Part I, Question 1 – Fossick Ltd, Transaction Worksheet ASSETS Fixed Assets Opening balances Purchase stock Sales: credit Cost of sales Insurance Advertising Purchase machine Salaries Interest Pay trade creditors Collect trade debtors Tax Dividend 1,150 Trade Debtors Share Capital 700 S/H FUNDS Ret Profits 950 P&L A/C Bank Loan 1,500 LIABILITIES Trade Creds 500 1,000 (500) (50) 950 (90) (150) (1,000) 640 (29) (90) (150) (1,000) (32) 32 29 1,000 (500) (50) (120) Tax Payable Divid Payable -

Stocks 500

Cash 2,000

120 950

(640)

Transfer retained profit 58 Closing balances 2,100 360 1,350 700 979 (58) 1,500 570 32 29

1

Profit And Loss Account
Sales Cost of Sales Gross Profit Administrative Expenses Profit before Interest and Tax Interest Profit Before Tax Tax Profit After Tax Retained Profit for the Year 1,000 (500) 500 (260) 240 (150) 90 (32) 58 29

Balance Sheet
FIXED ASSETS Plant and Machinery CURRENT ASSETS Debtors Cash CURRENT LIABILITIES Trade Creditors Dividends Payable Tax Payable

2,100 2,100 360 1,350 1,710 570 29 32 631 3,179

TOTAL ASSETS LESS CURRENT LIABILITIES LONG TERM LIABILITIES Bank Loan NET ASSETS CAPITAL AND RESERVES Ordinary Share Capital Retained Profits SHAREHOLDERS’ FUNDS

1,500 1,679

700 979 1,679

2

Part I, Question 2 – Vole Ltd, Transaction Worksheet

ASSETS Fixed Assets Opening balances Purchase stock Sales: cash Cost of sales Electricity Purchase machine Sales: credit Cost of sales Insurance Wages Pay trade creditors Collect trade creditors Tax payment Tax Transfer retained profit Dividends Closing balance 750 Trade Debtors 250 Share Capital 750

S/H FUNDS Ret Profits P&L A/C Other Creds 500

LIABILITIES Trade Creds 350 1,000 Tax Payable 150 Divid Payable -

Stocks 500 1,000

Cash 250

1,000 (500) (120) 600 1,200 (600) (90) (400) (1,170) 1,160 (150) 318 (100) 1,350 400 290 480 750 218