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Accounting Cycle


As a recently qualified graduate of De Montfort University you are eager to start work and are prepared to tackle anything. A friend of yours, a self-employed accountant, has asked you to assist him in preparing a set of accounts from one of his clients account records. Using the following information, you are required to complete the following tasks for the year ending 30th June 2015:- •               Open up a set of ledger accounts starting from last year’s Balance Sheet information •               Post the year’s transactions to the appropriate ledger •               Account for any transactions that may not be complete at the year end •               Balance the ledger accounts •               Prepare a Trial Balance •               Prepare a Trading/Profit and Loss Account •               Prepare a Balance Sheet •               Prepare a cash flow statement for the year just ended •               Offer up a commentary as to how you think the Business has performed over the year Good luck Andy Carte Sue and Angie - Balance Sheet as at 30th June 2014 FIXED ASSETS COST BV Vehicles 16,000 Plant and Equipment 1,49,000 Land and buildings 2,85,000 CURRENT ASSETS Bank Cash Trade Debtors 62,100 Provision for Doubtful Debts -2,700 Stock Insurance, prepayment CURRENT LIABILITIES Trade Creditors Accruals Telephone Light and heat Wages Accountancy NET CURRENT ASSETS LONG TERM LIABILITY 10% Bank Loan CURRENT ACCOUNT Sue Angie CAPITAL ACCOUNT Sue Angie NET ASSETS Prepared by A J Carte FCA August 2014 Sue and Angie Notes to the Accounts for the year ended 30June 2015 Trading figures Sales for the year 5,25,000 Purchases for the year 2,65,500 Sales returns by customers 15,000 Purchase returns to Suppliers 8,400 Cheques paid out Wages 98,600 Motoring expenses 8,900 Heat and Light 5,600 Accountancy 4,100 Insurance 3,800 Telephone and Broadband 8,600 Premises Upkeep 4,100 Computer Equipment (plant) 6,400 Motor Vehicle 14,500 Suppliers 2,89,000 Drawings Angie 20,000 Sue 18,000 Cheques received From customers 5,09,000 From Sue 4,200 From Angie 3,000 Other information relating to the accounting year, to be accounted for A vehicle purchased in September 2012 for £10,000 was sold for £5,500 Depreciation rates are to be calculated as follows:- Plant 20% RB Motor Vehicles 15% SL Land and Buildings Depreciation is provided 100% in year of purchase and NIL % in year of sale. Closing stock is valued at £6,400. £4,000 of the closing debtors are considered to be uncollectable. The doubtful debt provision is to be set at 5% of year end Debtors. The following were outstanding and unrecorded at 30th June 2015 Telephone £1,800 Heat and Light £2,300 Wages £3,400 Accounting £2,800 No loan repayments or interest have been paid in the year. Sue has taken £1,200 of stock for her personal use. Angie has used £400 cash to buy a season ticket at Anfield. Sue has used £300 cash to pay for a holiday in Italy. Cash Discounts received from suppliers total £4,200. Profits are shared equally. No interest is charged on Capital or Current Account Balances. At the end of the accounting period a transfer is made between current accounts in order to ensure that drawings for the year are the same for each partner. All transactions relating to the partners during an accounting period are to be recorded in the Current Accounts of the partners. Weighting % Ledger Accounts 40 Trial Balance 10 Final Accounts 30 Cash flow Statement 10 Commentary 10