This accounting problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.
ScanSolve AI Answer
Hey NEUTRAL, good to see you again. Here are the solutions to your assignment: SECTION A: MULTIPLE CHOICE 1. The balance sheet shows the financial position of a business at a given point in time. A) True 2. Which of the following is an example of a non-current asset? C) Buildings 3. The basic accounting equation is: B) Assets = Liabilities + Owners' Equity 4. Which of the following is an example of a current liability? D) Accounts Payable SECTION B: SHORT ANSWER QUESTIONS 1. A current liability is an obligation that a business expects to settle within one year. Example: Accounts Payable* (money owed to suppliers). 2. Owner's capital or owner's equity is the amount of money or assets the owner has invested in the business, plus any accumulated profits that have been retained in the business. SECTION C: BALANCE SHEET Step 1: Calculate the missing figures (A, B, C, D, E, F, G). A (Total Current Assets): A = Cash at Bank + Debtors A = R12,400 + R8,000 = R20,400 B (Total Non-Current Assets): B = Equipment + Vehicles B = R11,700 + R15,000 = R26,700 C (TOTAL ASSETS): C = Total Current Assets + Total Non-Current Assets C = R20,400 + R26,700 = R47,100 D (Total Current Liabilities): D = Creditors + Bank Overdraft D = R1,400 + R1,000 = R2,400 E (Total Non-Current Liabilities): E = Bank Loan = R15,000 F (Total Owners' Equity): F = Capital = R17,200 G (TOTAL LIABILITIES AND OWNERS' EQUITY): G = Total Current Liabilities + Total Non-Current Liabilities + Total Owners' Equity G = R2,400 + R15,000 + R17,200 = R34,600 Step 2: Answer the questions based on the calculated figures. 1. The missing figures are: A: R20,400 B: R26,700 C: R47,100 D: R2,400 E: R15,000 F: R17,200 G: R34,600 2. The total current assets are: R20,400 3. The total non-current assets are: R26,700 4. The total assets are: R47,100 5. The total current liabilities are: R2,400 6. The total non-current liabilities are: R15,000 7. The total of Total Liabilities and Owners' Equity is: R34,600 8. The total owner's equity is: R17,200 SECTION D: INCOME STATEMENT Step 1: Calculate Gross Profit. Gross Profit = Sales - Cost of Sales Gross Profit = R20,000 - R12,000 = R8,000 Step 2: Calculate Total Expenses. Total Expenses = Wages + Stationery + Rent + Water/Light + Loan Interest Total Expenses = R700 + R300 + R700 + R300 + R100 = R2,100 Step 3: Calculate Net Profit.