Stalla began trading on 1 April 2021. Every receipt is paid into the bank and every payment is made from the bank. She has not kept a full set of accounts, but she has supplied the information below.
Summary of receipts and payments for the year ended 31 March 2022
Receipts:
Capital introduced $8000
Loan received (repayable 2027) $5000
Sales (all in cash) $36000
Payments:
Trade payables $17850
Fixtures and fittings $12000
General expenses $1920
Rent and insurance $7100
Drawings ?
Bank balance at 31 March 2022 $2330
(a)[4]
Record the total receipts and total payments in Stalla’s bank account, showing the cash drawings for the year ended 31 March 2022. Balance the bank account and bring the balance down on 1 April 2022.
(b)[2]
Calculate Stalla’s total drawings for the year ended 31 March 2022.
(c)[5]
Prepare a statement of affairs so that Stalla’s capital at 31 March 2022 can be calculated.
(d)[4]
Calculate Stalla’s profit for the year ended 31 March 2022.
(e)[5]
Advise Stalla whether or not she should start selling on credit terms. Justify your answer.
Worked solution & mark scheme
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