.Company has been trading for one year as at 31 December 2020 and during that year it paid electricity bills amounting to £760. On 14 January 2021 Company received an electricity bill for the three months to 31 December 2020 for £310. It eventually paid the bill on 31 January 2021. Its accounts for the year ended 31 December 2020 should show: Select one: a. A statement of profit or loss charge for electricity of £1,070 and a prepayment of £310 on the statement of financial position b. A statement of profit or loss charge for electricity of £760 and a prepayment of £310 on the statement of financial position c. A statement of profit or loss charge for electricity of £760 and an accrual of £310 on the statement of financial position d. A statement of profit or loss charge for electricity of £1,070 and an accrual of £310 on the statement of financial position 2. Company started trading on 1 January. Its trial balance at 31 December, the end of its first year of trading is given below. Debit Credit £ £ Opening capital 26,000 Turnover 95,000 Purchases 64,000 Rent 6,000 Motor van 18,000 Drawings 10,000 Other expenses 27,000 Bank overdraft 4,000 Total 125,000 125,000 If the closing inventory at 31 December was £5,000 and depreciation is to be ignored, which one of the following is true? Select one: a. The gross profit will be £36,000 and the net profit will be £3,000 b. The gross profit will be £36,000 and the net profit will be £9,000 c. The gross profit will be £31,500 and the net profit will be £25,000 d. The gross profit will be £31,000 and the net profit will be £3,000
.Company has been trading for one year as at 31 December 2020 and during that year it paid electricity bills amounting to £760. On 14 January 2021 Company received an electricity bill for the three months to 31 December 2020 for £310. It eventually paid the bill on 31 January 2021. Its accounts for the year ended 31 December 2020 should show: Select one: a. A statement of profit or loss charge for electricity of £1,070 and a prepayment of £310 on the statement of financial position b. A statement of profit or loss charge for electricity of £760 and a prepayment of £310 on the statement of financial position c. A statement of profit or loss charge for electricity of £760 and an accrual of £310 on the statement of financial position d. A statement of profit or loss charge for electricity of £1,070 and an accrual of £310 on the statement of financial position 2. Company started trading on 1 January. Its trial balance at 31 December, the end of its first year of trading is given below. Debit Credit £ £ Opening capital 26,000 Turnover 95,000 Purchases 64,000 Rent 6,000 Motor van 18,000 Drawings 10,000 Other expenses 27,000 Bank overdraft 4,000 Total 125,000 125,000 If the closing inventory at 31 December was £5,000 and depreciation is to be ignored, which one of the following is true? Select one: a. The gross profit will be £36,000 and the net profit will be £3,000 b. The gross profit will be £36,000 and the net profit will be £9,000 c. The gross profit will be £31,500 and the net profit will be £25,000 d. The gross profit will be £31,000 and the net profit will be £3,000
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter9: Working Capital
Section: Chapter Questions
Problem 14E
Related questions
Question
1.Company has been trading for one year as at 31 December 2020 and during that year it paid electricity bills amounting to £760. On 14 January 2021 Company received an electricity bill for the three months to 31 December 2020 for £310. It eventually paid the bill on 31 January 2021. Its accounts for the year ended 31 December 2020 should show:
Select one:
a. A statement of profit or loss charge for electricity of £1,070 and a prepayment of £310 on the statement of financial position
b. A statement of profit or loss charge for electricity of £760 and a prepayment of £310 on the statement of financial position
c. A statement of profit or loss charge for electricity of £760 and an accrual of £310 on the statement of financial position
d. A statement of profit or loss charge for electricity of £1,070 and an accrual of £310 on the statement of financial position
2. Company started trading on 1 January. Its trial balance at 31 December, the end of its first year of trading is given below.
|
Debit |
Credit |
|
£ |
£ |
Opening capital |
|
26,000 |
Turnover |
|
95,000 |
Purchases |
64,000 |
|
Rent |
6,000 |
|
Motor van |
18,000 |
|
Drawings |
10,000 |
|
Other expenses |
27,000 |
|
Bank overdraft |
|
4,000 |
Total |
125,000 |
125,000 |
If the closing inventory at 31 December was £5,000 and
Select one:
a. The gross profit will be £36,000 and the net profit will be £3,000
b. The gross profit will be £36,000 and the net profit will be £9,000
c. The gross profit will be £31,500 and the net profit will be £25,000
d. The gross profit will be £31,000 and the net profit will be £3,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning