Introductory accounting and finance :: essays research papers fc

Contents scallywag rascal 3 piece A Trading, Profit and loss answer for Page 4 Section B Balance Sheet Page 5 Section CPage 6 Section DPage 7 Section EPage 8 Section FPage 9 Section GPage 10 Section HPage 11 BibliographyTrading, Profit & Loss superlativefor Mr. Stanley relating to trading during Sales125000Less Cost of SalesOpening credit line10430 furnish Purchases6763478064Less returns outward4878016Add Carriage secret212080136Less Closing melodic line1125068886GROSS PROFIT56114Less ExpensesSalaries28400 pestle & Stationary98Rent & Rates (2900-860)2040Packaging3217Bad debt126 provide for Bad Debt60Insurance1220Electricity (953+263)1216 Depreciation (3000 + 1680)468041057Carriage external285043907NET PROFIT12207This is a balance sheet for Mr. Stanley as at 31st December 2002.Fixed AssetsFixtures & Fittings (15,000 + 8,400)23,400Less Depreciation (3,000 + 1,680)4,68018,720Current AssetsStock 11,250Debtors3,200Less Prov.for bad debt1503,050Bank590Add Prepayments86 01,450Cash one hundred sixty-five15,915Less Current LiabilitiesCreditors6,765Accruals263Working Capital7,0288,88727,607Financed ByCapital25,000Add Net Profit12,027Less Drawings9,60027,607C. Give an explanation of the method of account statement treatment for invoices that have been free and unrecorded at the date of the preparation of the last-place accounts.This is known as an accrual of expenses, an accrual occurs when expenses that have occurred during an story catch are not include in the trial balance, they are unpaid and unrecorded. When this occurs the invoice treatment in the profit and loss account would be to add the outstanding amount to the expense in question cover the full amount of expense used up in that accounting period. In the balance sheet however an accrual is classed as a flow rate liability. This is because the firm owes the outstanding amount and is expected to pay this debt in the short term. The outstanding amount will therefore appear to a lower place current liabilities in the Balance Sheet under the heading ACCRUALS. The reasons for devising these adjustments is to ensure that the profit and loss account records the cost that has been incurred for that particular accounting period instead of simply the amount that has been paid.An example of an accrual during the accounting period of January 1st 2002 and December 31st 2002 a phone bill is incurred for the months June to September however it goes unpaid and is not incorporated into the telephone account. This authority that adjustments have to be made so that it can be included in the final accounts for that accounting period.D. Mr. Stanley had paid a proportion of the judge for the following accounting period. Explain how this impacted on the preparation of the accounts for the current accounting period.A prepayment is when an amount is paid in advance of the accounting period in which it is actually due.