Unit 5 Assignment Help Needed

jewels.p

Hi,

Can anyone help me. I am trying to do an Assignment and am preparing the P & L and Statement of Affairs for a sole trader. My B.S figures do not match. The Net Assets figure is £18485 and the Closing Capital is £18100. The difference being £385 which when I worked it out is the total figures for the Prepayment and Accruals adjustments I had to make. £585 - Accruals and £200 - Prepayment.

I adjusted the figures accordingly in the P & L by deducting the prepayment from the Rent Account and adding the Accruals to the Light/Heating and Wages Account.

On the B.S I added the Prepayment to Current Assets and added the Accruals to Current Liabilities.

So what have I done wrong as I know it's something to do with the accruals and prepayments?:confused1:

Any help appreciated

Thanks

Esme

Have you adjusted the net profit figure in on the balance sheet?

Bluewednesday

I think this is Arthur Manderson and the problems is the prepayments adn accurals as you have already worked out.

The net assets figure is correct so your profit figure is incorrect. Have you adjusted for the opening balances too?

jewels.p

The amount paid to the Light/Heating Expenses was £805 with £145 accrual therefore I put £950 in the P & L Account. Wages paid was £2000 with £440 accrual therefore I put £2440 in the P & L. The Rent paid was £3000 with £200 prepayment therefore I put £2800 in the P & L.

On the Balance Sheet I put the Prepayment figure in Current Assets and the Accruals in Current Liabilities.

Am I correct in doing that?

jewels.p

Bluewednesday wrote: »

I think this is Arthur Manderson and the problems is the prepayments adn accurals as you have already worked out.

The net assets figure is correct so your profit figure is incorrect. Have you adjusted for the opening balances too?

Not sure what opening balances you mean?

Esme

jewels.p wrote: »

The amount paid to the Light/Heating Expenses was £805 with £145 accrual therefore I put £950 in the P & L Account. Wages paid was £2000 with £440 accrual therefore I put £2440 in the P & L. The Rent paid was £3000 with £200 prepayment therefore I put £2800 in the P & L.

On the Balance Sheet I put the Prepayment figure in Current Assets and the Accruals in Current Liabilities.

Am I correct in doing that?

Sounds like you are right doing that, when you changed your profit and loss account, the net profit figure will have changed, did you then change it at the bottom of the balance sheet?

Bluewednesday

jewels.p wrote: »

Not sure what opening balances you mean?

There were figures in the balance sheet for accruals for the previous years, I can't remember what they were but those expense figures don't look right because I don't think you have taken into account that there was an accrual on those accounts for 2004 and one for 2005. You have to deal with 04 and 05.

If you pm me your expense figures I can let you know what the expense figures are that make everything balance (it's on my home pc not my work one).

Bluewednesday

If I remember rightly there was a prepayment on the rent in 04 if £100, therefore the rent expense is the 100 + the 3000 - the 200 prepayment in 05.

Does that make sense now?

jewels.p

That's what was wrong I wasn't accounting for the 2004 prepayment and accruals. Thanks a lot for that I can now send off my assignment for marking. That was driving me nuts:laugh:

Trying to remember everything you have to adjust is a nightmare.

Goodness knows how I'm gonna remember it all in my exam in June. At least I can rely on notes for a bit of help with my assignments!

Thanks again

steveJ

I've finally figured this question out. What a killer ! Had to read the chapter about 5 times and today have finally cracked it. This is an old thread, but just have to say that it did help me !!!