REVIEW QUESTIONS 1. Bonnie Clyde makes parts for cars and her financial year ends on 31 March. After preparing her income statement for the year ended 31 March 2005, her trial balance shows the following items. 3. Morgan is in business as a printer. He has prepared the following trial balance (after calculating his profit for the year) from his accounting records for the year ended 31 August 2006. Morgan Trial Balance at 31 August 2006 2200 2100 5000 9.000 18.00.0 5 600 Machinery 1 500 Office equipment Bank 200 Cash Trade payables 4 100 Trade receivables Loan from Nicola repayable 2011 3 900 Inventory 31 August 2006 Capital 21 000 Drawings Profit for the year 36 300 (a) Prepare Morgan's balance sheet at 31 August 2006. (b) Morgan's business has a bank overdraft at 31 August 2006 Suggest one way in which he could reduce or eliminate the overdraft. (c) Nicola has given Morgan an additional long term loan of $2000 paid into the bank on 1 September 2006. in the table below, place a tick (P) under the correct heading to indicate the effect of the additional loan on the following items in Morgan's balance sheet: 36 300 a No effect Effect of additional loan Increase Decrease (i) Bank overdraft (ii) Loan account (iii) Net current assets (iv) Profit for the year (v) Capital