Q14) At the end of February 2021, Gakuru enterprise has the following items: Buildings 320,000rwf, furniture…

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Q14) At the end of February 2021, Gakuru enterprise has the following items: Buildings 320,000rwf, furniture 90,000rwf, stock of goods 36,000rwf, debtors 30,500rwf, creditors 19,500rwf, cash at bank 25,000rwf, overdraft 32,000rwf. Required:

ScanSolve AI Tutor · Accepted Answer

Here is the Statement of Financial Position for Gakuru enterprise:

Classify the given items into assets, liabilities, and capital.
- Non-Current Assets:
  
  Buildings: 320,000 frw
  
  Furniture: 90,000 frw
- Current Assets:
  
  Stock of goods: 36,000 frw
  
  Debtors: 30,500 frw
  
  Cash at bank: 25,000 frw
- Current Liabilities:
  
  Creditors: 19,500 frw
  
  Bank Overdraft: 32,000 frw
- Capital:
  
  The amount 450,000 frw is listed without a label. We will calculate the capital using the accounting equation (Assets - Liabilities) to confirm this figure.
Calculate Total Assets.
Total Non-Current Assets = $320,000 + 90,000 = 410,000$ frw
Total Current Assets = $36,000 + 30,500 + 25,000 = 91,500$ frw
Total Assets = Total Non-Current Assets + Total Current Assets = $410,000 + 91,500 = 501,500$ frw
Calculate Total Liabilities.
Total Liabilities = Creditors + Bank Overdraft = $19,500 + 32,000 = 51,500$ frw
Calculate Capital.
Capital = Total Assets - Total Liabilities
Capital = $501,500 - 51,500 = 450,000$ frw
This confirms that the 450,000 frw mentioned in the list is indeed the capital.
Prepare the Statement of Financial Position (Balance Sheet).
$\textbf{Gakuru Enterprise} \\ \textbf{Statement of Financial Position} \\ \textbf{As at 28 February 2021}$ $\begin{array}{|l|r|} \hline \textbf{Assets} & \textbf{Amount (frw)} \\ \hline \textbf{Non-Current Assets} & \\ \text{Buildings} & 320,000 \\ \text{Furniture} & 90,000 \\ \quad \textbf{Total Non-Current Assets} & \textbf{410,000} \\ \textbf{Current Assets} & \\ \text{Stock of goods} & 36,000 \\ \text{Debtors} & 30,500 \\ \text{Cash at bank} & 25,000 \\ \quad \textbf{Total Current Assets} & \textbf{91,500} \\ \textbf{TOTAL ASSETS} & \textbf{501,500} \\ \hline \textbf{Equity and Liabilities} & \\ \textbf{Owner's Equity} & \\ \text{Capital} & 450,000 \\ \textbf{Current Liabilities} & \\ \text{Creditors} & 19,500 \\ \text{Bank Overdraft} & 32,000 \\ \quad \textbf{Total Current Liabilities} & \textbf{51,500} \\ \textbf{TOTAL EQUITY AND LIABILITIES} & \textbf{501,500} \\ \hline \end{array}$
The capital of Gakuru Enterprise as at 28 February 2021 is $\boxed{\text{450,000 frw}}$ .

Q14) At the end of February 2021, Gakuru enterprise has the following items: Buildings 320,000rwf, furniture 90,000rwf, stock of goods 36,000rwf, debtors 30,500rwf, creditors 19,500rwf, cash at bank 25,000rwf, overdraft 32,000rwf. Required:

Answer

Step-by-step solution

Classify the given items into assets, liabilities, and capital.

Calculate Total Assets.

Calculate Total Liabilities.

Calculate Capital.

Prepare the Statement of Financial Position (Balance Sheet).

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