IGCSE Accounting Paper-1: Specimen Questions with Answers 115 - 116 of 338
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 2,015 31 October 2,015
$ $
Non-current (fixed) assets 10 000 12 000
Current assets 100 000 90 500
Current liabilities 25 000 23 000
Question 115 (1 of 4 Based on Passage)
Write in Short
Short Answer▾Prepare Ryno’s statement of affairs on 31 October 2,015 showing his total capital at that date.
He decided to increase the provision for doubtful debts by $ 1,500 on 31 October 2,015
Ryno’s – Statement of Affairs at 31st October 2,015
Explanation
Statement of affairs at 31st October 2,015
| Particulars | $ | $ |
Fixed Assets Current Assets Less: Current Liabilities | 100,000 - 9,500 = 90,500 23,000 | 12,000 67,500 ——— 79,500 |
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 116 (2 of 4 Based on Passage)
Write in Short
Short Answer▾Prepare Ryno’s capital account for the year ended 31 October 2,015. If he took drawings of $ 500 each month.
Explanation
Ryno’s capital account
| Date | Particulars | Amount $ | Date | Particulars | Amount $ |
October 31 | Drawings | 6,000 | November 1 | Balance | 85,000 |
October 31 | Balance | 79,500 |
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 2,015. The balance on each month is carried forward from the statement of affairs of respective months.