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10 marksThe Balance Sheet and Accounting Equation

CSEC Principles of Accounts · January 2018 · Paper 2 · Question 1(a)

A list of ledger balances extracted from Best Bake at 31 December 2017 is provided: Inventories 25 000, Accounts payable 54 500, Buildings at book value 250 000, Loan payable 2018 35 000, Accounts receivable 22 000, Motor vehicles at book value 89 000, Bank 17 000, Prepaid expenses 4 000, Machinery at book value 120 000, Cash at hand 8 000, Capital ?, Wages owing 2 500, Bank loan (2025) 275 000.

Prepare a Classified Statement of Financial Position (Balance Sheet) for the year ended 31 December 2017, using the order of liquidity.

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  1. 1(b)In the table provided, state the effect of each of the following transactions on the balance sheet equation (Assets, Liabilities, Capital): (i) The owner…[4 marks]
  2. 1(c)Using the provided ledger form, prepare the cash account and balance the account at the end of the month.[6 marks]

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