Accounting for Managers: Interpreting accounting information for decision-making

Appendix 2

Solutions to Questions

Solutions for Chapter 6

6.1
Kazam Services’ accounting records are shown in Table A2.1.

Kazam Services

Profit and Loss account

Income 70,000

Less expenses 40,000

Operating profit 30,000

Balance Sheet

Fixed assets 650,000

Less depreciation 20,000 630,000

Debtors 150,000

Less creditors:

Bank overdraft 40,000

Creditors 60,000 100,000

Net current assets 50,000

Total assets less current liabilities 680,000

Long-term loans 450,000

Net assets 230,000