Unit 14 - Statement of financial position


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