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Tabular Statement The following Balance Sheet shows the financial position of a sole trader, M - Leaving Cert Accounting - Question 2 - 2005
Question 2
Tabular Statement The following Balance Sheet shows the financial position of a sole trader, M. Lyons, as at November 1" 2004. Balance Sheet as at November 1" 2004... show full transcript
Worked Solution & Example Answer:Tabular Statement The following Balance Sheet shows the financial position of a sole trader, M - Leaving Cert Accounting - Question 2 - 2005
Step 1
Step 2
Step 3
A special charge was created at the beginning of the month.
Answer
Assuming a special charge affects liabilities directly, it should be noted but without a specific amount given here, we'll leave it unchanged in the total.
- No direct impact on the tabular statement; the specific impact will be clarified below.
Step 4
Paid a creditor’s account balance of €2,100 and received a discount of €100.
Answer
This reduces both creditors and the cash or bank balance from discount received.
- Creditors: €33,400 - €2,100 = €31,300
- Debtors are unaffected, but cash may be decreased by an additional charge if accounted.
Step 5
Purchased equipment for €800. A deposit of €1,200 was paid by cheque and the other €700 was returned from a private creditor.
Answer
The equipment increases assets, while the creditor repayment decreases liabilities. Here we include equipment as well as adjusting creditors.
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Equipment: €80,000 + €800 = €80,800
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Cash/Bank decreases by €1,200, and Creditors decrease by €700.
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Cash: €9,800 - €1,200 = €8,600
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Creditors: €31,300 - €700 = €30,600
Step 6
Step 7
Received a debtor who declared bankrupt and paid 50c in the euro.
Answer
This would lead to a complete write-off of the affected debtor amount, calculated accordingly as the proportional asset loss based on initial debt amounts.
- Debtors are decreased significantly, alongside stock adjustments, typically for practical balance handling in future calculations.