Instructor Manual on

S olutions Manual

Accounting: An

Introductio n Instructor Manual on the Web Fourth edition Eddie McLaney Peter Atrill 1 / 4

Solutions to Exercises Solution to Exercise 2.4 Joe Conday Balance sheet as on 1 March £ £ Bank 20,000 Capital 20,000 Balance sheet as on 2 March ££ Bank (20,000 – 6,000) Capital14,000 20,000 Fixtures and fittings Trade payables6,0008,000 Inventories 8,000 Total assets28,000 Total equity and liabilities 28,000 Balance sheet as on 3 March ££ Bank (14,000 + 5,000) Capital19,00020,000 Fixtures and fittings Trade payables6,0008,000 Inventories 8,000 Borrowings 5,000 Total assets33,000 Total equity and liabilities 33,000 Balance sheet as on 4 March ££ Bank (19,000 – 7,000 – 20 11,8000)Capital (20,000 −200) 19,800 Fixtures and fittings Trade payables6,0008,000 Inventories8,000 Borrowings5,000 Motor car 7,000 Total assets32,800 Total equity and liabilities 32,800 Balance sheet as on 5 March ££ Bank (11,800 – 2,500) Capital (19,8009,300−500) 19,300 Fixtures and fittings Trade payables6,0008,000 Inventories8,000 Borrowings5,000 Motor car 9,000 Total assets32,300 Total equity and liabilities 32,300 10

. 2 / 4

McLaney & Atrill, Accounting: An Introduction Instructor Manual on the Web, 4th edition, Instructor’s Manual

Balance sheet as on 6 March ££ Bank (9,300 +Capita2,000 – 1,000) 10,300l (19,300 + 2,000) 21,300 Trade payablesFixtures and fittings 8,000 6,000 Borrowings (5,000Inventories 8,000−1,000) 4,000 9,000Motor car

Total assets 33,300 Total equity and liabilities 33,300 11

. 3 / 4

McLaney & Atrill, Accounting: An Introduction Instructor Manual on the Web, 4th edition, Instructor’s Manual

Solution to Exercise 2.6 Balance sheet as at the end of the week

£Assets £ Claims

Property 145,000 Capital

63,000Furniture and fittings

(203,000 + 11,000 – 8,000 + 23,000

– 17,000 + 100,000 + 10,000)

322,000

Motor van 10,000 Borrowings (Bank overdraft)

(43,000 – 11,000 – 18,000 – 100,000

+ 13,000)

(73,000)

Trade payablesInventories

(28,000 – 8,000 – 17,000 + 14,000)

17,000

(23,000 + 14,000 – 13,000)

24,000

Trade receivables

38,000(33,000 + 23,000 – 18,000)

Total assets 273,000Total equity and liabilities 273,000

Since the bank balance is now positive, we can rewrite this balance sheet as:

Balance sheet as at the end of the week

£Claims£Assets 322,000Capital145,000Property 63,000Furniture and fittings 10,000Motor van 24,000Trade payables17,000Inventories 38,000Trade receivables 73,000Cash at bank Total assets 346,000Total equity and liabilities 346,000 12 .

• / 4