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The following trial balance for ABC Ltd is extracted at 31 December 20X1:
___________________________________DR______________CR
Sales_____________________________________________341,726
Purchases________________________ 202,419
Carriage inwards ____________________376
Carriage outwards_____________________ 729
Wages and salaries __________________54,210
Rent and rates ______________________12,466
Heat and light ________________________4,757
Inventory at 1 January 20X1 ____________14,310
Dividends paid ________________________28,500
Receivables __________________________49,633
Payables ___________________________________________32,792
Bank________________________________ 3,295
Sundry expenses ______________________18,526
Cash _________________________________20,877
Share capital __________________________________________20,000
Reserves _____________________________________________8,990___________________________________406,803____________ 406,803
Closing inventory is 15,327.
(a) Gross profit for the year is $
(b) Profit before tax for the year is $
c) Net assets are $the answers are:
(a)139,948
(b) 49,260
(c) 49,750(a)im not sure how ro apply the P=Closing capital+drawings-additional capital – opening captal to this
(b) Also there is not tax given here?
(c)not 100% on this either
please help thanks
(a) The accounting equation is not relevant. You have to calculate the profit by taking sales less cost of sales less expenses. (Effectively a Statement of profit or loss)
(b) That is why it asks for the profit before tax!!
(c) The net assets (total assets – total liabilities) are always equal to the total capital (share capital + reserves). You know the current share capital and reserves, the only addition will be the profit made this year (calculated in (a))
There is no such ‘learning’ topic as incomplete records!!
Study Texts may call it incomplete records, but it is a combination of understanding double entry (and the year end adjustments), understanding control accounts, understanding the accounting equation, and understanding mark-ups and margins.All of these are covered in the lectures.
The question that you have given is not incomplete records at all – it is simply preparing the Statement of profit or loss from the trial balance.
If you watch the free lectures (in order) with the free lecture notes in front of you, then they cover the entire syllabus for F3 and you should then be able to pass without problem.
(Your earlier question is effectively dealt with within the first few chapters)
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