The Sage Course Companion on Financial Accounting is an accessible introduction to the subject that will help readers to master key concepts and enhance their thinking skills in line with course requirements. It provides support on how to revise for exams and prepare for and write assessed pieces.
Now put your notes away and attempt these two questions.
Bright Red Ltd involves the preparation of a balance sheet and profit and loss account.
Clear Blue Ltd requires the preparation of a cash flow statement.
Do not look at the answer until you have attempted the whole question.
Practice Question: Bright Red Ltd
The trial balance of Bright Red Ltd as at 31 December 2007 was as follows:
The following information is available, none of which has been taken into account in the preparation of the trial balance above:
- Stock as at 31 December 2007 is valued at £44,000.
- Vehicles are primarily used for distribution; premises are used equally between production, distribution and administration; equipment is used equally between production and administration.
- Premises are to be depreciated 1 per ...