Accounting Igcse Cie
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Sole-Traders Igcse Cie
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Statement-Of-Financial-Position Igcse Cie
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Statement-Of-Financial-Position Igcse Cie
Exam code:0452 & 0985
Statement of financial position for limited companies
What is the layout of the statement of financial position of a limited company?
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The statement of financial position for limited companies is mostly the same as that of a sole trader and a partnership
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There is no change to the non-current assets, current assets and current liabilities sections
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Any debentures and redeemable preference shares are included in the non-current liabilities
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The capital section of the statement of financial position is called the equity section
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The equity section includes
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The share capital
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Ordinary and non-redeemable preference shares
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The general reserve
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The retained earnings
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The information for the equity section is obtained from the statement of changes in equity
Worked Example
Abrakadabra Limited prepares its financial statements to 31 March each year.
On 31 March 2024, the following balances were provided:
|
$ |
|
|
Inventory |
7 080 |
|
Fittings at book value |
140 000 |
|
Trade receivables |
14 400 |
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Other receivables |
1 800 |
|
Bank |
14 965 |
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Trade payables |
8 415 |
|
Other payables |
6 390 |
|
4% Debentures (repayable 2034) |
46 000 |
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Ordinary share capital |
80 000 |
|
Retained earnings |
25 800 |
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General reserve |
2 200 |
Additional information:
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$5 600 dividends were paid on ordinary shares
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The profit for the year ended 31 March 2024 was $15 040
Prepare the statement of financial position at 31 March 2024 for Abrakadabra Limited.
Answer
Find the updated retained earnings:
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Add the profit for the year
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Subtract the dividends paid
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$25 800 + $15 040 – $5 600 = $35 240
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Abrakadabra Limited Statement of Financial Position at 31 March 2024 |
||
|
$ |
$ |
|
|
Non-current assets |
||
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Fittings at book value |
140 000 |
|
|
Current assets |
||
|
Inventory |
7 080 |
|
|
Trade receiavbles |
14 400 |
|
|
Other receivables |
1 800 |
|
|
Bank |
14 965 |
38 245 |
|
Total assets |
178 245 |
|
|
Equity and liabilities |
||
|
Equity |
||
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Ordinary share capital |
80 000 |
|
|
General reserve |
2 200 |
|
|
Retained earnings |
35 240 |
|
|
117 440 |
||
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Non-current liabilities |
||
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4% Debentures (repayable 2034) |
46 000 |
|
|
Current liabilities |
||
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Trade payables |
8 415 |
|
|
Other payables |
6 390 |
14 805 |
|
Total equity and liabilities |
178 245 |
|
Responses