Neith

a)
Trial balance at 31 March 2020
Dr. Cr.
Fixtures and fittings at cost 300,000
PFD - Fixtures and fittings 120,000
Inventory 8,800
Trade receivables 16,100
Other receivables 2,750
Provision for doubtful debts 322
Petty Cash 100
Bank overdraft 11,400
Trade payables 3,200
Capital at 1.4.20 160,000
Sales 107,498
Purchases 41,520
Rent and rates 16,000
Office expenses 9,000
General expenses 8,150
402,420 402,420
b)
DETAILS Dr. Cr. Error Type E.O.C.
General expenses 32 Commission -
Office expenses 32
Sales 75 Principle Decrease
Trade receivables 75
Purchases 120 Ommission Decrease
Trade payables - Samir 120
Bank 72 Transposition Increase
Office expenses 72
Office expenses 235 Principle Decrease
Fixtures and equipment 235

Corrected trial balance at 31 March 2020

Dr. Cr.
Fixtures and fittings at cost 299,765
PFD - Fixtures and fittings 120,000
Inventory 8,800
Trade receivables 16,025
Other receivables 2,750
Provision for doubtful debts 322
Petty Cash 100
Bank overdraft 11,328
Trade payables 3,320
Capital at 1.4.20 160,000
Sales 107,423
Purchases 41,640
Rent and rates 16,000
Office expenses 9,131
General expenses 8,182
402,393 402,393

Neith
a)
Trial balance at 31 March 2021
Dr. Cr. Office expenses
Fixtures and equipment at cost 300,000 235
PFD - Fixtures and fittings 120,000
Inventory 8,800
Trade receivables 16,100
Other receivables 2,750 Furniture & Equipment
Provision for doubtful debts 322 235
Petty Cash 100
Bank overdraft 11,400
Trade payables 3,200
Capital at 1.4.20 160,000
Sales 107,498
Purchases 41,520
Rent and rates 16,000
Office expenses 9,000
General expenses 8,150
402,420 402,420
b)
DETAILS Dr. Cr. Error Type E.O.C.
1 General Expenses 32 Commission No effect
Office expenses 32
2 Sales 75 Principle Decrease
Anya 75
3 Purchases 120 Omission Decrease
Samir 120
4 Bank 72 Original entry Increase
Office expenses 72
5 Office expenses 235 Principle Decrease
Fixtures & equipment 235

Corrected trial balance at 31 March 2020

Dr. Cr.
Fixtures and equipment at cost (300000-235) 299,765
PFD - Fixtures and fittings 120,000
Inventory 8,800
Trade receivables (16100-75) 16,025
Other receivables 2,750
Provision for doubtful debts 322
Petty Cash 100
Bank overdraft (11400-72) 11,328
Trade payables (3200+120) 3,320
Capital at 1.4.20 160,000
Sales (107498-75) 107,423
Purchases (41520+120) 41,640
Rent and rates 16,000
Office expenses (9000-32-72+235) 9,131
General expenses (8150+32) 8,182
402,393 402,393
235
 Mosi

Error No. DETAILS Dr. Cr.

1 Suspense 192
Commission receivable 96
Discount received 96
2 Sales 927
Suspense 927
3 Motor expenses 77 Omission
Bank 77
4 Petty Cash 135 Commission
Bank 135
5 Stacey 160 Commission
Tracey 160

c) Dr. Assets / expenses

Draft profit 39,970 Cr. Liabilities / income
Error No. 1 192
Error No. 2 (927)
Error No. 3 (77)
Corrected profit 39,158

Suspense account
Date Details $ Date Details $
2022 2022
30-Apr Bal b/d 735 30-Apr Sales 927
Discount received 96
Commission receivable 96
927 927

Bank
420 420

RJ
420 420

Purchases
160
a)
Cash book (bank columns only)
Date Details $ Date Details $
2022 2022
31-Aug Bal b/d 25600 31-Aug Dishonored chq - RJ 420
Standing order error 50 Insurance 110
Bank charges 75
Bal c/d 25045
25650 25650
1-Sep Bal b/d 25045

Bank Reconciliation Statement at 31st August 2022

Balance as per the bank statement 24815
Add: Uncredited lodgment 910
Less: Unpresented cheque - JW -680
Balance as per the cash book 25045
 KIA
a)
Corrective entries
Error No. Debit Credit
Account $ Account $
1 Drawings 200 Suspense 200
2 Abel 31 Office Expenses 31
3 Purchases Returns 105 Suspense 210
Sales Returns 105
4 Suspense 100 Motor expenses 100
5 Purchases 204 Abel 204

b)
Suspense account
Date Details $ Date Details $
2021 2021
30-Apr Bal b/d 310 30-Apr Drawings 200
Motor expenses 100 Purchases Returns 105
Sales Returns 105
410 410
c)
Abel
Date Details $ Date Details $
2021 2021
30-Apr Office expenses 31 30-Apr Bal b/d 327
Bal c/d 500 Purchases 204
531 531
1-May Bal b/d 500

KIA
a)
Corrective entries
Error No. Debit Credit
Account $ Account $
1 Drawings 200 Suspense 200
2 Abel 31 Office expenses 31
3 Sales returns 105 Suspense 210
Purchases returns 105
4 Suspense 100 Motor expenses 100
5 Purchases 204 Abel 204

b)
Suspense account
Date Details $ Date Details $
2021 2021
30-Apr Bal b/d 310 30-Apr Drawings 200
Motor expenses 100 Sales returns 105
 Purchases returns 105
410 410
c)
Abel
Date Details $ Date Details $
2021 2021
30-Apr Office expenses 31 30-Apr Bal b/d 327
Bal c/d 500 Purchases 204
531 531
1-May Bal b/d 500

Non-current asset

1) Application of the Materiality concept

2) The $5 calculator is a petty, insignificant item. It is not worthwhile to

keep track of its deprection and carrying value.

3) charging it as an expense would suffice for its accountability

Office expenses
31 31

Abel
31
 JAS
Depreciation Statement - Fixtures disposed
Year Cost % age Dep PFD Agg. Dep. NBV
31.12.18 20000 - 4500 0 4500 15500
31.12.19 20000 - 4500 4500 9000 11000
31.12.20 20000 - 2250 9000 11250 8750

Depreciation Statement - New fixtures

Year Cost % age Dep PFD Agg. Dep. NBV
31.12.20 30000 - 6750 0 6750 23250

Depreciation Statement - Others

Year Cost % age Dep PFD Agg. Dep. NBV
31.12.20 95000 - 21375 68625 90000 5000
30375
Fixtures account
Date Details $ Date Details $
2020 2020
Jan 1 Bal b/d 115000 Jun 30 Disposal 20000
Bank 30000 Dec 31 Bal c/d 125000
145000 145000
2021
Jan 1 Bal b/d 125000

Provision for depreciation of fixtures account

Date Details $ Date Details $
2020 2020
Jun 30 Fixtures disposal 11250 Jan 1 Bal b/d 77625
Dec 31 Bal c/d 96750 Dec 31 Income statement 30375
108000 108000
2021
Jan 1 Bal b/d 96750

Fixtures disposal account

Date Details $ Date Details $
2020 2020
Jun 30 Fixtures at cost 20000 Jun 30 PFD - fixtures 11250
Bank 6000
Dec 31 Income statement 2750
20000 20000

JAS
Depreciation Statement - Fixtures disposed
Year Cost % age Dep PFD Agg. Dep. NBV Straight Line Deprecat
31.12.18 20000 - 4500 0 4500 15500
 31.12.19 20000 - 4500 4500 9000 11000
31.12.20 20000 - 2250 9000 11250 8750 6000 2750
-2750
Depreciation Statement - New fixtures
Year Cost % age Dep PFD Agg. Dep. NBV
31.12.20 30000 - 6750 0 6750 23250

Depreciation Statement - Others

Year Cost % age Dep PFD Agg. Dep. NBV
31.12.20 95000 - 21375 68625 90000 5000
30375
Fixtures account S.L.
Date Details $ Date Details $ R.B.
2020 2020
Jan 1 Bal b/d 115000 Jun 30 Disposal 20000
Bank 30000 Dec 31 Bal c/d 125000
145000 145000
2021
Jan 1 Bal b/d 125000

Provision for depreciation of fixtures account

Date Details $ Date Details $
2020 2020
Jun 30 Disposal 11250 Jan 1 Bal b/d 77625
Dec 31 Bal c/d 96750 Dec 31 Income statement 30375
108000 108000
2021
Jan 1 Bal b/d 96750

Fixtures disposal account

Date Details $ Date Details $
2020 2020
Jun 30 Fixtures 20000 Jun 30 PFD - Fixtures 11250
Bank 6000
Dec 31 Income statement 2750
20000 20000
Straight Line Deprecation Cost-Scrap 18000 4500
Life 4
 4500

Usage
Wear and tear
Osolescence & technological changes

Cost of consuming an asset during one

financial year

Depreciation on cost
Depreciation on book value
 Sariah
Depreciation Statement - Fixtures disposed
Year Cost % age Dep PFD Agg. Dep. NBV
31-10-18 1500 10% 150 0 150 1350
31-10-19 1500 10% 135 150 285 1215

Depreciation Statement - New fixtures

Year Cost % age Dep PFD Agg. Dep. NBV
31.10.20 3500 - 350 0 350 3150

Depreciation Statement - Others

Year Cost % age Dep PFD Agg. Dep. NBV
31-10-20 27100 10% 2120 5900 8020 19080

Fixtures & fittings account

Date Details $ Date Details $
2019 2020
Oct 1 Bal b/d 28600 Jan 31 Disposal 1500
2020 Sep 30 Bal c/d 30600
Mar 31 Bank 3500
32100 32100
2020
Oct 31 Bal b/d 30600

Provision for depreciation of fixtures & fittings

Date Details $ Date Details $
2020 2019
Jan 31 Disposal 285 Oct 1 Bal b/d 6185
Dec 31 Bal c/d 8370 Dec 31 Income statement 2470
8655 8655
2021
Jan 1 Bal b/d 8370

Fixtures disposal account

Date Details $ Date Details $
2020 2020
Jan 31 Fixtures & fittings 1500 Jan 31 PFD - Fixtures 285
Bank 1150
Oct 31 Income statement 65
1500 1500

Sariah
Depreciation Statement - Fixtures disposed
Year Cost % age Dep PFD Agg. Dep. NBV
30-9-18 1500 10% 100 0 100 1400
 30-9-19 1500 10% 140 100 240 1260
30-9-20 1500 10% 42 240 282 1218

Depreciation Statement - New fixtures

Year Cost % age Dep PFD Agg. Dep. NBV
30-9-20 3500 10% 175 0 175 3325

Depreciation Statement - Others

Year Cost % age Dep PFD Agg. Dep. NBV
30-9-20 27100 10% 2116 5945 8061 19040
8236
Fixtures & fittings at cost account
Date Details $ Date Details $
2019 2020
Oct 1 Bal b/d 28600 Jan 31 Disposal 1500
2020 Sep 30 Bal c/d 30600
Mar 31 Bank 3500
32100 32100
Oct 1 Bal b/d 30600

Provision for depreciation of fixtures & fittings

Date Details $ Date Details $
2020 2019
Jan 31 Disposal 282 Oct 1 Bal b/d 6185
Sep 30 Bal c/d 8236 2020
Sep 30 Income statement 2333
8518 8518
Oct 1 Bal b/d 8236

Fixtures disposal account

Date Details $ Date Details $
2020 2020
Jan 31 Fixtures & Fittings 1500 Jan 31 PFD - Fixtures & Fittings 282
at cost Bank 1150
Sep 30 Income statement 68
1500 1500

a)
Details Dr. Cr.
Motor vehicles 6350
Sharpe Motors 6350

Irrecoverable debts 1200

Trade receivables - 1200
Ruhee
Irrecoverable debts
1200

Ruhee
1200 1200
 1 Usage Straight line depreciation = Cost - Residual Value
2 Wear and tear Life (in years)
3 Obsolescence

Cost of consuming a non-current asset in one financial year

Yr. Ended Cost % age Dep PFD Acc. Dep. Carr. Val.
Delivery Vehicle A
31-12-2015 35000 25% 8750 13125 21875 13125
31-12-2016 35000 25% 8750 21875 30625 4375
Delivery Vehicle B
31-12-2015 40000 25% 2500 0 2500 37500
31-12-2016 40000 25% 10000 2500 12500 27500
Delivery Vehicle C
31-12-2016 28000 25% 3500 0 3500 24500

Bradley 46625
Delivery Vehicles Account
Date Details $ Date Details $
2015 2015
1-Jan Bal b/d 35000 31-Dec Bal c/d 75000
1-Oct Bank 40000
75000 75000
2016 2016
1-Jan Bal b/d 75000 31-Dec Bal c/d 103000
1-Jul XZ Motors 28000
103000 103000
2017 2017
1-Jan Bal b/d 103000 1-Jan Disposal 28000

Bradley
Provision for Depreciation - Delivery Vehicles Account
Date Details $ Date Details $
2015 2015
31-Dec Bal c/d 24375 1-Jan Bal b/d 13125
31-Dec Income statement 11250
24375 24375
2016 2016
31-Dec Bal c/d 46625 1-Jan Bal b/d 24375
31-Dec Income statement 22250
46625 46625
2017 2017
1-Jan Bal b/d 3500 1-Jan Bal b/d 46625
 Bradley
Disposal Account
Date Details $ Date Details $
2017 2017
1-Jan Delivery Vehicles 28000 1-Jan Provision for Depreciation 3500
at Cost Delivery Vehicles
31-Dec Income statement 1000 DDE Transport 25500
29000 29000

DDE Transport
25500

Date Details Dr. Cr.

2017
1-Jan Disposal 28000
Delivery Vehicles at Cost 28000
PFD - Delivery Vehicles 3500
Disposal 3500
DDE Transport 25500
Disposal 25500
31-Dec Disposal 1000
Income statement 1000
Yr. Ended Cost % age Dep PFD Acc. Dep. Carr. Val.
Machinery Disposed
31-12-17 4200 20% 840 0 840 3360
31-12-18 4200 20% 840 840 1680 2520
Other Machinery
31-12-19 13800 20% 2760 7320 10080 3720

Machinery at cost
Date Details $ Date Details $
2019 2019
1-Jan Bal b/d 18000 30-Jun Asset Disposal 4200
31-Dec Bal c/d 13800
18000 18000
2020
1-Jan Bal b/d 13800

Provision for Depreciation - Machinery

Date Details $ Date Details $
2019 2019
30-Jun Asset Disposal 1680 1-Jan Bal b/d 9000
31-Dec Bal c/d 10080 31-Dec Income statement 2760
11760 11760
2020
1-Jan Bal b/d 10080

Asset Disposal
Date Details $ Date Details $
2019 2019
30-Jun Machinery at cost 4200 30-Jun Provision for Depreciat- 1680
ion - Machinery
Bank 2000
31-Dec Income statement 520
4200 4200
 KARISHMA

Insurance
Date Details $ Date Details $
2020 2021
1-Oct Bal b/d 1700 28-Feb Bank 300
2021 30-Sep Income statement 6200
7-Feb Bank 3400 Bal c/d 2100
13-Aug Bank 3500

8600 8600
1-Oct Bal b/d 2100

Electricity
Date Details $ Date Details $
2020 2020
14-Oct Bank 1800 1-Oct Bal b/d 1800
2021 2021
24-Jan Bank 1800 30-Sep Income statement 5600
26-May Bank 1800
30-Sep Bal c/d 2000
7400 7400
1-Oct Bal b/d 2000

KARISHMA

Insurance Prepayment - Asset (curr

Date Details $ Date Details $
2020 2021
1-Oct Bal b/d 1700 28-Feb Bank 300 Aug
2021 30-Sep Income statement 6200 Sep
7-Feb Bank 3400 Bal c/d 2100 Oct
13-Aug Bank 3500 Nov
8600 8600 Dec
1-Oct Bal b/d 2100
8300

Electricity
Date Details $ Date Details $ Owing/accrued/outstan
2020 2020
14-Oct Bank 1800 1-Oct Bal b/d 1800 Income statement for th
2021 2021 Expenses
24-Jan Bank 1800 30-Sep Income statement 5600 Electricity
26-May Bank 1800 SOFP at 30 Sep 2021
30-Sep Bal c/d 2000 Current Liabilities
7400 7400 Other payables
 1-Oct Bal b/d 2000

Rent receivable
Date Details $ Date Details $ Income statement for th
2021 2020 Other income
30-Sep Income statement 1965 1-Oct Bank 800 Rent receivable
Bal c/d 510 2021 SOFP at 30 Sep 2021
2-Mar Bank 825 Current Liabilities
21-Aug Bank 850 Other payables
2475 2475
1-Oct Bal b/d 510 Advance payment - Curre

Income statement Accrued SOFP Prepaid SOFP

Expense Expenses Liability Other payables Asset Other receivables
Income Other income Asset Other receivables Liability Other payables
Prepayment - Asset (current)

700 Income statement for the year ended Sep 30th, 2021
700 Expenses
700 Insurance $6,200
700 SOFP at 30 Sep 2021
700 Current Assets
Other receivables $2,100

Owing/accrued/outstanding - Liability (current)

Income statement for the year ended Sep 30th, 2021

$5,600
SOFP at 30 Sep 2021
Current Liabilities
Other payables $2,000
Income statement for the year ended Sep 30th, 2021
Other income
Rent receivable $1,965
SOFP at 30 Sep 2021
Current Liabilities
Other payables $510

Advance payment - Current Liability

 Ayesha

Dr. Sales Ledger Control Account Cr.

Date Details $ Date Details $
2021 2021
Aug 1 Bal b/d 9800 Aug 1 Bal b/d 420
Aug 31 Sales 88850 Aug 31 Bank 82100
Interest receivable 90 Discount allowed 900
Bal c/d 350 Irrecoverable debts 300
Sales Returns 2400
Contra set-off 2920
Bal c/d 10050
99090 99090
Sep 1 Bal b/d 10050 Sep 1 Bal b/d 350

Dr. Purchases Ledger Control Account Cr.

Date Details $ Date Details $
2021 2021
Aug 31 Bank 50600 Aug 1 Bal b/d 7700
Discount received 600 Aug 31 Purchases 55400
Contra set-off 2920
Bal c/d 8980
63100 63100
Sep 1 Bal b/d 8980

Sales Sales journal

Interest receivable General journal
Receipts from customers Cash book
Discount allowed General journal
Irrecoverable debts General journal
Sales Returns Sales returns journal
Contra set-off General journal

Purchases Purchases journal

Payments to suppliers Cash book
Discount received General journal

Dr. Sales Ledger Control Account Cr.

Date Details $ Date Details $
2021 2021
Aug 1 Bal b/d 9800 Aug 1 Bal b/d 420
Aug 31 Sales 88850 Aug 31 Bank 82100
Interest receivable 90 Discount allowed 900
Bal c/d 350 Irrecoverable debt 300
Sales returns 2400
Contra set-off 2920
Bal c/d 10050
 99090 99090
Sep 1 Bal b/d 10050 Sep 1 Bal b/d 350

Dr. Purchases Ledger Control Account Cr.

Date Details $ Date Details $
2021 2021
Aug 31 Bank 50600 Aug 1 Bal b/d 7700
Discount received 600 Aug 31 Purchases 55400
Contra set-off 2920
Bal c/d 8980
63100 63100
Sep 1 Bal b/d 8980
 ENIOLA
a)

Dr. Cash Book (amended) Cr.

Date Details $ Date Details $
2020 2020
July 31 Bal c/d 4480 July 31 Bal b/d 3420
Direct Debit 350
Dishonored cheque 665
Bank charges 45
4480 4480
31-Jul Bal b/d 4480

b)
$
Balance as per the Cash Book (4,480)
Add: Unpresented cheques 1,290
Less: Uncredited deposits (410)
Overdraft as per the bank statement (3,600)

c)
Dr. Rent and Rates Cr.
Date Details $ Date Details $
2019 2019
Aug 1 Bal b/d 260 Aug 1 Bal b/d 900
Bank 3150 2020
2020 July 31 Income statement 7210
Oct 1 Bank 1860 Bal b/d 310
March 1 Bank 2700
July 31 Bal b/d 450
8420 8420
Aug 1 Bal b/d 310 Aug 1 Bal b/d 450

ENIOLA
a)

Dr. Cash Book - Bank Column (amended) Cr.

Date Details $ Date Details $
2020 2020
Jul 31 Bal c/d 4480 Jul 31 Bal b/d 3420
Direct debit payment 350
Dishonored cheque 665
Bank charges 45
4480 4480
 31-Jul Bal b/d 4480

b)
$
Balance as per the updated Cash Book (4,480)
Add: Unpresented cheques 1,290
Less: Uncredited deposits (410)
Overdraft as per the bank statement (3,600)

c)
Dr. Rent and Rates Cr.
Date Details $ Date Details $
2019 2019
Aug 1 Bal b/d 260 Aug 1 Bal b/d 900
Bank 3150 2020
Oct 1 Bank 1860 Jul 31 Income statement 7210
2020 Bal c/d 310
March 1 Bank 2700
Jul 31 Bal c/d 450
8420 8420
Aug 1 Bal b/d 310 Aug 1 Bal b/d 450

a)

Dr. Cash Book - Bank Column (amended) Cr.

Date Details $ Date Details $
2020 2020
Jul 31 Bal c/d 4480 Jul 31 Bal b/d 3420
Direct Debit 350
Dishonored cheque 665
Bank charges 45
4480 4480
31-Jul Bal b/d 4480

b)
$
Balance as per the updated Cash Book (4,480)
Add: Unpresented cheques 1,290
Less: Uncredited deposits (410)
Overdraft as per the bank statement (3,600)

c)
Dr. Rent and Rates Cr.
Date Details $ Date Details $
2019 2019
Aug 1 Bal b/d 260 Aug 1 Bal b/d 900
Bank 3150 2020
2020 Aug 1 Income statement 7210
Oct 1 Bank 1860 Bal c/d 310
Mar 1 Bank 2700
Aug 1 Bal c/d 450
8420 8420
Aug 1 Bal b/d (rates) 310 Aug 1 Bal c/d (rent) 450
 Haziq
Income statement for the year ended 31 July 2020
$ $ Sales 100
Revenue 166,000 Profit 40
Cost 60

Less: cost of goods sold Details

Opening inventory 8,400 Bank
Add: Purchases 97,400 Bal c/d
Less: Closing inventory (6,200)
Cost of sales (99,600)
Gross profit 66,400
Cost of Sales
Less: Expenses 99600
Rent 2,880 CI
Wages (41400+610) 42,010
Depreciation 3,130
General expenses 10,890 (58,910) Details
Profit from operations 7,490 Bal b/d
Less: Finance cost: (300) Bank
Profit for the year 7,190
Purchases Ledger Control Account
$ Details $
96220 Bal b/d 6280
7460 Purchases 97400
103680 103680

= OI+P-CI
= 8400+97400-CI
= 6200

Rent
$ Details $
240 Income statement 2880
2640
2880 2880
 Shiv
Income statement for the year ended 31 August 2021
$ $ Cost 100
Revenue 320,000 Profit 25
Sales 125

Less: cost of goods sold Purchases ledger co

Opening inventory 23,500 Details
Add: Purchases 254,700 Bank
Less: Closing inventory (22,200) Bal c/d
Cost of sales (256,000)
Gross profit 64,000

Less: Expenses 33,500 Cost of Sales

Depreciation 3,200 256000
Increase in provision for doubtful debts 777 (37,477) CI
Profit for the year 26,523

Prudence concept Details

IAS 2 Bank
Cost NRV Bal c/d
1000 950

NRV Selling price less costs to completion less selling expenses

 256000
64000
320000

Purchases ledger control account

$ Details $
257700 Bal b/d 32600
29600 Purchases 254700
287300 287300

= OI+P-CI
= 23500+254700-CI
= 22200

Expenses
$ Details $
34000 Drawings 900
400 Income statement 33500
34400 34400
Bal b/d 400
 JABIR
a)
Revenue 160,000 1) Trends
Opening inventory 8,000 2) Like with like
Purchases 109,000 3) Industry average
Closing inventory (11,000)
Cost of sales (106,000)
Gross profit 54,000
Operating expenses (35,200)
Profit for the year 18,800
b)
i) Gross Margin 33.75%

ii) Trade receivables turnover 160000 7.08 times

22600 OR 52 Days 66

iii) Trade payables turnover 109000 9.40 times

11600 OR 39 days

iii) Inventory Turnover 11.16 Times

33 Days

Working Capital Cycle 46 days

JABIR
a) Enables comparison
Revenue 160,000 1) Trends
Opening inventory 11,000 2) Like with like
Purchases 109,000 3) Industry average
Closing inventory (8,000)
Cost of sales (112,000) 1) increasing the selling price(s) while
Gross profit 48,000 keeping the cost of sales constant
Operating expenses (35,200) 2) decreasing the COS while keeping the
Profit for the year 12,800 selling price constant
b)
i) Gross Margin 30.00% Drawbacks
Gross Mark Up 42.86% 1) Historical info is used
2) Only financial info is used
ii) Trade receivables turnover 7.08 times 3) A lot of analyses is
52 Days subjective

iii) Trade payables turnover 9.40 times

39 days 13
Bank overdraft
iii) Inventory Turnover 11.79 Times
31 Days

Working Capital Cycle 44 days

Efficiency Ratios

Trade receivables turnover = Credit Sales

Trade receivables at year end
= 15.40 Times
Or 24 days

Trade payables turnover = Credit Purchases

Trade payables at year end
= 17.14
Or 21 days

1000 Overdraw -1000

1500
1000
980

Factoring 5000
Factor -100
4900

Consistency principle
Depreciation 10000
Shareholders 4000 6000
Dividend

30th December
photocopier 80000 IAS 10 16000
20000 4000
15th January
0

Notes to financial statement

TRUE and FAIR

NDA

Tax evasion
Money Laundering

The ability of a business to pay off its debts

 Maira
Sales 100
Profit 40
Cost 60

Purchase price 70
Carriage inwards 2
Purchase cost 72

Inventory Value 9360

First two months 21,600

Next eight months 96,000
Last two months 32,400
Revenue for the year 150,000

Income statement (trading section) for the year ended 31st December 2020
$ $
Revenue 150,000
Less: Cost of Sales
Opening Inventory -
Add: Purchases 98,000
Add: Carriage inwards 2,800
Less: Drawings (1,440)
Less: Closing Inventory (9,360) (90,000)
Gross Profit 60,000

Cost of Sales = OI+P+C-D-CI

90000 = 0+98000+2800-D-9360
D = 1440

Drawings Purchases
1440 1440
 Simon
Vehicle A
Yr. ended Cost % age Dep PFD Agg. Dep. NBV
31.12.18 30,000 20% 6,000 - 6,000 24,000
31.12.19 30,000 20% 6,000 6,000 12,000 18,000
31.12.20 30,000 20% 6,000 12,000 18,000 12,000

Vehicle B
Yr. ended Cost % age Dep PFD Agg. Dep. NBV
31.12.18 25,000 20% 5,000 - 5,000 20,000
31.12.19 25,000 20% 5,000 5,000 10,000 15,000
31.12.20 25,000 20% 1,250 10,000 11,250 13,750

Delivery vehicles account

Date Details $ Date Details $
2019 2019
Jan 1 Bal b/d 55000 Dec 31 Bal c/d 55000
2020 2020
Jan 1 Bal b/d 55000 Mar 31 Disposal 25000
Dec 31 Bal c/d 30000
55000 55000
2021
Jan 1 Bal b/d 30000

Provision for depreciation of delivery vehicles

Date Details $ Date Details $
2019 2019
Dec 31 Bal b/d 22000 Jan 1 Bal b/d 11000
Dec 31 Income statement 11000
22000 22000
2020 2020
Mar 31 Disposal 11250 Jan 1 Bal b/d 22000
Dec 31 Bal c/d 18000 Dec 31 Income statement 7250
29250 29250
2021
Jan 1 Bal b/d 18000

Delivery vehicles disposal account

Date Details $ Date Details $
2020 2020
Mar 31 Delivery vehicles 25000 Mar 31 PFD-delivery vehicles 11250
Bank 10350
Dec 31 Income statement 3400
25000 25000
 Simon
Vehicle A
Yr. ended Cost % age Dep PFD Agg. Dep. NBV
31-12-18 30,000 20% 6,000 - 6,000 24,000
31-12-19 30,000 20% 6,000 6,000 12,000 18,000
31-12-20 30,000 20% 6,000 12,000 18,000 12,000

Vehicle B
Yr. ended Cost % age Dep PFD Agg. Dep. NBV
31-12-18 25,000 20% 5,000 - 5,000 20,000
31-12-19 25,000 20% 5,000 5,000 10,000 10,000
31-12-20 25,000 20% 1,250 10,000 11,250 13,750
10350 3,400
Delivery vehicles at cost account
Date Details $ Date Details $
2019 2019
Jan 1 Bal b/d 55000 Dec 31 Bal b/d 55000
2020 2020
Jan 1 Bal b/d 55000 Mar 31 Disposal 25000
Dec 31 Bal c/d 30000
55000 55000
2021
Jan 1 Bal b/d 30000

Provision for depreciation of delivery vehicles

Date Details $ Date Details $
2019 2019
Dec 31 Bal c/d 22000 Jan 1 Bal b/d 11000
Dec 31 Income statement 11000
22000 22000
2020 2020
Mar 31 Disposal 11250 Jan 1 Bal b/d 22000
Dec 31 Bal c/d 18000 Dec 31 Income statement 7250
29250 29250
2021
Jan 1 Bal b/d 18000

Delivery vehicles disposal account

Date Details $ Date Details $
2020 2020
Mar 31 Delivery Vehicles 25000 Mar 31 PFD - Delivery vehicles 11250
at cost Bank 10350
Dec 31 Income statement 3400
25000 25000
 S.L. R.B. MaintenanceRunning cost
Yr 1 20000 6000 8000 2000 8000 16000
15000 Yr 2 18000 6000 5000 5000 11000 16000
11000 Yr 3 22000 6000 3000 8000 14000 17000

Consistency
 Non-current assets (life of more than one year)
Depreciation is the cost of consuming the asset, matched
against the revenue for a financial period; typically twelve months

1 Usage
2 Wear and tear
3 Obsolescence

13750
 Tej
Rent payable account
Date Details $ Date Details $
2020 2021
1-Mar Bal b/d 300 28-Feb Income statement 3900 12000
30-Jun Bank 1950 28-Feb Bal c/d 450 14000
30-Nov Bank 2100
4350 4350
2021
1-Mar Bal b/d 450
Accruals concept / matching principle
Provision for doubtful debts account
Date Details $ Date Details $
2021 2020
1-Mar Bal b/d 250
2021
28-Feb Bal c/d 420 28-Feb Income statement 170
420 420