Week 2: C31FF TUTORIAL QUESTIONS

Question 1: (Income statement)

From the following trial balance of B Lane after his first year’s trading, you are required to draw
up an income statement for the year ended 30 June 20X8. A balance sheet is not
required.
Trial Balance as at 30 June 20X8
Dr Cr
£ £
Sales 265,900
Purchases 154,870
Rent 4,200
Lighting and heating expenses 530
Salaries and wages 51,400
Insurance 2,100
Buildings 85,000
Fixtures 1,100
Debtors 31,300
Sundry expenses 412
Creditors 15,910
Cash at bank 14,590
Drawings 30,000
Vans 16,400
Motor running expenses 4,110
Capital 114,202
396,012 396,012
Stock at 30 June 20X8 was £16,280
Question 2: (statement of financial position)
The following is a list of the assets and claims of Aglowsun Engineering as at 30 June last year:

£000
Trade payables 86
Motor vehicles 38
Long-term borrowing (Loan from Industrial Finance Company) 260
Equipment and tools 207
Short-term borrowings 116
Inventories 153
Property 320
Trade receivables 185

Required:
a) Prepare the statement of financial position of the business as at 30 June last year from the
information provided, using the standard layout. (Hint: There is a missing item that needs to be
deduced and inserted.)
b) Discuss the significant features revealed by this financial statement.

Question 3: (statement of financial position)

G. Hope started in business on 1 July 20X0, with £40,000 capital in cash. During the first year, he kept
very few records of his transactions.
The assets and liabilities of the business at 30 June 20X1 were:
£
Freehold premises 76,000
Mortgage on the premises 50,000
Stock 24,000
Debtors 2,800
Cash and bank balances 5,400
Creditors 7,600
During the year, Hope withdrew £9,000 cash for his personal use but he also paid £6,000 received from
the sale of his private car into the business bank account.
Required:
From the above information, prepare a the statement of financial position (balance sheet) showing the
financial position of the business at 30 June 20X1 and indicating the net profit for the year.