I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

Cash at bank and in hand as at 31 January 20X6 

 

You need to identify cash payments received and cash payments made. 

(i) 

Cash received from sales 

 

 

 

$     

 

 

Total sales in the period 

 

27,250 

 

Add trade accounts receivable as at 1 August 20X5 

 

         0 

 

 

 

27,250 

 

Less unpaid debts as at 31 January 20X6 

 

  3,250 

 

Cash received 

 

24,000 

(ii) 

Cash paid 

 

 

 

 

$     

 

 

Trade accounts payable  

 

8,000 

 

Stationery, postage and wrapping 

 

500 

 

Telephone charges 

 

200 

 

Electricity 

 

600 

 

Cleaning and refreshments 

 

150 

 

Bank charges and interest 

 

40 

 

Bank overdraft repaid 

 

2,000 

 

Drawings by proprietor 

 

  6,000 

 

 

 

17,490 

Note. It is easy to forget some of these payments, especially drawings. 

 

 

 

$      

(iii) 

 

Cash in hand as at 1 August 20X5 

 

1,000 

 

 

Cash received in the period 

 

24,000 

 

 

 

25,000 

 

 

Cash paid in the period 

 

(17,490) 

 

 

Cash at bank and in hand as at 31 January 20X6 

 

   7,510 

(c) 

When irrecoverable debts are written off, the value of outstanding receivables must be reduced by 

the amount written off. This is because the customers are no longer expected to pay, and it 

would be misleading to show them in the statement of financial position as current assets of the 

business for which cash payment is expected within one year. Receivables will be valued at 

$3,250 less the irrecoverable debt of $250 less the allowance for receivables of $60 – ie at 

$2,940.  

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