FA Lecture 5 Example

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School
Edinburgh Napier University **We aren't endorsed by this school
Course
ACCOUNTING FINANCIAL
Subject
Accounting
Date
Jun 19, 2023
Pages
5
Uploaded by CoachThunder11365 on coursehero.com
Financial Accounting Lecture 5 Examples Example 1 On 1 January 2014 Gemma Collins owed £2,000 in respect of the previous year's electricity. Gemma made the following payments during the year ended 31 December 2014. 5 March £2,500 9 June £3,000 8 September £2,750 4 December £3,000 At 31 December 2014 Gemma calculated that she owed £1,500 for the last part of the year. Write up the ledger accounts to record these transactions. Electricity Expense (p&l) 1 Jan 14 Accrual 2,000 Accrual (BS) Profit and Loss Account (Extract) Year ended 31 December 2014 Expenses: Electricity Balance Sheet (Extract) as at 31 December 2014 Current Liabilities Accrual - Electricity
Example 2 On 1 January 2014 Woody Noodle started a business and paid £1,200 for rent to 31 March 2014. During his first year of trading he paid the following amounts in rent. 16 March Quarter to 30 June 2014 £1,200 21 June Quarter to 30 September 2014 £1,200 27 September Quarter to 31 December 2014 £1,400 15 December Quarter to 31 March 2015 £1,400 Write up the ledger accounts to record these transactions. Rent Expense (p&l) Prepayment (BS) Profit and Loss Account (Extract) Year ended 31 December 2014 Expenses: Rent Balance Sheet (Extract) as at 31 December 2014 Current Assets Prepayment - Rent
Example 3 Gordon prepares his accounts to 31 December each year. The Trade Debtors balances were as follows: £ 31 December 2013 10,000 31 December 2014 12,000 You are required to calculate the amounts to be included in the accounts in respect of bad debts for the years ended 31 December 2013 and 2014. Year to 31 December 2013 Included in the Trade Debtors figure is an amount of £500 from Forsyth Ltd which Gordon has decided is irrecoverable. A general provision for bad debts of 2% of trade debtors is to be made. 1. Remove the debt from Forsyth Ltd from the accounts DR CR BAD DEBTS EXPENSE P& L TRADE DEBTORS B/S 2. Calculate the provision required TRADE DEBTORS X 2% = BAD DEBTS EXPENSE P& L PROVISION FOR BAD DEBTS B/S (shown as a deduction from trade debtors) 3. Extract from Accounts 31 December 2013 PROFIT AND LOSS (Extract) £ Bad Debts BALANCE SHEET (Extract) TRADE DEBTORS Less: Prov for Bad Debts
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