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319 

 

$ 

 $ 

Capital 

 

Capital as at 1 August 20X5 

 

 12,000

Profit for the period 

 

   9,500

 

 

 21,500

Less drawings 

 

   6,000

Capital as at 31 January 20X6 

 

 15,500

 

 

Current liabilities  

 

Trade payables 

 

   5,800

 

 

 21,300

The opening bank overdraft was repaid during the year and is therefore not shown at the year end.  

 

 

1.2 Example: accounts preparation from a trial balance 

The following trial balance was extracted from the ledger of Stephen Chee, a sole trader, as at  

31 May 20X1 – the end of his financial year. 

STEPHEN CHEE 

TRIAL BALANCE AS AT 31 MAY 20X1 

 

 Dr 

 Cr 

 

 $ 

 $ 

 Property, at cost 

 120,000 

 Equipment, at cost 

 80,000 

 Accumulated depreciation (as at 1 June 20X0) 

 

 – on property 

 

 20,000

 – on equipment 

 

 38,000

 Purchases 

 250,000 

 Sales 

   402,200

 Inventory, as at 1 June 20X0 

 50,000 

 Discounts received 

 

 4,800

 Returns out 

 

 15,000

 Wages and salaries 

 58,800 

 Irrecoverable debts 

 4,600 

 Loan interest 

 5,100 

 Other operating expenses 

 17,700 

 Trade payables 

 

 36,000

 Trade receivables 

 38,000 

 Cash in hand 

 300 

 Bank 

 19,300 

 Drawings 

 24,000 

 Allowance for receivables 

 

 500

 17% long-term loan 

 

 30,000

 Capital, as at 1 June 20X0 

                 121,300

 

 667,800   667,800

 EXAM FOCUS POINT 

You may not be asked to prepare a full statement of profit or loss or statement of financial position in 

your exam. However, the 15-mark format questions are likely to ask you to prepare extracts from these 

statements. 

In addition, the ACCA examining team has stated that it is essential that you practise preparing full 

financial statements so that you fully understand the concepts and principles involved. If you are 

moving on to study FR Financial Reporting, practising full questions now is vital. 

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