Review Questions

Volume 1 - Chapter 28

1. The financial year of S Gill ended on 31 December 20X4. Show the ledger
accounts for the following items including the balance transferred to the necessary
part of the financial statements, also the balance carried down to 20X5.

(a) Rent: Owing at 1 January 20X4 £56; Paid in 20X4 £434.

(b) Commission: Received in 20X4 £200, still owed at 31 December 20X4
£40.
(c) Insurance: Prepaid at 1 January 20X4 £32; Paid in 20X4 £865.

2. A Swift’s financial year ended on 31 March 20X5. Show the ledger accounts
for the following items including the balance transferred to the necessary part of
the financial statements, also the balance carried down to the next year.

(a) Rates: Owing at 1 April 20X4 £54; Paid during financial year £322; Owing
at 31 March 20X5 £76.
(b) Motor expenses; Owing at 1 April 20X4 £32; Paid during financial year
£154; Prepaid at 31 March 20X5 £12.
(c) Rent: Prepaid at 1 April 20X4 £89, Paid during financial year £1320; Owing
at 31 March 20X5 £87.
(d) Interest received; Received during financial year £65; Still owed to firm at 31
March 20X5 £8.

3. From the following trial balance of J Hall, you are asked to draw up a trading
and profit and loss account for the year ended 31 March 20X2 and a balance sheet
as at that date.

Dr Cr
£ £
Sales 52000
Purchases 23000
Stock as at 1 April 20X1 8550
Premises 75000
Equipment 18000
Returns inwards 340
Bank 1280
Wages 5600
Insurance 390
Advertising 260
Capital 94660
Drawings 11800
Returns outwards 450
Debtors 6500
Creditors 4960
Rent 1350
152070 152070
Additional information:
• Stock as at 31 March 20X2 was valued at £10660
• Depreciation is to be provided as follows: Premises 10%, Equipment 20% (both on
cost).
• A provision for doubtful debts is tot be created at 5% of debtors at the year-end.
• Accrued rent £211.
• Insurance paid in advance £120

4. The financial year of J Johnston ended on 31 December 20X7. From the

following information construct ledger accounts for each of the following:

(a) Rent: Paid during 2007 £395, prepaid for 20X8 £45.
(b) Heating costs: Owing as at 1 January 20X7 £32, paid during 20X7 £178, still
owing at end of the year £22.
(c) Received cheques during 20X7 totalling £480. Still owed £87 as at 31
December 20X7
(d) Insurance: Prepaid at 1 January 20X7 £44; Paid in 20X7 £501.