Leaving Cert Accounting Tabular Statements: The financial position of Miller

Question

The financial position of Miller Ltd, a grocer, on 01/01/2018 is shown in the following balance sheet:

Balance Sheet as at 01/01/2018:

Fixed Assets

Cost        €           
Dep. to date  €         
Net          €  
Land and buildings   660,000     33,000       627,000  
Delivery vans         85,000      38,000       47,000  
                      745,000      71,000      674,000

Current Assets

Stock                  57,120  
Debtors (less provision 5%)  78,280  
                       135,400

Less creditors: amounts falling due within 1 year

Creditors             64,000  
Bank                   24,000  
Expenses due          7,000   (95,000)

Net                        714,400

Financed by:

Capital and Reserves

Authorised - 800,000 ordinary shares @ €1 each  
Issued - 450,000 ordinary shares @ €1 each  450,000  
Share premium          59,000  
Profit and loss balance 205,400  
                      714,400

The following transactions took place during 2018:

Jan.  Miller Ltd decided to revalue the land and buildings on 01/01/2018 at €800,000.  
    The land element of the new value is €130,000.

Feb.  Miller Ltd bought an adjoining business on 01/02/2018 which included buildings €120,000, delivery vans €35,000, debtors €15,300 and creditors €11,000.  
    The purchase price was discharged by granting the seller 140,000 shares in Miller Ltd at a premium of 30c per share.

Mar.  Management decided that the provision for bad debts should be reduced to 4% of debtors at the end of March.

Received a bank statement at the end of May 2018.

98%

120 rated

Answer

Record the direct debit of €4,800 and the credit transfer of €8,000, impacting current assets and liabilities.

Sept.  A dividend of €840 was received from Piner, a debtor, whose debt had been previously written off and who now wishes to trade with Miller Ltd again.  
    This represents 70% of the original debt and the debtor has undertaken to pay the remaining debt at the end of February 2019.

On the same day, books to the value of €780 were sold on credit to Ryan.  This was a mark-up on cost of 20%.

Dec.  The depreciation charge on buildings for the year is to be 2% of book value.  
    The depreciation charge is to be calculated from date of valuation date onwards as appropriate.  
    The total depreciation charge on delivery vans for the year was €21,000.

Required:

Record on a tabular statement the effect each of the above transactions had on the relevant asset and liability and ascertain the total assets and liabilities on 31/12/2018.

The financial position of Miller Ltd, a grocer, on 01/01/2018 is shown in the following balance sheet: Balance Sheet as at 01/01/2018: Fixed Assets Cost € Dep - Leaving Cert Accounting - Question 4 - 2019

Worked Solution & Example Answer:The financial position of Miller Ltd, a grocer, on 01/01/2018 is shown in the following balance sheet: Balance Sheet as at 01/01/2018: Fixed Assets Cost € Dep - Leaving Cert Accounting - Question 4 - 2019

Jan. Miller Ltd decided to revalue the land and buildings on 01/01/2018 at €800,000.

Feb. Miller Ltd bought an adjoining business on 01/02/2018.

Mar. Management decided that the provision for bad debts should be reduced to 4%.

Received a bank statement at the end of May 2018.

Sept. A dividend of €840 was received from Piner.

On the same day, books to the value of €780 were sold on credit to Ryan.

Dec. The depreciation charge on buildings for the year is to be 2%.

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