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help with balance sheet question

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spursy:
hey guys i need help with this balance sheet question
For the bank under current assets the answer is $28580 but i dont know how they got that, can someone pls help

Seamus Wong:

--- Quote from: spursy on November 01, 2019, 11:58:02 am ---hey guys i need help with this balance sheet question
For the bank under current assets the answer is $28580 but i dont know how they got that, can someone pls help

--- End quote ---

What is the reporting period?

Seamus Wong:
I assume it is one month.

Here all all the debit and credit entries to the bank account:

Debits

- Capital $20,000
- Loan - Bank of Tasman $55,000

Credits

- Bank $300
- Interest Expense $80
(the above two credit entries seem to not have been included in the answer that you have provided)
- Shop Fittings/GST clearing $38,500
- Rent Expense/GST clearing $7920

Total Debits - Total Credits = 75,000 - 46,800 = Balance of 28,200

If the Bank - $300 and interest expense - $80 was not included, then the balance would equal 28,580. Idk why they didn't include them though in their answer. Maybe the actual answer is wrong or maybe I am wrong with assuming that they would be recorded.

cotangent :

--- Quote from: Seamus Wong on November 01, 2019, 03:24:35 pm ---I assume it is one month.

Here all all the debit and credit entries to the bank account:

Debits

- Capital $20,000
- Loan - Bank of Tasman $55,000

Credits

- Bank $300
- Interest Expense $80
(the above two credit entries seem to not have been included in the answer that you have provided)
- Shop Fittings/GST clearing $38,500
- Rent Expense/GST clearing $7920

Total Debits - Total Credits = 75,000 - 46,800 = Balance of 28,200

If the Bank - $300 and interest expense - $80 was not included, then the balance would equal 28,580. Idk why they didn't include them though in their answer. Maybe the actual answer is wrong or maybe I am wrong with assuming that they would be recorded.

--- End quote ---

I think because the business is just starting out and its the first of the month, you wouldn't include loan repayments and interest payments when calculating the bank amount.

Seamus Wong:

--- Quote from: cotangent  on November 01, 2019, 04:39:30 pm ---I think because the business is just starting out and its the first of the month, you wouldn't include loan repayments and interest payments when calculating the bank amount.

--- End quote ---

Oh yeah you are right. I guess the question would have just asked to calculate the bank figure as at 1 April, not the 30th.

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