Self-test
(Text book contains questions A5.1 to A5.5)
Financial Accounting
T Harding and Co has commenced business as a domestic appliance repair engineering
company with a start-up cash balance of £15,000, contributed by the owner, T Harding. On Day
1, T Harding and Co purchased a van costing £5,000, for cash. On the same day, the business
acquired repair parts costing £8,000, on credit.
While answering these questions, you may find it helpful to enter the transactions of Day 1 in a
worksheet of the following type:
Cash Inventory
(stock) of
repair parts
Non-current
(fixed)
assets
Account
payable
(trade
creditor)
Capital
contributed
by owner
£ £ £ £ £
Financial Accounting
On Day 2, equipment was purchased at a cost of £4,000, on credit. Wages of £200 were paid to
support staff. The company carried out repair work for which it received £7,000 in cash from
the customer. In carrying out this repair work, half of the inventory (stock) of repair parts was
used up.
While answering these questions, you may find it helpful to enter the transactions of Day 2 in a
worksheet that starts with the totals from Day 1
Cash Inventory
(stock) of
repair
parts
Non-current
(fixed) assets
(van +
equipment)
Account
payable
(trade
creditor)
Capital
contributed
+ revenue
expenses
£ £ £ £ £
Financial Accounting
Payment of £5,000 is made to creditors. The van breaks down, incurring repair costs of £350,
paid in cash. Depreciation (reduction in value) of £400 on equipment is to be taken into
account.
While answering these questions, you may find it helpful to enter the transactions of Day 3 in a
worksheet which starts with the totals from Day 2
Cash
Inventory
of repair
parts
Fixed
assets
Trade
payables
Capital
contributed
+ revenue
expenses
£ £ £ £ £
Financial Accounting
Application
(Text book contains questions B5.1 and B5.2)
spreadsheet is provided for use in part (b) of this question.
July Transaction £
Financial Accounting
Self-test
Text book contains solutions to A5.1 to A5.5
Financial Accounting
Day 1
Assets Liabilities = Ownership interest
Questions A5.13 and A5.15
Day 2
Financial Accounting
Day 3
Cash Inventory
of repair
parts
Fixed
assets
Trade
payables
Capital
contributed
+ Revenue
Expenses
£ £ £ £ £
Financial Accounting
Application
Text book contains solutions to B5.1 and B5.2
No £ Effects
Financial Accounting
Financial Accounting
Financial Accounting
Peter (Television) Company
Financial Accounting
Real-world case
Self-test: Supplement
S5.1
L1 CASH
Date Particulars Page Debit Credit Balance
Financial Accounting
Financial Accounting