QUESTION 1 The following extracts of financial transactions were taken from the Coco Bean. You have been requested by the company accountant to produce relevant book keeping entries for each of the financial transactions provided below. Use an excel spreadsheet if needed to answer the question. Coco Bean Financial Position Statement as at 31 December 2019 Land 50,000 15,000 Motor Van I (cost) Accumulated Depreciation (3,000) 12,000 8,500 Inventories Trade Receivables Prepayment: 11,000 Rates 1,000 Water 200 Cash 25,000 Total Assets 107,700 50,000 Capital Retained Earnings 38,700 Bank Loan 11,000 7,500 Trade payables Accrued Expense Rent 500 107.700 Total Equity and Liabilities BUS021 (2021) Page 3 1. The owners withdraw capital in the form of cash 10,000. 2. Water bill for the year 1,200 and the owner paid 1,000 in cash at the end of the financial year. 3. Inventories totalling 65,000 was purchased on credit. 4. Inventories totalling 25,000 was purchased for cash. 5. Credit sales revenue during the year total 50,000 (cost 35,000). 6. Cash sales revenue during the year total 100,000 (cost 50,000). 7. The annual rent for the building is 12,000 in 2020. However, the company made a cash payment of 12,500 towards the rent account for the year and additionally pre-paid another 500 towards the rent for 2021. 8. Rates on the premises were paid in cash during the year as follows: for the period 1 April 2020 to 31 March 2021 was 2,400. 9. Receipts from trade receivables total 45,000. 10.A new Delivery Van was bought for cash during the year for 15,000 and the expected lifetime of this fixed asset 5 years. 11. Payments to trade payables total 60,000. 12. During the year total wages 12,000 was paid in cash however at the end of the year, the business found out 2,000 of wages for the last week of the year was not paid. 13. Bank Loan of 11,000 full amount paid back during the year. 14. The owner brought in a machine for 10,000 to the business and the expected lifetime of the machine 5 years. 15. The short-term loan 6,000 received were deposited in the business bank account. Note: Use the straight-line depreciation method for all non-current assets (fixed assets) You are required to: Draw up Coco Bean Income Statement (15 marks) and Financial Position (Balance Sheet) as at 31 December 2020 (20 marks) You are also required to provide calculation details of each of the financial transactions mentioned in the notes above maintaining a systematic accounting narrative for the year ending 31 December 2020 (25 marks). You may use a spreadsheet model or follow the traditional double entry method of calculation. Marks will be deducted in case only the financial statements are provided without relevant explanations, [Total Marks 60)
