UNIT 4

Sole Traders – Financial Statements

Copyright 1995 by Thames Management Centre International. All right reserved. No part of this lecture notes may be reproduced in any form or by any means, without the permission in writing from Thames.

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4.1 Introduction
At the end of the business financial year end, a set of financial statements will be prepared by the company for reporting to the owner of the business as well as for submission to the local tax authority.
However, financial statements can be prepared frequently, usually monthly, for management use. Management uses the financial statements as a guide to future business operation planning and decision-makings.
Financial statement prepared must comply with the …show more content…
Dep. | N.B.V | | | | | Land | 100,000 | - | 100,000 | Buildings | 200,000 | 10,000 | 190,000 | Plant and Machinery | 50,000 | 15,000 | 35,000 | Office equipment | 30,000 | 8,000 | 22,000 | Furniture and fittings | 10,000 | 5,000 | 5,000 | Motor and vehicles | 80,000 | 30,000 | 50,000 | | 470,000 | 68,000 | 402,000 | | | | | Investments (Quoted) | | | 30,000 | | | | 432,000 | | | | | Current Assets | | | | Stock | | 35,000 | | Debtors | 46,000 | | | Less : Provision for doubtful debt | 2,000 | 44,000 | | Bank (OCBC) | | 11,000 | | Prepayment | | 500 | | | | 90,500 | | | | | | Less Creditors – amount fallin due within a year | | Creditors | 50,000 | | | Accruals | 2,000 | | | Bank overdraft (OUB) | 15,000 | 67,000 | 23,500 | | | | 455,500 | | | | | Less Creditors – amount falling due after more than a year | | Loan (31/12/xx) | | | 150,000 | | | | | Net Assets | | | 305,500 | | | | | Finance by | | | | | | | | Capital | | | 250,000 | Add : Net Profit | | | 136,400 | | | | 386,400 | Less: Drawings | | | 80,900 | Capital employed | | | 305,500 | | | | |

4.7 Exercises
Question 1
The following information has been extracted from the books of Tee on 31 December 19x8. You are required to prepare the followings: a. Trial Balance; b. Trading,