exercise_8

Exercise_8 - MA826 FINANCE AND FINANCIAL REPORTING EXERCISE 8 1 The following balance sheet relates to the affairs of Columbus who works for the

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MA826 FINANCE AND FINANCIAL REPORTING EXERCISE 8 1. The following balance sheet relates to the affairs of Columbus who works for the government and also buys, repairs and sells second- hand cars. The balance sheet of his second hand car business is as follows: Balance sheet at 31 December 19X1 £ £ £ Fixed assets 2,000 Capital 6,500 Current assets Current liabilities Stock of cars 3,700 Trade creditors 200 Debtors 1,000 4,700 6,700 6,700 Transactions undertaken in January 19X2: 1. Columbus collects the £1000 owing in respect of the second hand car sold in December 19X1. 2. Columbus wins £500 on the football pools and pays the proceeds into his business bank account. 3. Columbus sells for £1200 a car that was in stock on December 19X1 at a value of £1300. 4. Columbus withdraws £50 for private use. 5. Columbus purchases a friend’s car for £150, and promises to pay him in February. 6. Columbus purchases a new machine for £700 and pays in cash.
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This note was uploaded on 06/07/2011 for the course MA 826 taught by Professor Loba,millet during the Spring '11 term at Kent Uni..

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Exercise_8 - MA826 FINANCE AND FINANCIAL REPORTING EXERCISE 8 1 The following balance sheet relates to the affairs of Columbus who works for the

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