You have been asked to prepare the final accounts for W Smith, a sole trader, for theyear ended 31 December 2016. W Smith has forwarded to you all books of primeentry and ledgers, and in addition has given you the following information:(a)Mr Smith had taken £2,000 out of the business bank account to take his wifeon holiday.(b)Up to last year the machinery and vehicle used in the business had beendepreciated using the reducing balance method. W Smith thinks that theyshould now be depreciated using the straight line method.(c)Mr Smith is confident, given his order book that the business will continue tooperate in its present form for many years.(d)Mr Smith had purchased ten staplers, four flip charts and four packets ofwhiteboard markers which will be used in the business for the next couple ofyears.(e)Mr Smith informs you that he has just found an unopened electricity bill for£900 which was for the quarter October to December 2016.In each case, identify and then explain the main accounting concepts beinghighlighted and indicate how each should be treated in the final accounts.

The financial accounting concept has its concentrates on the financial statements that are…

Answered: You have been asked to prepare the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Mr.Karue started business on January 01, 2018, with cash of Kshs. 50,000, furniture of Kshs. 10,000, goods of Kshs.2, 000 and machinery worth Kshs.20, 000. During the year he further introduced Kshs. 20,000 in the business by opening a bank account. From the following information extracted from his books, you are required to prepare final accounts for the year ended December 31, 2018.Accounts from Incomplete Records   Amount Kshs.Receipt from debtors. 57,500Cash sales 45,000Cash purchases 25,000Wages paid 5,000Salaries to staff…
Mr.Karue started business on January 01, 2018, with cash of Kshs. 50,000, furniture of Kshs. 10,000, goods of Kshs.2, 000 and machinery worth Kshs.20, 000. During the year he further introduced Kshs. 20,000 in the business by opening a bank account. From the following information extracted from his books, you are required to prepare final accounts for the year ended December 31, 2018. Accounts from Incomplete Records                                                                                                   Amount Kshs. Receipt from debtors.                                                                       57,500 Cash sales                                                                                         45,000 Cash purchases                                                                                 25,000 Wages paid                                                                                        5,000 Salaries to staff…
Mr.Karue started business on January 01, 2018, with cash of Kshs. 50,000, furniture of Kshs. 10,000, goods of Kshs.2, 000 and machinery worth Kshs.20, 000. During the year he further introduced Kshs. 20,000 in the business by opening a bank account. From the following information extracted from his books, you are required to prepare final accounts for the year ended December 31, 2018.Accounts from Incomplete Records   Amount Kshs.Receipt from debtors. 57,500Cash sales 45,000Cash purchases 25,000Wages paid 5,000Salaries to staff…
Mr.Karue started business on January 01, 2018, with cash of Kshs. 50,000, furniture of Kshs. 10,000, goods of Kshs.2, 000 and machinery worth Kshs.20, 000. During the year he further introduced Kshs. 20,000 in the business by opening a bank account. From the following information extracted from his books, you are required to prepare final accounts for the year ended December 31, 2018. Accounts from Incomplete Records Amount Kshs. Receipt from debtors. 57,500 Cash sales 45,000 Cash purchases 25,000 Wages paid 5,000 Salaries to staff 17,500 Trade expanses 6,500 Electricity bill of factory 7,500 Drawings of Karue 3,000 Cash paid to creditors 42,000 Discount allowed 1,200 Discount received 3,000 Bad debts written-off 1,300 Cash balance at end of year 20,000 Mr.Karue used goods worth Kshs.2, 500 for private purposes, which is not recorded in the books. Charge depreciation on furniture 10% and…
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Mr J Mwero, a wholesale merchant had the following balances in his ledger at 1 March 2019. Cash in hand Sh.3,000; Bank overdraft Sh.7,000; Motor vans Sh.56,000; Furniture and Equipment Sh.11,900; Creditor (R. Osoro) Sh.4,800; Debtor (B. Anyumba) Sh.3,000; Capital Sh.20,000; Loan from Kokise Investment Ltd. Sh. 42,100. At the end of the month, Mr. J Mwero was able to provide the following information from his records: Cash Transactions: I) Receipts - March 7: Cash Sales - Sh.1,200 “ 26: Cash from bank - Sh.3,500 ii) Payments - March 10: Electricity - Shs.200 “ 14: Salaries - Sh.1,800 “ 25: Postage and Stationery - Sh.960 Bank Transactions: i) Receipts - March 17: B. Anyumba - Sh.48,000 ii) Payment - March 20: R. Osoro…
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