PREPARE FINANCIAL STATEMENTS FOR A SOLE TRADER FROM INCOMPLETE RECORDS

Claire is the proprietor of a small shop which sells children's clothing and footwear. The business trades in the name of Little Scamps and is not registered for VAT.

Claire acts as bookkeeper for her business, although she does not keep a full set of accounting records but is able to provide you with the following information regarding her business:

1. The following were the assets and liabilities of the business as at 1 July 201X:

2. The following is a summary of the bank transactions of the business in the year ended 30 June 201Y:

3. The following additional information is also available at 30 June 201Y:

- A file of unpaid supplier invoices at the year-end shows that £19,700 is owed by the business to its trade creditors.

- All the customers of the business are cash customers. The cash from sales of £69,520 paid into the business bank account in the year ended 30 June 201Y is after making payments of sundry expenses of £120 in the year, and wages of £4,800 to the part- time sales assistant. At the close of business on 30 June 201Y there was a cash float of £300 in the shop till.

- Rent and rates of £900 are prepaid at 30 June 201Y, an accrual of £280 is to be made in respect of heat and light bills unpaid at that date.

- The van is to be depreciated at 25% per year, and fixtures by 10% per year using the straight line method. A full year's depreciation is taken in the year of an assets acquisition. A Depreciation Expense workings account is to be used for the purpose of accounting for depreciation on the van and fixtures in the year ended 30 June 201Y.

- Stock at 30 June 201Y is valued at £26,640

REQUIRED:

Task A

Calculate the capital that Claire has invested in her business as at 1 July 201X. In making the capital calculation show the accumulated depreciation account balances as negatives (figures shown in brackets) in the section used for calculating the assets of the business. A workings area is provided in your Answer Booklet for your use in completing this task.

Task B

Prepare the following ‘workings' accounts for the year ended 30 June 201Y. Note in preparing the accounts you should enter only details and amounts, dates are not required:

- Capital
- Cash
- Depreciation expense
- Fixtures (cost)
- Fixtures (accumulated depreciation)
- Heat and light
- Purchase ledger control
- Purchases
- Rent and rates
- Sales
- Van (accumulated depreciation)

Note - proforma workings accounts are provided in your Answer Booklet for your use in completing this task

Task C

Balance off each of the workings accounts prepared in Task B above, showing clearly the closing balances carried down and brought down and complete the Trial Balance at 30 June 201Y provided in your Answer Booklet.

Some account balances are already entered on the Trial Balance under a column headed up ‘Amount £'. You are required to enter these balances from the amount column into either the Trial Balance Debit (DR) or Credit (CR) columns.

Enter the missing balances taken from the workings accounts prepared in Task B above directly into either the Debit (DR) column or Credit (CR) column of the Trial Balance i.e. you do not need to enter these balances in the column headed up ‘Amount £'.

Task D

Prepare the Trading and Profit and Loss Account of Little Scamps for the Year ended 30 June 201Y. A proforma is provided in your Answer Booklet for your use in completing this task.

Task E

Prepare the Balance Sheet of Little Scamps for the year ended 30 June 201Y. A proforma is provided in your Answer Booklet for your use in completing this task.