Financial Statements for Short Cuts: Income Statement and Balance Sheet

Replacement
coursework

Contents
SECTION 1......................................................................................................................................3
The statement of comprehensive income for Short Cuts for the year ending 30th September
2020........................................................................................................................................3
The statement of financial position for Short Cuts as at 30th September 2020.....................3
SECTION 2......................................................................................................................................4
SECTION 3......................................................................................................................................5
1. Main users of the financial statements...............................................................................5
2. General purpose of the two main final accounts / financial statements.............................6
3. Meaning and relevance for accounting practice for each of the following accounting
concepts..................................................................................................................................7
4. Double entry bookkeeping system follows the rules of the accounting equation..............7
REFERENCES................................................................................................................................8

SECTION 1
The statement of comprehensive income for Short Cuts for the year ending 30th September
2020.
Income statement of Pete ory on-30 september 2020
(A) Sale revenue: Gross sale 129,400.00
Discount received 1,840.00
less: Sale return -2,000.00 129,240.00
Net sale 129,240.00
(B) Cost of good sold
Opening stock 18,000.00
Add: Out purchases (75000-900) 74,100.00
Add: Direct expanses
Discount allowed 2,373.00
Less: Closing stock 20,000.00 74,473.00
(C) Gross profit (A+B) 203,713.00
(D) Operating expanses:
Salaries+accrued (32500+1050) 33,550.00
Less: General Expanses+ outstanding (3300+475) 3,775.00
Rents rates - prepaid (2000-200) 1,800.00
Profit for Depriciation- Fixtures(15000-8700)*10/100 630.00
Motor Vhicals(30000*25%) 7,500.00
Profit for doubtful debt (43000*10%) 4,300.00 51,555.00
(E.) Operating profit (C-D) 152,158.00
Less: Interest 1,127.00
Profit before tax 151,031.00
Add: Non Operating income
Rent Received 4,460.00 4,460.00
Net profit Before tax - 155,491.00
Less: Tax - -
Net profit After tax 155,491.00
The statement of financial position for Short Cuts as at 30th September 2020.
Balance sheet of Pete ory on-30 september 2020
1. Liabilities
(A) Capital: 27000 27,000.00
Less: Drawing 2000 2,000.00 25,000.00
(B) Reserve and surplus: Profit of the year 155,491.00
(C.) Non current liabilities

Loan: 5 year loan 32,000.00
Mortgage 38,000.00 70,000.00
(D) Current Liabilities
Provision for depreciation on fixtures (8000+700) 8,700.00
Provision for depreciation on motors (22500+7500) 30,000.00
Bank overdraft 5,100.00
Trade payables 35,000.00
Salaries accrued 1,050.00
General expanses Outstanding 475.00
Provision for doubtful debts 4,300.00 84,625.00
Total 335,116.00
2. Assets
(A) Non-Current assets
Fixed assets: Shop Premises 72,000.00
Fixtures 15,000.00
Motor Vehicle 30,000.00 117,000.00
Investments - -
Other noncurrent liabilities -
153716
-
(B) Current assets: Cash 1,200.00
Trade Receivables 43,000.00
Inventory 20,000.00
Prepaid rent & rates 200.00 64,400.00
Total 335116.00
SECTION 2
Ans:1 d. Assets – Liabilities = Capital
Ans:2 d. None of the above.
Ans:3 d. Corporation tax payable
Ans:4 d. Road tax
Ans:5 d. £47,000
Ans:6 b. Added to the asset’s current year depreciation expense charge on the SFP
Ans:7
d. Records bad debts without taking them out of the 'books' as an entity, thus showing the full
amount owed by debtors as a current asset.
Ans:8 b. An asset of the business
Ans:9 c. £320,000
Ans:1
0 b. £330,000
Ans:1
1 c. The amount of cash introduced by the owner at the commencement of business