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LO 34 E1-33B. (Learning Objectives 3, 4: Using the accounting equation; preparing a Balance Sheet) Amounts of the assets and

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(1)

Bobbyboy Company
Balance sheet
as on 31 May 20X6
Particular Amount Amount
Assets:
property pland and equipment 18
investment 16.1
Total Non current assets 34.1
receivables 0.2
cash 2.5
other assets 5
total current assets 7.7
Total Assets 41.8
Liability and shareholder equity
Liabilities
Long term liabilities 2.3
current liability 6
Total Liability 8.3
Shareholder equity:
Share capital 15.9
retained earning x 15.9+x
Liability and shareholder equity 24.2+x

Accounting equation is assets = liabilities and shareholder equity

41.8=24.2+x

x= 41.8-24.2 which is 17.6

hence closing balance of retained earning is 17.6.

Hence the balance sheet is

Bobbyboy Company
Balance sheet
as on 31 May 20X6
Particular Amount Amount
Assets:
property pland and equipment 18
investment 16.1
Total Non current assets 34.1
receivables 0.2
cash 2.5
other assets 5
total current assets 7.7
Total Assets 41.8
Liability and shareholder equity
Liabilities
Long term liabilities 2.3
current liability 6
Total Liability 8.3
Shareholder equity:
Share capital 15.9
retained earning 17.6 33.5
Liability and shareholder equity 41.8

(1.)

Income statement
as on 31 May 20X6
Particular Amount Amount
Total revenue 34
salary and other employee expense 15.5
Interest expense 0.2
other expense 6.8
total expenses 22.5
net profit 11.5

(2)

Statement of change in equity
as on 31 May 20X6
Particular Amount Amount
Share capital 15.9
openng balance of retained earning 9.3
add net profit 11.5
less dividend paid 3.2
closing balance of share capital 33.5
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