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

Preparation of financial statements — practice question

Refer to Source A2 in the insert.
(a)[3]

Calculate the profit for the year ended 31 December 2019.

(b)[16]

Prepare the correct equity and liabilities section of the statement of financial position at 31 December 2019.

(c)[2]

Explain the event which has taken place and caused the company to record the value for goodwill.

(d)[2]

State two other reasons why goodwill might arise.

(e)[2]

Explain what is meant by the term ‘audit’.

Worked solution & mark scheme

This 25-mark question has a full step-by-step worked solution and mark scheme. One marking point: Profit from operations $63 000$

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