Introductory Accounting and Finance

Contents Page

Page 3 ~ Section A – Trading, Profit and loss account for Mr. Stanley

Page 4 ~ Section B – Balance Sheet for Mr. Stanley

Page 5 ~ Section C

Page 6 ~ Section D

Page 7 ~ Section E

Page 8 ~ Section F

Page 9 ~ Section G

Page 10 ~ Section H

Page 11 ~ Bibliography


Trading, Profit & Loss account
for Mr. Stanley relating to trading during January 1st 2002 to December 31st 2002

£ £ £
Sales 125000
Less Cost of Sales
Opening Stock 10430
Add Purchases 67634
78064
Less returns outward 48 78016
Add Carriage Inward 2120
80136
Less Closing Stock 11250 68886
GROSS PROFIT 56114

Less Expenses
Salaries 28400
Postage & Stationary 98
Rent & Rates (2900-860) 2040
Packaging 3217
Bad debt 126
Provision for Bad Debt 60
Insurance 1220
Electricity (953+263) 1216
Depreciation (3000 + 1680) 4680 41057
Carriage Outward 2850 43907
NET PROFIT 12207





This is a balance sheet for Mr. Stanley as at 31st December 2002.
£ £ £
Fixed Assets
Fixtures & Fittings (15,000 + 8,400) 23,400
Less Depreciation (3,000 + 1,680) 4,680
18,720
Current Assets
Stock 11,250
Debtors 3,200
Less Prov.for bad debt 150 3,050

Bank 590
Add Prepayments 860 1,450
Cash 165
15,915
Less Current Liabilities
Creditors 6,765
Accruals 263
Working Capital 7,028 8,887
27,607

Financed By
Capital 25,000
Add Net Profit 12,027

Less Drawings 9,600
27,607



C. Give an explanation of the accounting treatment for invoices that have been unpaid and unrecorded at the date of the preparation of the final accounts.

This is known as an accrual of expenses, an accrual occurs when expenses that have occurred during an accounting period are not included in the trial balance, they are unpaid... [continues]

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