Mr Phillips

Question

Assets = Liabilities + Equity

Fixed
Bank assets Stock Prepayments Receivables Payables Accruals Loan Equity Revenue Expenses Comments

1 20,000 20,000

2 25,000 25,000

-250 -250 Loan interest

3 -10,000 18,000 8,000

4 600 -600 Rent

5 -2,500 10,000 7,500

6 -1,500 1,000 -500 Advertising

Wages, L&H,
7 -1,650 -1,650 other

8 8,000 2,000 10,000

-5,000 -5,000 Cost of sales

9 -500 -500 Depreciation

10 90 -90 Water

37,100 17,500 5,000 1,000 2,000 15,500 690 25,000 20,000 10,000 -8,590
Mr Phillips's Statement of Financial Position as at 31 March 2020

£ £
Non-current assets
Fixed assets 17,500

Current assets
Inventory 5,000
Trade receivables 2,000
Prepayments 1,000
Cash at bank 37,100
45,100
Current liabilities
Trade payables -15,500
Accrued expenses -690

Net current assets 28,910

Long-term liabilities
Bank loan -25,000

Net assets 21,410

Ownership interest
Ownership 20,000
Drawings 0
Profit for the period 1,410
21,410
Mr Phillips's Income Statement for the month of March 2020

Revenue 10,000

Cost of sales -5,000

Gross Profit 5,000

Less expenses:

Rent -600

Advertising -500

Wages and salaries -1,000

Lighting and heating -300

Other operating expenses -350

Depreciation -500

Water -90

Operating profit 1,660

Loan interest -250

Net profit 1,410