Sam has prepared his income statement for the year ended 31 December 2011, and the balances shown in Table 3.2 remain on his trial balance.

Note that, because the trial balance in Table 3.2 has been prepared after the income statement has been produced, all of the accounts used in preparing the income statement are no longer included on the trial balance. Instead, you will see that the profit for the year is shown. (This profit is the same as the one calculated in Chapter 2.) In addition, the closing inventory figure is shown on this trial balance because it has been adjusted for in preparing the income statement.

Using Smart Sports’ trial balance given above:

a) Identify the business’s non-current assets.

b) Identify the business’s current assets and current liabilities.

c) Determine whether the business has any non-current liabilities.

d) Prepare the statement of financial position as at 31 December 2011, using the pro-forma given in Table 3.3.

Transcribed Image Text:

Table 3.2 Smart Sports Trial balance as at 31 December 2011 (after the income statement has been prepared) Debit Credit Capital 10,000 Loan 12,000 Drawings 7,200 Printing machine 5,500 Computer 3,500 Bank balance 11,080 Trade receivables 4,100 Inventory at 31 December 2011 2,700 Trade payables 2,400 Draft profit for the year 9,680 34,080 34,080