Mada za sehemu hiiElementary Balance SheetMada 2
- Define the balance sheet
- Explain the Balance sheet Interpretation and Capital of the business
Is an equation comprises two sides as in mathematics such as .
Accounting equation deals with accounting balance through balance sheet items such as Assets, Liabilities Capital.
Accounting Equation formulated in taking consideration in balance sheet items but liabilities side comprises long term liabilities and short term liabilities.
Therefore, accounting equation should be:
| LIABILITIES | AMOUNT | ASSETS |
|---|---|---|
| Capital | Xxx | FIXED ASSETS |
| Add: net profit | Xxx | Buildings |
| Xxx | Motor van | |
| Less: drawings | Xxx | Furniture |
| LONG TERM LIABILITIES | CURRENT ASSETS | |
| Loan from bank | Xxx | Stock |
| CURRENT LIABILITIES | Debtor | |
| Creditor | Xxx | Cash in hand |
| Bank over draft | Xxx | Cash in bank |
From the following information prepare balance sheet
Building 7,000
Debtor 9,500
Creditor 21,000
Machinery 33,000
Cash in hand 18,000
Bank loan 20,000
Capital 56,000
Drawings 2,000
Net profit 10,000
Stock at 31.12.2001 37,500
Solution QN1
BALANCE SHEET AS AT 31st Dec 2001
| LIABILITIES | AMOUNT | ASSETS | AMOUNT | ||
|---|---|---|---|---|---|
| Capital | 56,000 | FIXED ASSETS | |||
| Add: net profit | 10,000 | Building | 7,000 | ||
| 66,000 | Machinery | 33,000 | 40,000 | ||
| Less: drawings | 2,000 | ||||
| 64,000 | |||||
| LONG TERM LIABILITIES | CURRENT ASSETS | ||||
| Bank loan | 20,000 | Stock | 37,500 | ||
| Debtor | 9,500 | ||||
| Cash in hand | 15,000 | 65,000 | |||
| CURRENT LIABILITIES | |||||
| Creditor | 21,000 | ||||
| 105,000 | 105,000 |
From the information prepare Trading, profit and loss account and balance sheet as at 30th December 2006
| DETAILS | DR | CR |
|---|---|---|
| Sales | 18,600 | |
| Purchases | 11,556 | |
| Carriage outwards | 326 | |
| Carriage inwards | 234 | |
| Stock at 1.1.2006 | 3,776 | |
| Return outward | 355 | |
| Return inward | 440 | |
| Salaries or wage | 2,447 | |
| Motor | 664 | |
| Rent | 576 | |
| Sundry | 1,200 | |
| Motor vehicle | 2,400 | |
| Fixture and fittings | 600 | |
| Debtors | 4,577 | |
| Creditor | 3,043 | |
| Cash at bank | 3,876 | |
| Cash in hand | 120 | |
| Drawings | 2,050 | |
| Capital | 12,844 |
Stock at 31 December 2006 is 4,998
Solution QN2
DR TRADING, PROFIT AND LOSS ACCOUNT FOR THE YEAR END OF 2006 CR
BALANCE SHEET AS AT 31st Dec 2006
| LIABILITIES | Amount | ASSETS | Amount |
|---|---|---|---|
| Capital | FIXED ASSETS | ||
| Add: net profit | 12,844 | Motor vehicle | 2,400 |
| 2,734 | Fixture and fittings | 600 | |
| 15,578 | |||
| Less: drawings | 2,050 | CURRENT ASSETS | |
| 13,528 | Stock | 4,998 | |
| LONG TERM LIABILITIES | Debtors | 4,577 | |
| - | Cash | 120 | |
| CURRENT LIABILITIES | Cash at bank | 3,876 | |
| Creditor | 3,043 | ||
| 16,571 | 16,571 |
Mwalimu
Unasoma somo hili? Niulize nikuelezee chochote kilichomo.
Ingia ili kumuuliza Mwalimu wa AI wa Sonza kuhusu mada hii.
Ingia ili kuuliza