ACF100 2017 Michaelmas test solutions.pdf

ACF100 2017 Michaelmas test solutions.pdf - ACF 100 TEST...

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1 ACF 100 TEST WEDNESDAY 6 TH DECEMBER 2017: SOLUTIONS QUESTION 1 Tay Stebites is a sole trader with a cake production company. She prepares her financial statements on 30 September. At 30 September 2017, she had the following trial balance: You are given the following additional information for which no adjustments have yet been made to the trial balance above: Closing inventory at 30 September 2017 is £16,200. Depreciation is to be charged on a reducing balance basis of 20% per year with no residual value. On 30 September 2017, Tay brought her family car, valued at £8,000 into the business. No depreciation is to be charged on this during the year. No adjustment has been made for receivables found to be irrecoverable during the year. of £2,200. In addition, a collective doubtful debt provision of 5% is to be made at 30 September 2017 (no individual provision is required). A new insurance policy for which Tay paid £1,600 in advance when it started on 1 January 2017. The policy will cover the year to 31 December 2017. No telephone bill for September 2017 has been received yet. The bill is expected to be £250. The loan is due for repayment in March 2020. The figure in the trial balance for loan repayments includes £900 interest. The adjustments above do not require any adjustments to the bank/cash figure. REQUIRED (a) Produce the statement of profit or loss (income statement) for Tay Stebites for the year ended 30 September 2017 and a statement of financial position (balance sheet) as at the same date. Use appropriate headings and show your workings. (b) Comment briefly on your treatment of Tay’s family car in the financial statements.
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  • Spring '16
  • talib
  • Balance Sheet, Expense, Generally Accepted Accounting Principles, net realisable value, Tay Stebites

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