5.6 Incomplete records (3)
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1.
ABC Limited has the following balances at 31st December 2023:
- Cash at Bank: £12,000
- Debtors: £25,000
- Inventory: £8,000
- Creditors: £18,000
- Capital: £30,000
Required: Prepare an opening statement of affairs for ABC Limited as at 31st December 2023.
Opening Statement of Affairs
As at 31st December 2023
| Assets | Liabilities & Equity |
| Cash at Bank: £12,000 | Creditors: £18,000 |
| Debtors: £25,000 | Capital: £30,000 |
| Inventory: £8,000 | Total |
| Total Assets: £45,000 | Total Liabilities & Equity: £48,000 |
2.
John invested £10,000 in his business on 1st January 2021. On 31st December 2021, his capital was £12,000. On 31st December 2022, his capital was £11,000. Calculate John's profit or loss for the year ended 31st December 2021.
Calculation:
- Profit for 2021 = Capital at end of 2021 - Capital at start of 2021
- Profit for 2021 = £12,000 - £10,000 = £2,000
Answer: John's profit for the year ended 31st December 2021 is £2,000.
3.
Question 1
The cost price of an item is £20. It is sold at a mark-up of 40%. The selling price is then marked up again by 20% to arrive at the retail price. Calculate the retail price.
Step 1: Calculate the mark-up amount on the cost price.
- Mark-up = 40% of £20 = 0.40 x £20 = £8
Step 2: Calculate the selling price.
- Selling Price = Cost Price + Mark-up = £20 + £8 = £28
Step 3: Calculate the mark-up amount on the selling price.
- Mark-up = 20% of £28 = 0.20 x £28 = £5.60
Step 4: Calculate the retail price.
- Retail Price = Selling Price + Mark-up = £28 + £5.60 = £33.60
Therefore, the retail price is £33.60.