Business Studies

Topics: Accounts receivable, Balance sheet, Accounts payable Pages: 4 (686 words) Published: March 23, 2013

Financial AccountsThe Assignment

Liam O’Brady owns a business selling musical instruments. The following trial balance has been extracted from the books of account at 31 October 2012.


Bank balance19281

Capital balance as at 1 November 201161489

Carriage inwards480

Carriage outwards2110



Fixtures and fittings – at cost62200

Fixtures and fitting – provision for depreciation27990

General expenses7436


Purchases and sales129745206543

Rent and rates10926


Inventory at 1 November 201148560

Accounts receivable and payable1128516407

Wages and salaries29551


Additional information:

W ages owing to employees at the period end amounted to £830.

The accountants invoice for preparing the full accounts is expected to be £720

Liam plays drums as a hobby. During the year, he took various items from the business for his own use. The items had a cost price of £1760

The landlord charges a total of £8000 per annum and the local authority levies rates at £2400 per annum.

Included in Accounts Receivable is an invoiced amount of £207. This has been outstanding for almost 12 months, and Liam accepts that it will not be paid. He also anticipates that 5% of the Accounts Receivable balance might not be paid. He thinks that provision should be made for this now.

Liam has recently discovered a small number of invoices which he paid for with his personal credit. Card. They total £642 and are mostly for materials used to repair the shop counter.

Depreciation is to be provided on fixtures and fittings at 20% per annum using the straight line basis.

During the year, Liam purchased a light van for £4200. This is to be included in the business and...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay about Business Model
  • Sample Business Plan Essay
  • Business Studies Notes Year 11 Essay
  • Business Accouting Essay
  • Business Plan Essay
  • Laundry Shop- Business plan Essay
  • Business Entity Concept Essay
  • Balance Sheet and Potential Related Business Essay

Become a StudyMode Member

Sign Up - It's Free