Andy Limited’s statement of financial position at 30 June 2019 is shown. The following transactions took place in the first week of July 2019:

• 1 July 2019: paid a trade payable with a bank transfer of £2,500 and received cash of £3,000 by bank transfer from a trade receivable.

• 2 July 2019: took out a bank loan (full repayment is due on 30 June 2022) with which to buy a new vehicle costing £20,000. The vehicle purchase agreement was signed on 2 July 2019.

• 4 July 2019: sold goods which had cost Andy £7,500 to a customer on credit terms, the customer agreeing to pay for those goods on 3 August 2019. The goods were sold for a selling price of £10,000.

• 5 July 2019: sold goods which had cost Andy £2,500 to a customer for £3,250. The customer paid cash for the goods.

• 6 July 2019: received new inventory from a supplier. The new inventory cost £15,000 and Andy Limited has agreed to pay for the inventory on 5 August 2019.

• 7 July 2019: paid tax of £3,000 and a trade payable of £7,000 by transfers from the bank account.

Required

Show how the above transactions would increase or decrease the various balances on Andy’s statement of financial position and draw up and balance the new statement of financial position at 7 July 2019.

Transcribed Image Text:

Andy Limited Statement of financial position at 30 June 2019 ASSETS Non-current assets Property, plant and equipment Current assets Inventories Trade receivables Cash and cash equivalents Total assets LIABILITIES Current liabilities Trade payables Taxation Non-current liabilities Bank loan (long-term borrowings) Total liabilities Net assets EQUITY Called up share capital Retained earnings Total equity £ 320,000 50,000 75,000 20,000 145,000 465,000 80,000 20,000 100,000 250,000 350,000 115,000 20,000 95,000 115,000