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2017
arnold has finally decided to set up his own business as a plumber from 1 january 2017. he made the following payments and receipts in the year ended 31 december 2017rent paid $15000
electricity paid $1800
accountancy fees paid $600
insurance paid $2800
rent received $7500arnold informs you that:
1. the rent is both paid and received up to 31 march 2018
2. he owes $600 electricity
3. the cost of completing the accounts for 2017 will be another $800
4. the insurance policy is paid up to 1 march 2018
required
1. prepare ledger accounts for the years ended 31 december 2017
2. prepare statement of financial position extracts as at 31 becember 2017,That is all very interesting, but you have not asked me a question (unless of course you are expecting me to prod the requirements for you!!!).
Maybe you have been set this as a test question, in which case we do not do your homework for you. Otherwise you must have an answer in the same book in which you found the question, in which case you should ask about whatever it is in the answer that you are not clear about – then I will explain.
You cannot be asked to actually prepare ledger accounts in the exam, although of course you should be able to do so and should certainly be able to provide the relevant figures for the SOFP.
Everything needed for this question is explained in detail in my free lectures on accruals and prepayments. The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
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