2022 $ $ Calculate Stalla’s profit for the year ended 31 March 2022. Stalla is now considering whether she should start to sell at least some of her goods on credit. REQUIRED Advise Stalla whether or not she should start selling on credit terms. Justify your answer.
7707_s22_qp_22
THEORY
2022
Paper 2, Variant 2
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Paul is a trader. He maintains a three-column cash book. Paul has prepared draft financial statements for the year ended 31 March 2024. Paul later discovered the following five errors in his accounting records for the year ended 31 March 2024. A purchase invoice, $140, had been debited to the account for office equipment. Cash discount received, $18, had been recorded in the bank payments column of the cash book. Carriage inwards, $82, had been credited to the carriage outwards account. A payment for insurance, $375, had been debited to the bank account and credited to the insurance account. The bank receipts column of the cash book for February 2024 had been undercast by $90. REQUIRED Prepare the journal entries required to correct these five errors. Narratives are not required. Paul Journal Error number Details Debit $ Credit $ Calculate the corrected bank balance at 31 March 2024. $ Original cash at bank balance per draft financial statements Bank balance after correcting errors Calculate the corrected profit for the year ended 31 March 2024. $ Original profit for the year per draft financial statements Profit for the year after correcting errors
7707_s24_qp_21
THEORY
2024
Paper 2, Variant 1
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Questions Discovered
227