ACCA F3 Past Exam Sole Trader
Annie is a sole trader who does not keep full accounting records. The following details relate to her transactions with
credit customers and suppliers for the year ended 30 June 2006:
| Trade receivables, 1 July 2005 | 300,000 |
| Trade payables, 1 July 2005 | 20,000 |
| Cash received from customers | 700,000 |
| Cash paid to suppliers | 100,000 |
| Discounts allowed | 100,000 |
| Discount received | 60,000 |
| Contra account | 8,000 |
| Trade receivables, 30 June 2006 | 100,000 |
| Trade payables, 30 June 2006 | 800,000 |
What figure should appear in Annie’s income statement for the year ended 30 June 2006 for purchases?
Answer is $948,000.
| Opening payables | 20,000 | |
| Cash paid to suppliers | 100,000 | |
| Discount received | 60,000 | |
| Contra account | 8,000 | |
| Purchase | To solve | |
| Closing payables | 800,000 |
Purchase = Closing balance trade payables + Cash paid to suppliers + Discounts received + Contra - opening balance trade payables
Purchase = Closing balance trade payables $800,000 + Cash paid to suppliers $100,000 + Discounts received $60,000 + Contra $8,000 - opening balance trade payables $20,000
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