What is the amount of trade payables (creditors) at the end of Day 3?

(a) Nil

(b) £4,100

(c) £7,000

(d) £12,000 

The following information about Day 3, together with the previous information about Days 1 and 2, applies to question.

Day 3 

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

The following information about Day 2, together with the previous information about Day 1, applies to question.

Day 2
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

The following information about Day 1 applies to question.

Day 1

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:

Transcribed Image Text:

End of Day 2 Payment to creditors Repairs to van Depreciation of equipment Totals Cash Inventory of repair parts Fixed assets Trade payables Capital contributed + revenue - expenses