Question

Georgia Craig Below is the end of year trial balance for 2014 and 2015. All amounts are in their normal balance You are also provided 2015 CRI and CP All sales are credit All purchases are for inventory and are on credit There is no other income or expenses GP is 30% Calculate the missing amounts Owners Equity 2014 For 2015 Cash at Bank Inventory Sales COGS 2014 50000 5000 8000 10000 2015 Cash at Bank Accounts Receivable Inventory Accounts Payable Owners Equity Sales COGS 35000 75000 DR Cash 170000 CR Cash Receipts Journal 2015 Accts Receivable 170000

Answer 1

	Owner's equity 2014
	Assets=Liabilities+Equity
	Equity=Assets-Liabilities
	Assets:
				$
	Cash at bank			50000
	Accounts receivable			5000
	Inventory			8000
	Total assets			63000
	Liabilities=Accounts payable= $ 10000
	Equity=Owner's equity (Due to lack of information)
	Owner's equity=63000-10000=$ 53000
	2015
	Cash at bank:
					$
	Beginnig balance				50000
	Add: Cash receipts				170000
					220000
	Less: Cash payments				85000
	Ending balance				135000
	Cash at bank=$ 135000
	Sales
	All sales are on credit
	Hence, Balancing figure in accounts receivable will be sales
					$
	Ending balance				35000
	Add: Cash received				170000
					205000
	Less: Beginning balance				5000
	Sales				200000
	Sales= $ 200000
	COGS
	GP is 30%
	Hence, COGS=100-30=70%
	COGS=Sales*70%=200000*70%=$ 140000
	Inventory:
	COGS=Beginning inventory+Purchases-Ending inventory
	Ending inventory=Beginning inventory+Purchases-COGS
	All purchases are for inventory and on credit.
	Hence, Balancing figure in accounts payable will be purchase
					$
	Ending balance				75000
	Add: Cash paid				85000
					160000
	Less: Beginning balance				10000
	Purchase				150000
	Ending inventory=8000+150000-140000=$ 18000