CIE Accounting Paper-1: Specimen Questions with Answers 116 - 117 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: 116 (2 of 4 Based on Passage) Show Passage

Short Answer Question▾

Write in Short

Prepare Ryno’s statement of affairs on 31 October 2015 showing his total capital at that date.

He decided to increase the provision for doubtful debts by $1500 on 31 October 2015

Ryno’s – Statement of Affairs at 31st October 2015

Explanation

Statement of affairs at 31st October 2015

Statement of affairs as on 31st October 2015

Calculate Particular value in given table.

Particulars

$

$

Fixed Assets

Current Assets

Less: Current Liabilities

100000 - 9500 = 90500

23000

12000

67500

———

79500

The statements of affairs are prepared when business maintained the incomplete record of business transaction. Hence profit or loss of the business can be ascertained through the Statement of affairs method.

Question number: 117 (3 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.