A Accounting

Balance on capital account (video below)

The following are balances on the accounts of David, a sole trader, as at the end of the current financial year and after all entries have been processed and the profit for the year has been calculated.

$

Non-current assets 21,250

Receivables 1,750

Trade payables 750

Bank loan 3,750

Allowance for depreciation, non-current assets 3,750

Inventory 1,000

Accruals 250

Prepayments 500

Bank overdraft 500

What is the balance on David’s capital account?

Answer

Debit Credit
$ $
Non-current assets 21,250
Receivables 1,750
Trade payables 750
Bank loan 3,750
Allowance for depreciation, non-current assets 3,750
Inventory 1,000
Accruals 250
Prepayments 500
Bank overdraft             – 500
24,500 9,000

Capital = $24,500 – $9,000= $15,500

 

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