COMPONENTS OF FINANCIAL STATEMENTS CONTENT 7

FORMAT

INCOME STATEMENT
$ $
Sales X
Less Return inwards (Sales returns) (X)
Net Sales X

Less Cost of Sales:

Opening Inventory X
Add purchases X
Less Return outwards (Purchase returns) (X)
X
Add Carriage Inwards X
X
Less Closing Inventory (X)
Cost of Sales (X)

Gross Profit X

Add Revenues: (any other revenue received)

Discount Received X
Rent Received X X
X
Less Expenses
Discount allowed X
Carriage outwards X
Bad debts X
Depreciation expenses X
Salaries X
Insurance X (X)

Net Profit X
2021 3 c SUBIT

Caribbean Eatery
Statement of Comprehensive Income
For the year ended December 31st 2020.
$ $
Sales 56,900

Less Cost of Sales:

Opening Inventory 0
Add Purchases 17,215
Less Return outwards (Purchase returns) (1,585)
15,630
Add Carriage Inwards (Transportation in) 1,295
16,925
Less Closing Inventory Note 1 (2,000)
Cost of Sales (14,925)

Gross Profit 41,975

Add Revenues: (any other revenue received)

Discount Received 1,891
43,866
Less Expenses
Rent Paid 3,600
Electricity 23,000
Insurance 2,460
Telephone (Add accrual/owing) Note 2 [1,230 + 270] 1,500
Cooking Gas Bill 3,500
Water Rates (Minus prepayments) Note 3 [ 4,986 - 1,000] 3,986
Delivery to customers ( carriage out) 1,260
Advertisements 1,684 (40,990)

Net Profit 2,876

Note if the business is in its first year of operation there will be no opening stock or if the business
had sold all its stock at the end of the fiscal year.
2011 6c Page 69

INCOME STATEMENT
$ $
Sales 55,000

Less Cost of Sales:

Opening Stock 18,000
Add Purchases 30,000
48,000
Less Closing Inventory (7,500)
Cost of Sales (40,500)

Gross Profit 14,500

Add Revenues: (any other revenue received)

Profit on sale of plant 4,000
18,500
Less Expenses
Electricity 1,020
Stationery 250
Rent 1,830
Advertising 1,490
Depreciation of motor vehicles 2,000
Insurance 1,090
Sundry expenses 248 (7,928)

Net Profit 10,572

Additional income statement practice questions.

1. SOE owns a retail store. The following information is available for the year ended 31st December 2020.

$
Purchases 75,000
General Expenses 5,000
Return Inwards 3,000
Return Outwards 2,000
Rent 7,000
Sales 145,000
Inventories:
At 31st December 2020 15,000
At 1st January 2020 10,000
Wages 28,000
Carriage inwards 4,000
Carriage outwards 3,000
Discount allowed 1,000
Depreciation on Equipment 2,500
Gain on sale of Equipment 6,000
Prepare an income statement for SOE ending 31st December 2020.

2. Mask owns a retail store. The following information is available for the year ended 31st December 2020.

$
Purchases 105,000
General Expenses 5,000
Return Inwards 2,000
Return Outwards 4,000
General Expenses 26,000
Sales 300,000
Inventories:
At 31st December 2020 6,000
At 1st January 2020 7,000
Interest Received 7,000
Wages 75,000
Carriage inwards 8,000
Carriage outwards 5,000
Discount allowed 1,500
Insurance 9,000
Rent received 14,000
Bad debts 1,000

The following additional information at 31 December 2020 was provided:

1. General expenses were $4,000 accrued.
2. Insurance was $1,000 prepaid
3. Interest received was of $2,000 was due but unpaid.
4. Rennet received was paid $3,000 in advance.
5. Wages was $5,000 accrued.

Prepare an income statement for Mask ending 31st December 2020.

 BALANCE SHEET FORMATS

1. Showing Net Current Assets or Working Capital 2. Showing Total Assets & Equity and Liabilities
$ $ Total Assets $ $
Non-Current Assets (Fixed Assets) Non-Current Assets (Fixed Assets)
Buildings X Buildings X
Fixtures and fittings X Fixtures and fittings X
Equipment X Equipment X
Motor Van X Motor Van X
Total Fixed Assets X Total Fixed Assets X
Current Assets Current Assets
Prepayments X Prepayments X
Stock/Inventory X Stock/Inventory X
Debtors/Accounts receivable X Debtors/Accounts receivable X
Cash X Cash X
Total Current Assets X Total Current Assets X
Less Current Liabilities Total Assets X
Creditors or accounts Payable X
Salaries Payable X Equity and Liabilities
Rent Owing X Opening Capital X
Utilities accrued X Add Net Profit X
Total Current Liabilities X Less Drawings (X)
Working Capital/Net Current Assets X Closing Capital X
X
Less Non-Current Liabilities (long Term) Non-Current Liabilities
Long term Loans (X) Long term Loans X

Capital employed X Current Liabilities

Creditors or accounts Payable X
Financed by : (Equity) Salaries Payable X
Opening Capital X Rent Owing X
Add Net Profit X Utilities accrued X
Less Drawings (X) Total Current Liabilities X
Closing Capital X
Total Equity and Liabilities X
2019 3cii Page 14
Showing Net Current Assets or Working Capital
Country Farmhouse Soy Products
Balance sheet as at December 31, 2018.
$000 $000
Fixed Assets 1,150
Current Assets
Inventories (stock) 500
Trade receivables (debtors) 1,000
Cash at bank and in hand 50
Total Current Assets 1,550
Less Current Liabilities
Trade Payables (Creditors) (800)
Working Capital/Net Current Assets 750
1,900
Less Non-Current Liabilities (long Term)
Trade payables (300)

Capital employed 1,600

Financed by :
Owner’s Equity (Capital) 1,600

OR
cii) Country Farmhouse Soy Products
Balance sheet as at December 31, 2018.
Assets $ $000
Fixed Assets 1,150
Current Assets
Inventories 500
Trade Receivables 1,000
Cash 50
Total Current Assets 1,550
Less Current Liabilities
Trade payables ( 800)
Net current Assets/working capital 750
1900
Less long term liabilities
Trade payables (300)
Capital employed 1,600

Financed By:
Owner’s Equity 1,600
2017 3c Page 32 Balance Sheet or Statement of financial Position
Working capital format.
Beautiful Flowers
Balance Sheet as at December 31, 2016
$ $
Fixed Assets
Buildings 62,660
Equipment 20,000
Total Fixed Assets 82,660
Current Assets
Stock 8,360
Debtors 28,000
Cash 8,500
Total Current Assets 44,860
Less Current Liabilities
Creditors (26,200)
Bank Overdraft (24,720)
Total Current Liabilities (50,920)
Working Capital/Net Current Assets (6,060)
76,600
Less Non-Current Liabilities (long Term)
Long term Loans (0)
Capital employed 76,600

Financed by : (Equity)
Capital 76,600

Or
Beautiful Flowers
Balance Sheet as at December 31, 2016
Assets $ $
Non-Current or Fixed Assets
Buildings 62,660
Equipment 20,000
Total Fixed Assets 82,660
Current Assets
Stock 8,360
Debtors 28,000
Cash 8,500
Total Current Assets 44,860
Total Assets 127,520

Equity and liabilities

Equity
Capital 76,600
Current Liabilities
Creditors 26,200
Bank Overdraft 24,720
Total Current liabilities 50,920
Total Equity and liabilities 127,520
Additional Balance sheet practice questions

1. The following is accounting data of Covid as at December 31st, 2020.

$
Net Profit 24,900
Inventories 18,000
Accounts payable 7,800
Motor Vehicles 44,500
Prepaid rent 700
Bank overdraft 3,500
Furniture and Equipment 21,200
Accounts receivable 11,000
Long term Bank loan 15,000
Owners’ Equity 66,200
Cash 600
Drawings 21,400

Prepare the balance sheet for Covid as at December 31st, 2020.

2. The following is accounting data of Vaccine Ltd as at December 31st, 2020.

$
Motor Vehicle 20,000
Inventories 10,000
Accounts payable 1,600
Land and Buildings 75,000
Bank 2,000
Accumulated depreciation on Motor Vehicle 5,000
Machinery 15,000
Trade receivable 3,000
Long term Bank loan 12,000
Share Capital 80,000
Cash 1,500
Retained Profit 21,900
Accumulated depreciation on Machinery 2,000
Salaries owing 4,000

Prepare the balance sheet for Vaccine Ltd as at December 31st, 2020.
Solution.

Three Diamonds Music Store

Statement of Comprehensive Income
For the year ended August 31st 2018.
$ $
Revenue 410,960

Less Cost of Sales:

Opening Inventory 38,750
Add Purchases 284,300
Less Return outwards (Purchase returns) (-0-)
Add Carriage Inwards (Transportation in) 1190 285,490
324,240
Less Closing Inventory Note 1 (34,330)
Cost of Sales (289,910)

Gross Profit 121,050

Add Revenues: (any other revenue received)

Rent Received Note 4 (4170 – 170) 4,000

Less Expenses
Discount allowed 320
General Expenses Note 2 (4,480 – 440) 4,040
Insurance Note 3 (7,440 – 210) 7,230
Wages Note 5 (36,430 + 560) 36,990 (48,580)

Net Profit 76,470

Using the working capital format.
Three Diamonds Music Store
Balance Sheet as at August 31, 2018
Assets $ $000
Noncurrent Assets 375,000
Current Assets
Prepayments (Note 2 and 3) 440 + 210 650
Inventory Note 1 34,330
Accounts receivable 4,520
Total Current Assets 39,500
Less Current Liabilities
Accounts payable (3,310)
Accrued wages Note 5 (560)
Rent income paid in advance (unearned) Note 4 (170)
Bank Overdraft (2,380)
Total Current liabilities (6,420)
Working capital 33,080
408,080
Less Non Current liabilities

Capital employed

Financed By:
Opening Capital 370,360
Add Net profit 76,470
446,830
Less Drawings (38,750) 408,080

OR

Three Diamonds Music Store

Balance Sheet as at August 31, 2018
Assets $ $
Non-Current Assets 375,000
Current Assets
Prepayments 650
Inventory 34,330
Accounts receivable 4,520
Total Current Assets 39,500
Total Assets 414,500

Equity and liabilities

Equity
Opening Capital 370,360
Add Net profit 76,470
446,830
Less Drawings (38,750) 408,080
Current Liabilities
Accounts payable (3,310)
Accrued wages (560)
Rent income paid in advance (unearned) (170)
Bank Overdraft (2,380)
Total Current liabilities (6,420)
Total Equity and liabilities 414,500