Question
Question 2 Outline the situations where incomplete record techniques will be required to produce a set of financial statements. 3 Marks On 1 January 2016,
Question 2
Outline the situations where incomplete record techniques will be required to produce a set of financial statements.
3 Marks
On 1 January 2016, P. Jones a sole trader owned a business, that had the following assets and liabilities:
K
Motor vehicles 124,125
Accumulated depreciation on motor vehicles 21,030
Premises 450,000
Receivables 119,250
Allowances for receivables 2,100
Payables 96,000
Accruals 9,750 Inventory 33,400 Prepayments 780
Bank overdraft 11,415 Cash on hand 110
Term loan 210,000
You are required to:
Calculate the proprietors capital as at 1 January 2016.
7 Marks
In brief, outline your understanding of why the incomplete record technique used in part
(i) will give the proprietors opening capital.
2 Marks
c) Despite being advised on the importance of maintaining proper books and records P. Jones failed to do so in the year to 31 December 2016. He is able to provide you with the following information:
K
Opening receivables debit balance 119,250
Closing receivables debit balance 224,320
Closing receivables credit balance 1,560
Amounts received from customers 754,100
Discounts allowed to customers 12,450
Irrecoverable debts written off 2,970
Interest charged to receivables for slow payment 4,110
Based upon the information provided, you are required to calculate P. Joness credit sales for the year to 31 December 2016. P. Jones is able to tell you that all goods are sold on credit.
8 Marks Total 20 Marks
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