CIE Accounting Paper-1: Specimen Questions 117 - 118 of 214

Passage

Ryno has a business selling spare parts for cars. He lost many of his financial records in a flood but has been able to provide the following information.

1 November 2015 31 October 2015

$ $

Non-current (fixed) assets 10 000 12 000

Current assets 100 000 90 500

Current liabilities 25 000 23 000

Question number: 117 (3 of 4 Based on Passage) Show Passage

Short Answer Question▾

Write in Short

In the table below, place a tick (√) under the correct heading to show the effect which taking the loan will have on each of the following items. If Ryno has decided to take a 10-year business loan from the bank. The money will be paid in to his business bank account.

The changes in the accounting transaction of the firm

Finding a value of increase, decrease and no charge

Increase

Decrease

No change

Current Liability

Long term liabilities

Current Assets

Fixed Assets

Explanation

Calculate in table value of increase, decrease and nocharge.

calculate value of increase, decrease and no charge

Increase

Decrease

No change

Current Liability

Long term liabilities

Current Assets

Fixed Assets

The Long term liabilities and cash in current assets will increase while the loan is taken by the Ryno for a long period of 10 years. The short term loan will be affected in the Current liabilities and the value of fixed assets will be changes when purchase of fixed assets took place during the year.

Question number: 118 (4 of 4 Based on Passage) Show Passage

Short Answer Question▾

Write in Short

Prepare Ryno’s capital account for the year ended 31 October 2015. If he took drawings of $500 each month.

Explanation

Ryno’s capital account

Find out Amount in date wise

Calculations in Rynos capital account

Date

Particulars

Amount

$

Date

Particulars

Amount

$

October 31

Drawings

6000

November 1

Balance

85000

October 31

Balance

79500

The capital account of the Ryno’s reflects his financial position towards the business and his capital value at the end of the October 31st 2015. The balance on each month is carried forward from the statement of affairs of respective months.

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