SHORT QUESTIONS

Q001eng

The following are the account balances of Betty Lam’s business as at 31 December 2008. Draw up a statement of

financial position as at that date. (9 marks)

Capital as at 1 January 2008 $78,070

Furniture $46,500

Accounts receivable $20,900

Accounts payable $7,830

Bank $39,300

Drawings $14,200

Inventory at 31 December 2008 $24,000

Net profit for the year $59,000

1
Answer:

(Vertical style)

Betty Lam

Statement of financial position as at 31 December 2008 0.5

$ $

Non-current assets

Furniture 46,500 1

Current assets

Inventory 24,000 1

Accounts receivable 20,900 1

Ban 1
39,300
k

84,200

Less Current liabilities

Accounts payable 7,830 1

0.
Net current assets 76,370
5

122,870

Financed by:

Capital

Balance as at 1 January 2008 78,070 1

Add Net profit for the year 59,000 1

137,070

Less Drawings 14,200 1

2
 122,870

Q002eng

The following are the account balances of Thomas Man’s business as at 31 July 2009. Draw up a statement of

financial position as at that date. (9 marks)

Accounts payable $4,240

Accounts receivable $11,350

Bank $21,314

Capital as at 1 August 2008 $72,843

Drawings $7,680

Inventory as at 31 July 2009 $12,975

Net profit for the year $3,206

Office equipment $26,970

3
Answer:

(Vertical style)

Thomas Man

Statement of financial position as at 31 July 2009 0.5

$ $

Non-current assets

Office equipment 26,970 1

Current assets

Inventory 12,975 1

Accounts receivable 11,350 1

Bank 21,314 1

45,639

Less Current liabilities

Accounts payable 4,240 1

Net current assets 41,399 0.5

68,369

Financed by:

Capital

Balance as at 1 August 2008 72,843 1

Add Net profit for the year 3,206 1

76,049

Less Drawings 7,680 1

68,369

4
Q003eng

The following are the account balances of Alex Chan’s business as at 31 October 2009. Draw up a statement of

financial position as at that date. (10 marks)

Capital as at 1 November 2008 ?

Motor vehicle $30,255

Accounts receivable $12,730

Accounts payable $7,460

Bank $23,900

Drawings $8,614

Inventory as at 31 October 2009 $14,555

Net profit for the year $35,990

Office equipment $62,430

5
Answer:

(Vertical style)

Alex Chan

Statement of financial position as at 31 October 2009 0.5

$ $

Non-current assets

Office equipment 62,430 1

Motor vehicle 30,255 92,685 1

Current assets

Inventory 14,555 1

Accounts receivable 12,730 1

Bank 23,900 1

51,185

Less Current liabilities

Accounts payable 7,460 1

Net current assets 43,725 0.5

136,410

Financed by:

Capital

Balance as at 1 November 2008 109,034 1

Add Net profit for the year 35,990 1

145,024

Less Drawings 8,614 1

136,410

6
Q004eng

Paul Lau trades as a stationery wholesaler. The following trial balance was extracted from his ledgers on 31

March 2010:

Dr Cr

$ $

Rent and rates 68,800

Purchases and sales 936,600 1,794,000

Office furniture 119,700

Inventory as at 1 April 2009 213,900

Carriage inwards 14,000

Accounts receivable and accounts payable 547,600 203,400

Bank 155,600

Capital as at 1 April 2009 891,800

Delivery van 134,600

Discounts 43,300 10,900

Returns 31,400 10,000

Sundry expenses 16,400

Wages and salaries 320,200

Van running expenses 55,300

Drawings 248,300

Cash 4,400

2,910,100 2,910,100

7
Inventory as at 31 March 2010 was valued at $185,000.

Required:

Draw up an income statement for the year ended 31 March 2010 and a statement of financial position as at that

date. (25 marks)

8
Answer:

(Vertical style)

Paul Lau

Income Statement for the year ended 31 March 2010 0.5

$ $ $

1,794,00 1
Sales
0

Less Returns inwards 31,400 1

1,762,60

Less Cost of goods sold:

Opening inventory 213,900 1

Add Purchases 936,600 1

Carriage inwards 14,000 1

950,600

Less Returns outwards 10,000 940,600 1

1,154,50

Less Closing inventory 185,000 969,500 1

Gross profit 793,100 1

Add Other revenues:

Discounts received 10,900 1

804,000

Less Expenses:

Rent and rates 68,800 1

Discounts allowed 43,300 1

Sundry expenses 16,400 1

Wages and salaries 320,200 1

Van running expenses 55,300 504,000 1

9
Net profit 300,000 0.5

10
 Paul Lau

Statement of financial position as at 31 March 2010 0.5

$ $

Non-current assets

Office furniture 119,700 1

Delivery van 134,600 254,300 1

Current assets

Inventory 185,000 1

Accounts receivable 547,600 1

Bank 155,600 1

Cash 4,400 1

892,600

Less Current liabilities

Accounts payable 203,400 1

Net current assets 689,200 0.5

943,500

Financed by:

Capital

Balance as at 1 April 2009 891,800 1

Add Net profit for the year 300,000 0.5

1,191,800

Less Drawings 248,300 0.5

943,500

11
Q005eng

Candy Cho is a sole trader. The following trial balance was extracted from her books on 31 March 2009:

Dr Cr

$ $

Accounts receivable and accounts payable 575,020 294,090

Capital 374,370

Carriage inwards 3,000

Carriage outwards 3,420

Cash at bank 100,950

Cash in hand 17,300

Discounts allowed 28,530

Discounts received 37,310

Drawings 52,670

Electricity 8,770

Fixtures and fittings 10,970

Inventory as at 1 April 2008 256,780

Loan: Bill Chan (repayable in 2011) 131,680

Purchases 862,530

Rates 13,160

Rent 24,140

Repairs and maintenance 6,580

Returns outwards 13,160

12
Salaries 32,920

Sales 1,146,130

1,996,740 1,996,740

Inventory as at 31 March 2009 was valued at $10,000.

Required:

Draw up an income statement for the year ended 31 March 2009 and a statement of financial position as at that

date . (26 marks)

13
Answer:

Candy Cho

Income Statement for the year ended 31 March 2009 0.5

$ $ $

256,780 Sales 1,146,130 1, 1

Opening inventory

Add Purchases 862,530 1

Carriage 3,000 1

inwards

865,530

Less Returns 1
13,160 852,370
outwards

1,109,150

Less Closing 1
10,000
inventory

Cost of goods sold 1,099,150

Gross profit c/d 46,980 0.5

1,146,130
1,146,130

Gross profit b/d 1,

Carriage outwards 3,420 46,980
0.5

Discounts allowed 28,530 Discounts received 37,310 1, 1

Net loss 33,230 1,

Electricity 8,770
0.5

Rates 13,160 1

Rent 24,140 1

Repairs and 6,580 1

14
maintenance

Salaries 32,920 1

117,520 117,520

Candy Cho

Statement of financial position as at 31 March 2009 0.5

$ $ $ $

Non-current assets Capital

Balance as at 1 April 374,37 1, 1

Fixtures and fittings 10,970
2008 0

Less Net loss for the

33,230 0.5
year

Current assets Drawings 52,670 85,900 1

288,47
Inventory 10,000 1
0

Accounts receivable 575,020 1

Bank 100,950 Non-current liabilities 1

703,27 131,68 1, 1
Cash 17,300 Loan: Bill Chan
0 0

Current liabilities

294,09 1
Accounts payable
0

714,24 714,24

0 0

15
16
Q006eng Michael Lee, a sole proprietor, extracted the following trial balance from his books on

30 April 2010:

Dr Cr

$ $

Accounts payable 17,280

Accounts receivable 12,820

Advertising 9,840

Bank overdraft 6,200

Capital 475,470

Carriage inwards 2,820

Carriage outwards 2,090

Motor car 35,700

Drawings 102,960

Water and electricity 10,690

Insurance 7,850

Overdraft interest 280

Inventory as at 1 May 2009 39,790

Premises 318,760

Purchases 435,170

Rent revenue 20,660

Motor expenses 11,850

Returns outwards 9,970

17
Sales 565,950

Telephone and internet expenses 3,410

Returns inwards 1,500

Office equipment 100,000

1,095,530 1,095,530

Inventory as at 30 April 2010 was valued at $37,190.

Required:

Draw up an income statement for the year ended 30 April 2010 and a statement of financial position as at that

date (27 marks)

18
Answer:

Michael Lee

Income Statement for the year ended 30 April 2010 0.5

$ $ $

Sales 565,950 1

Less Returns inwards 1,500 1

564,450

Less Cost of goods sold:

Opening inventory 39,790 1

Add Purchases 435,170 1

Carriage inwards 2,820 1

437,990

Less Returns outwards 9,970 428,020 1

467,810

Less Closing inventory 37,190 430,620 1

Gross profit 133,830 1

Add Other revenues:

Rent revenue 20,660 1

154,490

Less Expenses:

Advertising 9,840 1

Carriage outwards 2,090 1

Water and electricity 10,690 1

Insurance 7,850 1

Overdraft interest 280 1

Motor expenses 11,850 1

Telephone and internet expenses 3,410 46,010 1

Net profit 108,480 0.5

19
 Michael Lee

Statement of financial position as at 30 April 2010 0.5

$ $ $

Non-current assets

318,76 1
Premises
0

100,00 1
Office equipment
0

Motor car 35,700 454,460 1

Current assets

Inventory 37,190 1

Accounts receivable 12,820 1

50,010

Less Current liabilities

17,28
Accounts payable 1
0

Bank overdraft 6,200 23,480 1

Net current assets 26,530 0.5

480,990

Financed by:

Capital

Balance as at 1 May 2009 475,470 1

Add Net profit for the year 108,480 0.5

583,950

Less Drawings 102,960 0.5

480,990

20
21
Q007eng The following is a summary of Helen Wong’s bank account for the year ended

30 April 2008.

Bank

$ $

Balance b/f 311,911 Accounts payable 499,352

Accounts receivable 530,417 Salaries 67,168

Rent revenue 30,785 Telephone expenses 2,693

Bank interest revenue 7,696 Rent 9,235

Carriage outwards 19,240

Lighting and water charges 12,908

Drawings 17,071

Balance c/f 253,142

880,809 880,809

Additional information was available on 30 April 2008:

Sales $855,619

Purchases $463,249

Returns inwards $6,436

Office equipment $9,725

Accounts receivable $741,646

Accounts payable $32,744

Cash $37,082

22
Capital as at 1 May 2007 $734,650

Inventory as at 1 May 2007 $21,899

Inventory as at 30 April 2008 $31,974

Required:

Prepare for Helen Wong an income statement for the year ended 30 April 2008 and a statement of financial

position as at that date. (23 marks)

23
Answer:

(Vertical style)

Helen Wong

Income Statement for the year ended 30 April 2008 0.5

$ $ $

Sales 855,619 1

Less Returns inwards 6,436 1

849,183

Less Cost of goods sold:

Opening inventory 21,899 1

Add Purchases 463,249 1

431,27
Less Closing inventory 31,974 453,174 1
5

Gross profit 396,009 1

Add Other revenues:

Rent revenue 30,785 1

Bank interest revenue 7,696 38,481 1

434,490

Less Expenses:

Salaries 67,168 1

Telephone expenses 2,693 1

Rent 9,235 1

Carriage outwards 19,240 1

Lighting and water charges 12,908 111,244 1

Net profit 323,246 0.5

24
 Helen Wong

Statement of financial position as at 30 April 2008 0.5

$ $

Non-current assets

Office equipment 9,725 1

Current assets

Inventory 31,974 1

Accounts receivable 741,646 1

Bank 253,142 1

Cash 37,082 1

1,063,844

Less Current liabilities

Accounts payable 32,744 1

Net current assets 1,031,100 0.5

1,040,825

Financed by:

Capital

Balance as at 1 May 2007 734,650 1

Add Net profit for the year 323,246 0.5

1,057,896

Less Drawings 17,071 0.5

1,040,825

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