Accounting 9706 · AS & A Level · Preparation of financial statements

Preparation of financial statements — practice question

Bayliss Limited operates as a retailer of ladies’ fashion material. The trial balance that follows was taken from the accounting records on 31 December 2015.
(a)[7]

Prepare the income statement of Bayliss Limited for the year ended 31 December 2015.

(b)[5]

Prepare the statement of changes in equity of Bayliss Limited for the year ended 31 December 2015.

(c)[6]

Prepare the statement of financial position of Bayliss Limited at 31 December 2015.

(d(i))[4]

Discuss the effect of each option on the future profits of Bayliss Limited.

(d(ii))[3]

Advise the directors on which option they should select. Give reasons for your choice.

(e)[4]

Explain how a capital reserve differs from a revenue reserve.

(f)[1]

State a single example of a capital reserve.

Worked solution & mark scheme

This 30-mark question has a full step-by-step worked solution and mark scheme.

  • Full mark scheme, point by point
  • Step-by-step worked solution
  • Write your answer & get it marked instantly by AI