From a trial balance to a set of accounts
Take a trial balance and three year-end notes all the way to the profit for the year and the net assets.
In this room: 3 tasks, 10 questions
- The trial balance and the notes4 questions
- The adjustments and the profit for the year4 questions
- The statement of financial position2 questions
A set of accounts starts from the trial balance. Income and expense balances go to the statement of profit or loss. Assets, liabilities, capital and drawings go to the statement of financial position.
| Account | Debit | Credit |
|---|---|---|
| Sales | 96,000.00 | |
| Sales returns | 1,000.00 | |
| Inventory at 1 April | 8,000.00 | |
| Purchases | 54,000.00 | |
| Purchases returns | 1,500.00 | |
| Carriage inwards | 500.00 | |
| Wages | 18,000.00 | |
| Rent | 6,000.00 | |
| Electricity | 2,000.00 | |
| Carriage outwards | 600.00 | |
| Shop fittings at cost | 12,000.00 | |
| Accumulated depreciation on shop fittings | 2,000.00 | |
| Trade receivables | 4,000.00 | |
| Bank | 3,000.00 | |
| Trade payables | 4,600.00 | |
| Bank loan, repayable in five years | 4,000.00 | |
| Capital at 1 April | 11,000.00 | |
| Drawings | 10,000.00 | |
| Totals | 119,100.00 | 119,100.00 |
Three notes come with the trial balance. They are not in its figures yet.
- Inventory at 31 March is £9,000
- Depreciation of £2,000 is to be charged on the shop fittings
- Electricity of £400 is owed at 31 March
Answer the questions below
3 more questions follow in this task.
Each note is an adjustment with two sides. Depreciation is a debit to the depreciation charge and a credit to accumulated depreciation. An amount owed is a debit to the expense and a credit to accruals.
| Expense | £ |
|---|---|
| Wages | 18,000.00 |
| Rent | 6,000.00 |
| Electricity | 2,000.00 |
| Carriage outwards | 600.00 |
The notes say that depreciation of £2,000 is to be charged and that electricity of £400 is owed. Gross profit is £43,000.
Answer the questions below
3 more questions follow in this task.
The balances that are left make the statement of financial position. The adjustments change them too.
- Accumulated depreciation goes up by this year's charge of £2,000
- Inventory at 31 March, £9,000, is a current asset
- The electricity owed, £400, is an accrual: a current liability
| Account | Debit | Credit |
|---|---|---|
| Shop fittings at cost | 12,000.00 | |
| Accumulated depreciation on shop fittings | 2,000.00 | |
| Trade receivables | 4,000.00 | |
| Bank | 3,000.00 | |
| Trade payables | 4,600.00 | |
| Bank loan, repayable in five years | 4,000.00 | |
| Capital at 1 April | 11,000.00 | |
| Drawings | 10,000.00 |
Net assets are non-current assets, plus current assets, less all the liabilities. They must equal the closing capital.
Answer the questions below
1 more question follows in this task.