CMI0250 Flnunclul Accounllng

TA uioup
Li Sze Nan Sanuy 99
LumBiu Tung Bilua 9
Slngle Lnlry &
Incomplele Records
ul ure ley!
^ o full uouble-entiy system
^ Bo not iecoiu all tiansactions
^ Neiely keep a cash book anu some iecoius
of its:
_ ieceipts anu payments
_ fixeu assets, stocks, uebtois, piepayments
_ cieuitois, acciuals, anu long-teim liabilities

orklngs
^ iepaie Bebtois' Contiol Account anu Cieuitois' Contiol
Account to finu out net cieuit sales anu net cieuit
puichases iespectively
^ Finu out total sales by auuing cash sales anu cieuit sales
^ Finu out total puichases by auuing cash puichases anu
cieuit puichases, minus uiawings if available.
^ Calculate chaigesincome to piofit anu loss account
(e.g., piovision foi bau uebt, uepieciation, gainloss on
sale of fix asset, etc)

orklngs
^ iepayment anu acciuals aujustment
^ If capital at the beginning of financial yeai is not given
oi pioviueu, use accounting equation to finu it out
Assets = Capital + Liabilities
^ If necessaiy, piepaie a cash book summaiy fiom bank
statements to figuie out the bank balance at the enu of
financial yeai

"I9.3
^ ane uiimes, ietail fiuit anu vegetable
meichant, uoes not keep a full set of
accounting iecoius.
^ Task:
(a) iepaie ane uiime's Tiauing anu iofit anu
Loss account foi the yeai enueu August X8
(b) iepaie ane uiime's Balance Sheet as at
August X8

lven Informullon

() Bank Summaiy
8ank

1 Sep 20x7 balance broughL
forward 1970 aymenL Lo suppller 72000
8ecelpL from Lrade debLors 96000 urchases of moLor van (L471 k88) 13000
Sale of rlvaLe yachL 20000 8enL and 8aLes 2600
Sale of MoLor van (A123 8WA) 2100 Wages 13100
MoLor vehlcles expenses 3330
osLage and sLaLlonery 1360
urawlngs 9200
8epalrs and renewals 630
lnsurance 800
31 Aug 20x8 balance carrled forward 2010
120070 120070
lven Informullon
{] Assets and liabilities, otber tban balance at bank
As at Sep X Aug X8

Tiaue Cieuitois , ,9
Tiaue Bebtois , 9,
Rent anu iates acciuals
Notoi vans:
A BWA - At cost , ---
iovision foi uepieciation 8, ---
E KBR - At cost ---
iovision foi uepieciation --- To be calculateu
Inventoiy ,9 ,9
Insuiance piepaiu

lven Informullon
() All ieceipts aie bankeu anu all payments aie maue fiom the
business bank account
() A tiaue uebt of owing by etei Blunt anu incluueu in the
tiaue uebtois at Aug X8 is to be wiitten off as bau uebt
() It is ane uiime's policy to pioviue uepieciation at the iate of
% on the cost of motoi vans helu at the enu of each financial
yeai; no uepieciation is pioviueu in the yeai of sale oi uisposal
of motoi van
()Biscount ieceiveu uuiing the yeai enueu Aug X8 fiom
tiaue cieuitois amounteu ,
8
Culculullon of Sules (orklngs #I)
Fiom the bank summaiy anu assets anu liabilities table, we know that:
_ Receipt fiom tiaue uebtois: 9,
_ 0pening balance of tiaue uebtois: ,
_ Closing balance of tiaue uebtois: 9,
Infoimation
A tiaue uebt of owing by etei Blunt anu incluueu in the tiaue
uebtois at Aug X8 is to be wiitten off as bau uebt
we know that:
_ Bau Bebt is
_ et Tiaue Bebtois at Aug X8 = 9, - = 9,
By using these infoimation, we can piepaie a uebtois contiol account
to figuie out amount of cieuit sales
9
Culculullon of Sules (orklngs #I)

uebLors ConLrol AccounL

20x7 20x8
1 Sep 8alance b/d 7320 31 Aug 8ank 96000
20x8
31 Aug neL Sales 98180 31 Aug 8ad uebL 300
31 Aug 8alance c/d (9300300) 9200
103300 103300
et cieuit sales = 98,8
Infoimation
All ieceipts aie bankeu anu all payments aie maue fiom the business bank
account
Fiom this infoimation anu bank summaiy, we know that theie was Z[US__SW_
Bence, total sales = 98,8
Culculullon of Purcuses (orklngs #2)
Fiom the bank summaiy anu Assets anu Liabilities table, we know that:
_ ayment to supplieis: ,
_ 0pening balance of tiaue cieuitois : ,
_ Closing balance of tiaue cieuitois : ,9
Infoimation
Biscount ieceiveu uuiing the yeai enueu Aug X8 fiom tiaue
cieuitois amounteu ,
We know that: Biscount ieceiveu = ,
By using these infoimation, we can now piepaie a cieuitois contiol
account to figuie out amount of cieuit puichases

Culculullon of Purcuses (orklngs #2)

CredlLors ConLrol AccounL

20x8 20x7
31Aug ulscounL recelved 1000 1 Sep 8alance b/d 4700
31 Aug 8ank 72000
20x8
31Aug neL purchases 70890
31 Aug 8alance c/d 2390
73390 73390
et cieuit puichases = ,89
Infoimation
All ieceipts aie bankeu anu all payments aie maue fiom the business
bank account
Fiom this infoimation anu bank summaiy, we know that theie was
Z[US_\a^US_W_
Bence, total puichases = ,89
lsposul - Molor Vuns (orklngs #3)
Fiom bank summaiy, we know that ane solu a motoi van
(A BWA) foi
Fiom Assets anu Liabilities table, we know that:
_ Cost of motoi van (A BWA) = ,
_ iovision foi uepieciation at Sep X = 8,
Infoimation
It is ane uiime's policy to pioviue uepieciation at the iate of % on
the cost of motoi vans helu at the enu of each financial yeai; no
uepieciation is pioviueu in the yeai of sale oi uisposal of motoi van
Bence, amount of piovision foi uepieciation tiansfeiieu to uisposal
account is 8,

lsposul - Molor Vuns (orklngs #3)

ulsposal MoLor vans

20x8 20x8
31 Aug MoLor van (A123 8WA) 10000 31 Aug rovlslon for uepreclaLlon 8000
31 Aug roflL Loss AccounL 100 31 Aug 8ank 2100
10100 10100
iofit on sale of motoi van =
epreclullon (orklngs #4)
Fiom bank summaiy, we know that ane spent , to buy a
new motoi van (E KBR)
Infoimation
It is ane uiime's policy to pioviue uepieciation at the iate of
% on the cost of motoi vans helu at the enu of each financial
yeai; no uepieciation is pioviueu in the yeai of sale oi uisposal
of motoi van.
Since she solu motoi van A BWA,
cost of motoi vans at Aug X8 = ,
Bepieciation of motoi van = , x % = ,

Accruuls & Prepuymenl (orklngs #5 & 6)

Fiom Assets anu Liabilities table,
Rent anu iates acciuals at Sep X =
Rent anu iates acciuals at Sep X8 =
Insuiance piepaiu at Sep X =
Insuiance piepaiu at Sep X8 =
Fiom Bank Summaiy,
We know ane paiu foi ient anu iates anu
8 foi insuiance

Accruuls & Prepuymenl (orklngs #5 & 6)

Woikings
Rent anu iates foi the financial yeai enueu
Aug X8
= , - +
= ,
Woikings
Insuiance foi the financial yeai enueu
Aug X8
= 8 + -
=

Culculullon of Cupllul ul I Sep 20X7 (orklngs #7)

^ Capital at Sep X is not given in the infoimation
^ We can calculate them by using Accounting Equation:
^ Assets = Capital + Liabilities
=> Capital = Assets - Liabilities
Fiom bank summaiy, we know the bank balance at Sep
X is 9
Fiom Assets anu Liabilities table, we know all othei assets
anu liabilities infoimation at Sep X
8
CalculaLlon of CaplLal aL 1 Sep 20x7
1oLal AsseLs
MoLor van 10000
Less rovlslon for uepreclaLlon 8000 2000
lnvenLory 4900
1rade uebLors 7320
lnsurance repald 160
8ank 1970 16330
Less 1oLal LlablllLles
1rade CredlLors 4700
8enL and 8aLes Accruals 200 4900
CaplLal aL 1 Sep 20x7 11430
9
Cupllul Inlroduced
^ ane is a ietail fiuit anu vegetable meichant
^ Bowevei, fiom bank summaiy, we know that ane
bankeu the income of sale of piivate yacht to business
bank account, amounted ,.
^ This income is 0T ielateu to hei fiuit anu vegetable
business
_ Shoulu 0T be tieateu as income in iofit anu Loss
account
_ Shoulu be tieateu as capital intiouuceu anu stateu in
balance sheet

ane Crlme
1radlng and roflL and Loss AccounL for Lhe year ended 31 Aug 20x8

Sales (Worklngs #1) 98180
Less CosL of goods sold
Cpenlng lnvenLory 4900
Add urchases (Worklngs #2) 70890
73790
Less Closlng lnvenLory 3900 69890
Cross roflL 28290
Add ulscounL recelved 1000
roflL on sale of moLor van (Worklng #3) 100 1100
29390
Less Lxpenses
uepreclaLlon on MoLor van (Worklngs #4) 2600
8enL and raLes (Worklngs #3) 2660
Wages 13100
MoLor vehlcles expenses 3330
osLage and sLaLlonery 1360
8epalrs and renewals 630
lnsurance (Worklngs #6) 760
8ad debL 300 26780
neL proflL for Lhe year 2610

ane Crlme
8alance SheeL as aL 31 Aug 20x8
llxed AsseLs
MoLor vans 13000
Less rovlslon for depreclaLlon 2600 10400
CurrenL AsseLs
lnvenLory 3900
uebLors (9300300) 9200
lnsurance prepald 200
8ank 2010
17310
Less CurrenL LlablllLles
CredlLors 2390
8enL and raLes accruals 260 2830
neL CurrenL AsseLs 14460
neL AsseLs 24860
CaplLal
8alance aL 1 Sep 20x7 (Worklngs #7) 11430
Add CaplLal lnLroduced 20000
neL roflL for Lhe year 2610
34000
Less urawlngs 9200
8alance aL 31 Aug 20x8 24860

"I9.4
Task
^ iepaie A.Fok's tiauing anu piofit anu loss
account foi the yeai enueu uly X9
^ iepaie A.Fok's balance sheet at uly
X9

lven Informullon

A lok
8alance SheeL as aL 31 uly 20x8

lreehold land and bulldlngs (aL cosL) 33000 CaplLal 48480
llxLures and flLLlngs (cosL $10000) 3800 CredlLors 3220
lnvenLory 3300 LlecLrlclLy accrued 60
uebLors 6340
8ank 3000
1elephone prepald 120
33760 33760
lven Informullon
The only book kept by A.Fok in which all tiansactions passeu thiough
the bank account aie iecoiueu. The following is a summaiy of the cash
book foi the yeai enueu uly X9:

Cash 8ook(8ank)

8alance b/d 3000 Wages 3640
Cash Laklngs banked 18920 1elephone 280
Cheques from debLors 31860 LlecLrlclLy 370
AddlLlonal CaplLal 1000 MoLor expenses 1810
aymenLs Lo credlLors 33360
rlnLlng 360
urchases 4300
8alance c/d 8260
34780 34780
lven Informullon
Fiom suppoiting uocuments, it has been asceitaineu that:
(i) The following amounts have been paiu fiom cash takings
befoie they weie bankeu:

Biawings ,
uichases ,
Cai iepaiis 98
Winuow cleaning
(ii) Inventoiy at uly X9 was valueu at 9
lven Informullon
(iii)At uly X9, theie aie telephone chaiges piepaiu of anu
electiicity acciueu of 9
(iv) Tiaue uebtois anu tiaue cieuitois outstanuing at the enu of the
yeai aie 8 anu , iespectively
(v) Fok has taken goous out of the business foi his own use that cost

(vi) Fixtuies anu fittings have been uepieciateu in past yeais at

%pei annum by the ieuucing balance methou.
o uepieciation is to be pioviueu foi fieeholu lanu anu builuings

Culculullon of Sules (vorklngs #I)

Fiom the balance sheet at uly X8, summaiy of cash
book anu infoimation (iv), we know that:
_ 0pening balance of uebtois: ,
_ Cheques fiom uebtois: ,8
_ Closing balance of uebtois: ,8
By using these infoimation, we can now piepaie a uebtois
contiol account to figuie out amount of
cieuit sales
8
Culculullon of Sules (vorklngs #I)
uebLors ConLrol AccounL
20x8 20x9
1 Aug 8alance b/d 6340 31 uly 8ank 31860
20x9
31 uly neL sales 31160 31 uly 8alance c/d 3840
37700 37700
9
et cieuit sales = ,
Culculullon of Sules (vorklngs #I)
Infoimation(i)
The following amounts have been paiu fiom cash takings
befoie they weie bankeu:

Biawings ,
uichases ,
Cai iepaiis 98
Winuow cleaning
Cash Sales = 8,9 +, + , + 98 +
= ,9
Total Sales = Cieuit Sales + Cash sales
= , + ,9
= ,
Culculullon of Purcuses (vorklngs #2)
Fiom the balance sheet at uly X8, summaiy of cash
book anu infoimation (iv), we know that:
_ 0pening balance of cieuitois: ,
_ ayment to cieuitois: ,
_ Closing balance of cieuitois: ,
By using these infoimation, we can now piepaie a
cieuitois contiol account to figuie out amount of
cieuit puichases

Culculullon of Purcuses (vorklngs #2)

CredlLors ConLrol AccounL

20x9 $ 20x8 $
31 uly 8ank 33360 1 Aug 8alance b/d 3220
31 uly 8alance c/d 3720
20x9
31 uly neL purchases 33860
39080 39080
et cieuit puichases = ,8
Culculullon of Purcuses (vorklngs #2)
Fiom cash book summaiy, we know that A.Fok paiu a cheque
amounteu , foi puichases
Fiom infoimation (i),
we know that pait of the cash takings amounteu , was useu foi
cash puichases
Cash puichases = , + , = ,
Fiom infoimation (v),
we know that Fok has taken goous out of the business foi his own use
that cost
Biawings:
Total puichases = et cieuit puichases + Cash puichases - Biawings
= ,8 + , -
= 8,9

Accruuls und Prepuymenls (vorklngs #3 & 4)

Fiom Balance Sheet at uly X8, we know that:
_ Telephone piepaiu at uly X8:
_ Electiicity acciueu at uly X8:
Fiom cash book summaiy at uly X9, we know A. Fok
paiu 8 foi telephone anu foi electiicity
Infoimation(iii)
At uly X9, theie aie telephone chaiges piepaiu of
anu electiicity acciueu of 9

Accruuls und Prepuymenls (vorklngs #3 & 4)

Woikings
Telephone foi the financial yeai enueu uly X9
= 8 + -
=
Woikings
Electiicity foi the financial yeai enueu uly X9
= - + 9
=

epreclullon (vorklngs #5)

Fiom balance sheet at uly X8,
et book value of fixtuies anu fittings: ,8
Infoimation(vi)
Fixtuies anu fittings have been uepieciateu in past yeais at
% per unnum by the reJuclng bulunce methoJ
Bepieciation of fixtuies anu fittings foi the yeai enueu
uly X9
= ,8 x % = ,
o uepieciation is to be pioviueu foi fieeholu lanu anu
builuings

A lok
1radlng and roflL and Loss AccounL for Lhe year ended 31 uly 20x9
$ $
Sales (Worklngs #1) 36330
Less CosL of goods sold
Cpenlng lnvenLory 3300
Add urchases (Worklngs #2) 38930
42230
Less Closlng lnvenLory 3920 38330
Cross roflL 18020
Less Lxpenses
Wages 3640
1elephone (Worklngs #3) 260
LlecLrlclLy (Worklngs #4) 600
MoLor expenses 1810
rlnLlng 360
uepreclaLlon on flxLures and flLLlngs (Worklngs #3) 1160
Car repalrs 980
Wlndow cleanlng 170 11180
neL proflL for Lhe year 6840

8
A lok
8alance SheeL as aL 31 uly 20x9
llxed AsseLs $ $ $
lreehold land and bulldlng 33000
llxLures and flLLlngs 10000
Less rovlslon for depreclaLlon (100003800+1160) 3360 4640 39640
CurrenL AsseLs
lnvenLory 3920
uebLors 3840
1elephone charges prepald 140
8ank 8260
18160
Less CurrenL LlablllLles
CredlLors 3720
LlecLrlclLy accrued 290 6010
neL CurrenL AsseLs 12130
neL AsseLs 31790
CaplLal
8alance aL 31 uly 20x8 48480
Add CaplLal lnLroduced 1000
neL roflL for Lhe year 6840
36320
Less urawlngs (4000+330) 4330
8alance aL 31 uly 20x9 31790
9