The statement of financial position for a sole trader
Assets, liabilities and capital at one date. Sort the balances under their headings and work down to net assets.
In this room: 3 tasks, 10 questions
- What goes under each heading4 questions
- Carrying amount and net current assets3 questions
- Net assets3 questions
The statement of financial position lists what the business owns and owes at one date. Its heading reads: as at 31 March.
- Non-current assets
- assets kept for more than a year, such as shop fittings
- Current assets
- inventory, trade receivables, bank and cash: assets that turn into cash within a year
- Current liabilities
- amounts due within a year, such as trade payables and accruals
- Non-current liabilities
- amounts due after more than a year, such as a long bank loan
Answer the questions below
3 more questions follow in this task.
Non-current assets are shown at carrying amount: cost less accumulated depreciation, which is all the depreciation charged so far.
Net current assets are current assets less current liabilities.
| Balance | £ |
|---|---|
| Shop fittings at cost | 12,000.00 |
| Accumulated depreciation on shop fittings | 4,000.00 |
| Inventory | 9,000.00 |
| Trade receivables | 4,000.00 |
| Bank | 3,000.00 |
| Trade payables | 4,600.00 |
| Accruals | 400.00 |
| Bank loan, repayable in five years | 4,000.00 |
Answer the questions below
2 more questions follow in this task.
Net assets are all the assets less all the liabilities. Start with non-current assets, add net current assets, then take away non-current liabilities.
For Marlow Cycles the carrying amount of the shop fittings is £8,000, net current assets are £11,000 and the bank loan is £4,000.
Net assets always equal the owner's capital. That is the accounting equation: assets less liabilities equals capital.
Answer the questions below
2 more questions follow in this task.