You are given the following information about a sole trader as at 1 January 2012:
The value of assets and liabilities were:
- Non-current assets at net book value £16,800
- Trade receivables £ 4,204
- Bank overdraft £ 2,140
- Trade payables £ 2 766
(a) Calculate the capital account balance as at 1 January 2012.
(b) On 1 January 2012, office equipment is purchased on credit. Select the relevant boxes below to show what effect this transaction will have on the account balances. You must choose ONE answer for EACH line.
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Debit
a
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Credit
a
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No change
a
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Non-current assets
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Trade receivables
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Trade payables
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Bank
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Capital
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(c) Which of the following is best described as a current liability? Select ONE answer.
- A trade receivable that will be received in the 30 days.
- A motor vehicle that will be sold in the next two months
- A trade payable that will be paid in the next month.
- A bank loan to be repaid in 2 years time.