Notes and activities on Statement of financial position
Answer Activities and Questions
A statement of financial position shows assets, liabilities and capital of a business at the end of the financial year.
Assets are everything that the business own. There are 2 types of assets:
1. Non- current assets – Items bought to be used by the business for a long period of time.
Examples
Property | Premises | Equipment |
Land | Warehouse | Computer |
Buildings | Plant and machinery | Motor vehicles |
2. Current Assets – Everything that the business own for a short period of time and the value of which changes almost every day.
Examples
Inventory of goods
Trade receivables (Amount owed by credit customers)
Cash in hand and at bank
Liabilities are everything that the business owes. There are 2 types of liabilities:
1. Non current liabilities – amount owed more than one year
Example : Loan from Bank
2. Current liabilities – amount owed less than one year
Example : Trade payables ( amount owed to credit suppliers)
FORMAT
Statement of financial position as at 31st December 2016 | ||
$ | $ | |
Non-Current assets | ||
Property, plant and equipment a | *** | |
Fixtures and Fittings b | *** | |
Total non-current assets a + b | *** | |
Current Assets | ||
Closing inventory c | *** | |
Trade receivables d | *** | |
Cash and bank e | *** | |
Total current assets c + d + e | *** | |
Total Assets (a + b) + (c + d + e) | **** | |
Equity | ||
Capital P | *** | |
Add Profit for the year Q | *** | |
Less Drawings R | (**) | |
Capital owned / Owner's capital P + Q - R | *** | |
Current Liabilities | ||
Trade payables S | ** | |
Equity and Liabilities P + Q - R + S | **** | |
Q1. | Prepare a statement of financial position from the following details as at 31st December 2016 | ||
DR | CR | ||
Machinery | 40 000 | ||
Equipment | 30 000 | ||
Inventory - 31st Dec | 15 000 | ||
Trade Receivables | 18 000 | ||
Cash and Bank | 12 000 | ||
Trade payables | 14 000 | ||
Capital | 77 000 | ||
Drawings | 8 000 | ||
Profit for the year | 32 000 | ||
123 000 | 123 000 | ||
Q2. | Prepare a statement of financial position from the following details as at 31st December 2016 | ||
DR | CR | ||
Trade receivables | 21 350 | ||
Inventory - 31st Dec | 18 240 | ||
Plant and machinery | 140 000 | ||
Cash and bank | 23 000 | ||
Office computer | 34 000 | ||
Capital | 189 550 | ||
Profit for the year | 32 490 | ||
Drawings | 4 400 | ||
Trade payables | 18 950 | ||
240 990 | 240 990 | ||
Q3. | Prepare a statement of financial position from the following details as at 31st December 2016 | ||
DR | CR | ||
Cash in hand | 4 670 | ||
Drawings | 670 | ||
Trade receivables | 3 249 | ||
Motor van | 11 451 | ||
Land and Buildings | 21 700 | ||
Profit for the year | 1 564 | ||
Capital | 37 850 | ||
Trade payables | 4 566 | ||
Inventory-31st Dec | 2 240 | ||
43 980 | 43 980 | ||
Q4. | Prepare a statement of financial position from the following details as at 31st December 2016 | ||
DR | CR | ||
Motor vehicles | 35 200 | ||
Drawings | 6 700 | ||
Trade Receivables | 31 330 | ||
Inventory - 31st Dec | 14 000 | ||
Cash and Bank | 2 540 | ||
Trade payables | 35 800 | ||
Capital | 79 100 | ||
Fixtures and Fittings | 28 800 | ||
Profit for the year | 3 670 | ||
118 570 | 118 570 | ||
