Q. 22/3 B. Vella is a sole proprietor is a dealer in sports wear. His financial year runs The following is his Trial Balance on 31* to 31st December each year. December 2006. Trial Balance as at 31st December 2006 € 6,000 Shop Fittings (at cost) Accumulated Depreciation on Shop Fittings 1,200 26,400 Trade Receivables 594 Discount received 60,000 Buildings 1,440 Purchases Returns 516 Carriage on Purchases 660 Insurance 6,000 Office salaries and expenses 5,768 Trade Payables 16,800 Drawings Sales 74,160 Lighting and Heating 3,234 Inventory 1st January 2006 5,640 Discount allowed 372 Purchases 42,840 Capital 88,236 Rent 2,160 Bank 1,494 Allowance for Doubtful Debts 720 172,116 172,116 Notes at 31st December 2006: a) Inventory as at 31st December 2006 amounts to €6,180 b) Rent prepaid amounts to €150. c) Lighting and Heating outstanding €80. d) Depreciation on Shop Fittings is calculated at 10% per annum (Reducing Balance Method). There is no depreciation on Buildings. e) Allowance for Doubtful Debts is to be increased by €80. You are required to draw up an Income Statement for the year ended 31 December 2006 and a Statement of Financial Position as at that date taking into consideration the notes at the end of the year.

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter6: Deductions And Losses: In General

Section: Chapter Questions

Problem 44P

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Question

Draw up the statement of financial position as at 31st December 2006

Q. 22/3
B. Vella is a sole proprietor is a dealer in sports wear. His financial year runs
The following is his Trial Balance on 31*
to 31st December each year.
December 2006.
Trial Balance as at 31st December 2006
€
6,000
Shop Fittings (at cost)
Accumulated Depreciation on Shop Fittings
1,200
26,400
Trade Receivables
594
Discount received
60,000
Buildings
1,440
Purchases Returns
516
Carriage on Purchases
660
Insurance
6,000
Office salaries and expenses
5,768
Trade Payables
16,800
Drawings
Sales
74,160
Lighting and Heating
3,234
Inventory 1st January 2006
5,640
Discount allowed
372
Purchases
42,840
Capital
88,236
Rent
2,160
Bank
1,494
Allowance for Doubtful Debts
720
172,116 172,116
Notes at 31st December 2006:
a) Inventory as at 31st December 2006 amounts to €6,180
b) Rent prepaid amounts to €150.
c)
Lighting and Heating outstanding €80.
d) Depreciation on Shop Fittings is calculated at 10% per annum (Reducing
Balance Method). There is no depreciation on Buildings.
e) Allowance for Doubtful Debts is to be increased by €80.
You are required to draw up an Income Statement for the year ended 31
December 2006 and a Statement of Financial Position as at that date taking
into consideration the notes at the end of the year.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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