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Financial Statements Part B

Bonnie Clyde Statement of financial position as at 31 March 2015 Assets: Current assets: $5000 Non-current assets: $8000 Total assets: $13000 Equities and liabilities: Capital and reserves: $9500 Non-current liabilities: $2800 Current liabilities: $700 Total equities and liabilities: $13000

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36 views29 pages

Financial Statements Part B

Bonnie Clyde Statement of financial position as at 31 March 2015 Assets: Current assets: $5000 Non-current assets: $8000 Total assets: $13000 Equities and liabilities: Capital and reserves: $9500 Non-current liabilities: $2800 Current liabilities: $700 Total equities and liabilities: $13000

Uploaded by

haleemafaizann2008
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Chapter 9

FINANCIAL STATEMENT
PART B
LO
• Will be able to understand and recognize different assets and
liabilities
• Will be able to understand the purpose of Preparing statement of
financial position
Research
• Assets
• Liabilities
• Capital
• Non-current asset
• Current asset
• Non-current liability
• Current liability
• Why we prepare statement of financial position
Introduction
• A statement of financial position is a statement of financial position of
a business on a certain date.
• It shows the assets of the business (what business owns) and the
liabilities of a business (what the business owes).
• The assets show how the resources are being used and the liabilities
show where they come from.
Assets
• Assets are divided into two types. These are
1. Non-current assets
2. Current assets
NON CURRENT ASSETS
• These are long-term assets which are obtained for use rather than for
resale.
• These assets help the business earn revenue.
• Examples of non-current assets include land and buildings, machinery,
fixtures and motors.
CURRENT ASSETS
• These are short term assets.
• Because they arise from the normal trading activities of the business
their values are constantly changing.
• These are assets which are either in the form of cash or which can be
turned into cash relatively easily.
• Examples of current assets include inventory, trade receivables, bank
and cash.
Liabilities
• Liabilities are divided into three types. These are
1. Capital
2. Non-current liabilities
3. Current liabilities
Capital
• This represents the owner’s investment in the business and is the
amount owed by the business to the owner.
Non-current liabilities
• These are amounts owed by the business which are not due for
repayment within the next 12 months.
• Examples of non-current liabilities include long-term loan and
mortgage.
Current liabilities
• These are short term liabilities.
• Since current liabilities, like current assets, arise from the normal
trading activities of the business, their values are constantly changing.
• They are amounts owed by the business which are due for repayment
within the next 12 months.
• Examples of current liabilities include trade payables and bank
overdraft.
Test your understanding
Quiz
LO
• Understand the format of statement of financial position
Prepare the format
• Fixtures & Fittings
• Motor Vehicle
• Inventory
• Trade receivable
• Bank
• Cash
• Trade payable
• bank overdraft
• Loan
Format of statement of financial position

Samir
statement of financial position at 31 May
2009
Name of Owner
Statement of financial position at 31 May 2009
Details $ $ $
Non-current Asset Cost Depreciation Book value
Fixtures Amt (Amt) Amt
Motor vehicle Amt (Amt) Amt
Amt Amt Amt

Current Asset
Inventory Amt
Trade receivable Amt
Bank Amt
Cash Amt
Other receivables Amt Amt

Total Assets Amt

Capital
Opening Capital Amt
Add Additional capital Amt
Add Profit Amt
Less drawings (Amt) Amt

Non-current liability
Loan Amt

Current liability
Trade payable Amt
Bank overdraft Amt
other payables Amt Amt

Total Capital &Liabilities Amt


LO
• Will be able to prepare statement of financial position.
Example 9.3
Samir
statement of financial position at 31 May 2009
Details $ $ $
Non- current assets Cost Depreciation Book Value
Premises 80000 - 80000
Fixtures and Equipment 13900 - 13900
93900 - 93900
Current Assets
Trade receivables 7500
Inventory 7600
Bank 3300
Cash 100 18500
Total Assets 112400
Financed by capital
Opening capital 90000
Add profit 13900
Less drawings (9000 + 300) (9300) 94600
Details $ $ $

Non-current liability

Loan 10000

Current liability

Trade payables 7800

Total liabilities and capital 112400


Homework on 14th September 2023
Bonnie Clyde makes parts for cars and her financial ends on 31st March. after preparing her
income statement for the year ended 31 March 2015, trial balance shows the following items.
Detail $
Bank balance 500
Bank loan repayable 2018 2800
Trade payables 700
Machinery 8000
Inventory 3000
Drawings 4500
Capital account at 1 April 2014 6000
Profit for the year 7500
Trade receivables 1000

Prepare Bonnie’s statement of financial position at 31 March 2015

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