Accounting 9706 · AS & A Level · Accounting for non-current assets

Accounting for non-current assets — practice question

The balances shown below were taken from the accounting records of P Limited on 31 August 2021.
(a)[3]

Prepare the journal entry to record the revaluation of the freehold property on 1 September 2020. No narrative is needed.

(b)[12]

Prepare the income statement for the year ended 31 August 2021. Use the next page for your workings.

(c)[3]

Prepare a statement showing the retained earnings balance at 31 August 2021 after the income statement has been prepared.

(d)[2]

State two methods a business could use to lower the level of trade receivables.

(e)[7]

Advise the directors which option they should choose. Justify your decision.

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