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Financial Accounting Test Paper (With Answer) No.IR 2 On Incomplete Records Question: Jim did not keep a Ledger. He began trading on 1 January Year 2000 with business premises costing $25,000 and machines costing $20,000. At 31st December Year 2006 and 2007 his other assets and liabilities were summarized as follows:
The machines are depreciated at 10% per annum using the straight line method. One of the original machines which had cost $1,500 was sold on 1 January 2007 for its written down value of $900. Jim introduced further capital of $10,000 into the business on 1 January 2007. His drawings for 2007 were $12,000 Required: Prepare (a) Statement of Affairs at 31 December 2006 and 31 December 2007, in columnar form, showing clearly the figure for closing capital for each year (18 marks) (b) calculation of Jim’s net profit for 2007 using the capitals found in (a) above (7 marks)
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