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

PART F: PREPARING BASIC FINANCIAL STATEMENTS 

 

318

 

 

$ 

 Payables as at 1 August 20X5  

 4,000 

 Add purchases during the period, net of trade discount 

   9,800 

 

 13,800 

 Less settlement discounts received 

     (400) 

 

 13,400 

 Less payments to payables during the period* 

  (7,600) 

 

   5,800 

 * $8,000 less cash discount of $400. 

 

(b) 

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 receivables 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 payables (see (a)) 

 7,600 

 

 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 

 

 

 

 17,090 

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 

 (17,090)

 

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

    7,910

(c) 

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

the amount written off. Receivables will be valued at $3,250 less bad debts $250 and the 

allowance for receivables of $60 – ie at $2,940. 

(d) 

Non-current assets should be depreciated. However, in this exercise depreciation has been 

ignored. 

NEWBEGIN TOOLS 

 

 

STATEMENT OF FINANCIAL POSITION AS AT 31 JANUARY 20X6 

 

 

 

   $ 

 $ 

Non-current assets 

 

Motor vehicles 

 2,000 

Shop fittings 

 3,000 

 

 

 5,000

Current assets 

 

Inventories 

 5,450 

Receivables, less allowance for receivables 

 2,940 

Cash 

 7,910 

 

   16,300

 

   21,300

 

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CHAPTER 18  

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  PREPARATION OF FINANCIAL STATEMENTS FOR SOLE TRADERS