Leaving Cert Accounting Tabular Statements: The financial position of Delane

Question

The financial position of Delaney Ltd on 01/01/2016 is shown in the following balance sheet:

Balance Sheet as at 01/01/2016:

| Assets                      | €      |
|----------------------------|--------|
| Fixed Assets               |        |
| Land and buildings         | 630,000|
| Vehicles                   | 15,000 |
| Equipment                  | 15,000 |
| Less: Dep. (25,000 + 3,000 + 3,000)| (31,000)|
| Net                        | 614,000|
| Current Assets             |        |
| Stock                      | 73,000 |
| Debtors (less provision 4%)| 86,400 |
| Less Creditors: amounts falling due within 1 year |        |
| Creditors                  | (59,000)|
| Bank                       | (32,000)|
| VAT                        | (8,400) |
| Expenses due               | (6,000) |
| Total Assets               | 699,000 |

Financed by:

The following transactions took place during 2016:

**Jan**
Delaney Ltd decided to revalue land and buildings on 01/01/2016 at €800,000. The land element of the new value is €110,000.

**Feb**
Delaney Ltd bought an adjoining business on 01/02/2016 which included buildings €180,000, equipment €50,000, debtors €12,000 and creditors €20,000. The purchase price was discharged by granting the seller 200,000 shares in Delaney Ltd at a premium of 20 per share.

**Mar**
Management decided that the provision for bad debts should be increased to 6% of debtors at the end of March.

**April**
Purchased goods on credit for €14,760. This included VAT of 23%.

**June**
Received a bank statement on June 30 showing a credit transfer received of €7,200 to cover 8 month's rent received in advance and in credit of €4,800 to cover security costs (for the year ended 30/04/2016).

**July**
Paid by a creditor account balance of €1,800 and received a discount of €100.

**Aug**
A payment of €900 was received from J. Barry, a debtor, whose debt had been previously written off. This represents 60% of the original debt and Barry has undertaken to pay the remainder of the debt.

On the same day goods to the value of €369 were sold on credit to Barry. This includes 23% VAT and a mark-up on cost of 20%.

**Oct**
Received €5,000 from the issue of the remaining shares.

**Dec**
Goods previously sold for €738 by Delaney Ltd were returned. This figure includes VAT at 23% and a mark-up on cost of 20%. Delaney Ltd issued a credit note for €700 due to a delay in returning these goods.

A creditor who was owed €4,000 by Delaney Ltd, accepted equipment, the book value of which was €3,200, in full settlement of the debt. The equipment cost €5,400.

The buildings depreciation charge for the year is 2% of book value.

97%

121 rated

Answer

Calculate and record the depreciation for the buildings at €8,000.

Required:
Record a tabular statement the effect of each of the above transactions and the relevant asset and liability and ascertain the total assets and liabilities on 31/12/2016.

Delaney Ltd decided to revalue land and buildings on 01/01/2016 at €800,000. The land element of the new value is €110,000.

Delaney Ltd bought an adjoining business on 01/02/2016 which included buildings €180,000, equipment €50,000, debtors €12,000 and creditors €20,000.

Management decided that the provision for bad debts should be increased to 6% of debtors at the end of March.

Purchased goods on credit for €14,760. This included VAT of 23%.

Received a bank statement on June 30 showing a credit transfer received of €7,200 to cover 8 month's rent received in advance.

Paid by a creditor account balance of €1,800 and received a discount of €100.

A payment of €900 was received from J. Barry, a debtor, whose debt had been previously written off.

On the same day goods to the value of €369 were sold on credit to Barry.

Received €5,000 from the issue of the remaining shares.

Goods previously sold for €738 by Delaney Ltd were returned.

A creditor who was owed €4,000 by Delaney Ltd accepted equipment, the book value of which was €3,200, in full settlement of the debt.

The buildings depreciation charge for the year is 2% of book value.

Join the Leaving Cert students using SimpleStudy...