The following is the statement of financial position of TT and Co at the end of its first year of trading Statement of financial position as at 31 December 2014 ASSETS Non current assets Property, plant and equipment Delivery van at cost 12,000 Depreciation (2,500) 9,500 Current assets Inventories 65,000 Trade receivables 19,600 Prepaid expenses 5,300 Cash 750 90,650 Total assets 100,150 EQUITY AND LIABILITIES Equity Original 50,000 Retained earnings 26,900 76,900 Current liabilities Trade payables 22,000 Accrued expenses 1,250 23,250 Total equity and liabilities 100,150 The prepaid expenses consisted of rates (300) and rent (5,000) The accrued expenses consisted of wages (630) and electricity (620) During 2015, the following transactions took place The owners withdrew 20,000 of equity as cash Premises continued to be rented at an annual rental of 20,000 During the year, rent of 15,000 was paid to the owner of the premises Rates on the premises 1,300 were paid for the period 1 April 2015 to 31 March 2016 A second delivery van was bought on 1 January 2015 for 13,000 This is expected to be used in the business for four years and then to be sold for 3,000 Wages totalling 36,700 were paid during the year At the end of the year, the business owed 860 of wages for the last week of the year Electricity bills for the first three quarters of the year and 620 for the last quarter of the previous year were paid totalling 1,820 after 31 December 2015, but before the financial statements had been finalised for the year, the bill for the last quarter arrived showing a charge of 690 Inventories totalling 67,000 were bought on credit Inventories totalling 8,000 were bought for cash Sales revenue on credit totalled 179,000 (cost 89,000) Cash sales revenue totalled 54,000 (cost 25,000) Receipts from trade receivables totalled 178,000 Payments to trade payables totalled 71,000 Van running expenses paid totalled 16,200 The business uses the straight line method for depreciating non current assets Required Prepare a statement of financial position as at 31 December 2015 and an income statement for the year to that date

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Posted on Sep 15, 2024

The following is the statement of financial position of TT and Co. at the end of its first year of trading:

Statement of financial position as at 31 December 2014

ASSETS
Non-current assets
Property, plant and equipment
Delivery van at cost	12,000
Depreciation	(2,500)
	9,500
Current assets
Inventories	65,000
Trade receivables	19,600
Prepaid expenses*	5,300
Cash	750
	90,650
Total assets	100,150
EQUITY AND LIABILITIES
Equity
Original	50,000
Retained earnings	26,900
	76,900
Current liabilities
Trade payables	22,000
Accrued expenses	1,250
	23,250
Total equity and liabilities	100,150

* The prepaid expenses consisted of rates (300) and rent (5,000).

The accrued expenses consisted of wages (630) and electricity (620).

During 2015, the following transactions took place:

The owners withdrew 20,000 of equity as cash.
Premises continued to be rented at an annual rental of 20,000. During the year, rent of 15,000 was paid to the owner of the premises.
Rates on the premises 1,300 were paid for the period 1 April 2015 to 31 March 2016.
A second delivery van was bought on 1 January 2015 for 13,000. This is expected to be used in the business for four years and then to be sold for 3,000.
Wages totalling 36,700 were paid during the year. At the end of the year, the business owed 860 of wages for the last week of the year.
Electricity bills for the first three quarters of the year and 620 for the last quarter of the previous year were paid totalling 1,820. after 31 December 2015, but before the financial statements had been finalised for the year, the bill for the last quarter arrived showing a charge of 690.
Inventories totalling 67,000 were bought on credit.
Inventories totalling 8,000 were bought for cash.
Sales revenue on credit totalled 179,000 (cost 89,000).
Cash sales revenue totalled 54,000 (cost 25,000).
Receipts from trade receivables totalled 178,000.
Payments to trade payables totalled 71,000.
Van running expenses paid totalled 16,200.