Stalla began trading on 1 April 2021. Every receipt is banked, and every payment is made through the bank. She has not kept a complete set of books, 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 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]
Show the total receipts and total payments in Stalla’s bank account, including the cash drawings for the year ended 31 March 2022. Balance the account and carry the balance down to 1 April 2022.
(b)[2]
Calculate Stalla’s total drawings for the year ended 31 March 2022.
(c)[5]
Prepare a statement of affairs to work out Stalla’s capital at 31 March 2022.
(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. Support your answer.
Worked solution & mark scheme
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