A business is established with capital of £2,000 paid by the owner into a business bank account,

which has an overdraft facility. During the first year’s trading, the following transactions occurred:
Requirement
Prepare nominal ledger accounts, a statement of profit or loss for the year and a statement of
financial position as at the end of the year.

Purchases of goods for resale, on credit 4,300

Particulars Debit Credit Amount Statement of Profit or Loss Account Statement of Financial Position
Established Business with capital 2000 Cash at bank Capital 2000 Sales 5800 Non-Current Asset
Purchases of goods for resale Purchase Trade Payable 4300 Less: Purchase -4300 XYZ Asset 1500
Payment to credit supplier Trade Payable Cash at bank 3600 Gross Profit 1500 Total Non Current Asset 1500
Sales, all on credit Trade Recivable Sales 5800 Less: Other Expense -900 Current Asset
Receipts from credit customers 3,200 Cash at bank Trade Recivable 3200 Net Profit 600 Cash at Bank 0
Non-current assets purchased for cash 1,500 Asset Cash at bank 1500 Trade Recivable 2600
Other expenses, all paid in cash 900 Cash at bank Other Expense 900 Total Current Asset 2600
Ledger Total Asset 4100
Cash at Bank Owner's Equity
Particulars Debit Particulars Credit Capital 2000
Retained Earning 600
Capital 2000 Credit Supplier 3600 Total Capital 2600
Receipts from credit customers 3200 Asset Purchase 1500 Non-Current Liability
Other Expense 900
Total 5200 Total 6000 Total Non Current Liability
Current Liability
Capital Trade Payable 700
Particulars Debit Particulars Credit Over Draft 800
Owner's Equity 2000 Total Current Liability 1500
Total 0 Total 2000 Total Liability and Owners Equity 4100
Purchase 0
Particulars Debit Particulars Credit
Purchase Goods 4300
Total 4300 Total 0
Trade Payable
Particulars Debit Particulars Credit
Cash at bank 3600 Purchase Goods on credit 4300
Total 3600 Total 4300
Trade Recivable
Particulars Debit Particulars Credit
Sales on Credit 5800 Cash at bank 3200
Total 5800 Total 3200
Sales
Particulars Debit Particulars Credit
Trade Recivable 5800
Total 0 Total 5800
Other Expense
Particulars Debit Particulars Credit
Cash at bank 900
Total 900 Total 0
Asset
Particulars Debit Particulars Credit
Cash at bank 1500
Total 1500 Total 0