Question

Jasper, a sole trader, has provided the following summary of his bank receipts and payments for the year ended 30 April 2010 DR CR Cash and cheques 424 000 Machinery Payments to creditors Rent Insurance Wages Postage Electricity Sundries 30 400 228 000 24 200 14 200 104 200 800 8 400 4200 Jasper's year-end balances were as follows: At 30 April 2009 2010 Trade receivables (debtors) Inventory (stock) Trade payables (creditors) Machinery at net book value Rent prepaid Insurance prepaid 46 400 24 400 29 200 206 400 30 600 32 200 216 000 6 200 3400

Answer 1

a) Ordinary goods purchased

Ordinary goods purchased = Payments to creditors + Closing balance of creditors - opening balance of creditors

= 2,28,000 + 32,200 - 29,200 = $2,31,000

b) Sales

To calculate sales, we first calculate cost and apply the mark-up of 75% on it.

Particulars	$
Materials consumed ( opening inventory + Purchases - closing inventory) = 24,400 + 2,31,000 - 30,600	2,24,800
Rent (Rent paid + opening prepaid rent - closing prepaid rent) = 24,200 + 0 - 6,200	18,000
Insurance (Insurance paid + Opening prepaid insurance - closing prepaid insurance) =14,200 + 0 - 3,400	10,800
Wages	104,200
Postage	800
Electricity	8,400
Sundries	4,200
Depreciation (Opening net book value of machinery + new purchases of machinery - closing net book value of machinery- net book value of machinery sold) = 206,400 + 30,400 - 216,000 - 5,600	15,200
Total cost	386,400
Mark-up 75% on above	289,800
Sales	6,76,200

c) Income Statement for year ended 30th April 2010

Particulars	$
Sales	676,200
Less: Expenses
Materials consumed	224,800
Rent	11,800
Insurance	10,800
Wages	104,200
Postage	800
Electricity	8,400
Sundries	4,200
Loss on sale of machinery (5,600 - 1,000)	4,600
EBITDA	300,400
Less: Depreciation	15,200
Profit before tax	285,200

d) Balance sheet as at 30th April 2018

Liabilities
Capital (Refer Note 1)	517,200
Bank liability	5,400
Creditors	32,200
Total	554,800
Assets
Machinery at net book value	216,000
Inventory	30,600
Receivables (Refer note 2)	298,600
Prepaid rent	6,200
Prepaid insurance	3,400
Total	554,800

Notes

1. Opening bank balance = Closing bank balance + payments made - cash receipts

= -5,400 + (30,400+ 2,28,000 +24,200+14,200 + 104,200 + 800 + 8,400 + 4,200) - 4,24,000

= -15,000

2. Opening capital = Opening receivables + Opening inventory + Opening net machinery value - Opening payables - Opening bank credit balance

= 46,400 +24,400 + 206,400 -29,200-15000

= 233,000

Closing capital = Opening capital + Profit before tax - drawings (amount paid to private bank account of the proprietor)

= 233,000 + 285,200 - 1,000

= 517,200

3. Trade receivables = Opening receivables + Sales - payments received from debtors

= 46,400 + 676,200 - 424,000

= 298,600