Financial Accounting
Essay by Nicolas • January 22, 2012 • Essay • 2,183 Words (9 Pages) • 1,847 Views
Contents
Part 1
1. Trial Balance of Arctic Supplies
2. Trading, Profit and Loss Account for Arctic Supplies
3. Balance Sheet of Arctic Supplies
4. Accounting Standards
5. Realisable Value
6. Stakeholders
7. Accounting Methods
8. Types of Business Organisations
9. Memorandum of Association
10. Production of Final Accounts
11. Notes To The Accounts
Part 2
12. Accounting Ratios
13. Limitations of Ration Analysis
Bibliography
Part 1
Arctic Supplies is a wholesaling business. As book-keeper for the organisation in the accounts department, I have been asked to prepare a trial balance, Trading, Profit and Loss Account and Balance Sheet for year ending 31st December 2006.
1. Trial Balance
Trial Balance of Arctic Supplies as at 31st December 2006
Debit Credit
Stock 70,000
Purchases 280,000
Sales 420,000
Returns Inwards 6,000
Returns Outwards 4,500
Discounts Received 750
Discounts Allowed 500
Heating & Lighting 13,750
Salaries 35,600
Post & Packaging 1,400
Premises 120,000
Debtors 55,000
Creditors 47,000
Bank 5,000
Capital 195,000
Drawings 35,000
Fixtures & Fittings 45,000
667,250 667,250
2. Trading, Profit & Loss Account of Arctic Supplies
Trading & Profit & Loss Account for Arctic Supplies
At End of 31st December 2006
£ £
Sales 420,000
- Returns Inwards 6,000
414,000
Opening Stock 70,000
Purchases 280,000
- Returns Outwards 4,500
Closing Stock 60,000
Cost of Goods Sold 285,500
Gross Profit c/d 128,500
414,000 414,000
Gross Profit b/d 128,500
Discounts Received 750
129,250
Less Expenses
Discounts Allowed 500
Salaries 35,200
Heating & Lighting 14,100
Post & Packaging 1,400
51,200
Net Profit 78,050
129,250 129,250
3. Balance Sheet of Arctic Supplies
Balance Sheet of Arctic Supplies
As of 31st December 2006
£ £ £
Fixed Assets
Premises 120,000 120,000
Fixtures & Fittings 45,000 45,000
165,000 165,000
Current Assets
Stock 60,000
Debtors 55,000
Bank 5,000
Salaries Pre-paid 400
120,400 120,400
Less Current Liabilities
Creditors 47,000
Heating & Lighting Accruals 350
47,350 47,350
Working Capital 73,050
Net Assets 238,050
Financed By
Capital 195,000
Net Profit 78,050
- Drawings 35,000
238,050
4. Accounting Standards and Conventions
Financial Statements are a company's reports of its financial transactions over various periods of time; monthly, quarterly and annually. Separate financial statements have to be prepared because each one provides different information that when combined can provide information about the financial position, performance and changes
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