Answered

All the business takings have been paid into the bank with the exception of TZS [tex][tex]$52,200,000$[/tex][/tex]. Out of this, Careen has paid wages of TZS [tex][tex]$33,780,000$[/tex][/tex], drawings of TZS [tex][tex]$3,600,000$[/tex][/tex], and purchase of goods TZS [tex][tex]$14,820,000$[/tex][/tex].

The following additional information is available:
\begin{tabular}{|l|l|l|}
\hline & [tex][tex]$31.12.2022 (\mathbf{TZS}^{\prime}000^{\prime})$[/tex][/tex] & [tex][tex]$31.12.2023 (\mathbf{TZS}^{\prime}000^{\prime})$[/tex][/tex] \\
\hline Stock & 32,400 & 36,600 \\
\hline Creditors for goods & 38,100 & 42,300 \\
\hline Debtors for goods & 63,600 & 59,400 \\
\hline Insurance prepaid & 1,260 & 1,320 \\
\hline Rent owing & 1,170 & - \\
\hline Fixture at valuation & 5,400 & 4,800 \\
\hline
\end{tabular}

Required:
a) Prepare the statement of affairs as at 31 December 2022.
b) Prepare the Income Statement for the year ended 31 December 2023.
c) Prepare the Statement of Financial Position as at 31 December 2023.



Answer :

GinnyAnswer
Certainly! Let's go through the details step-by-step to prepare the required financial statements.

### a) Statement of Affairs as at 31 December 2022

To prepare the statement of affairs, we list all the assets and liabilities as at 31 December 2022.

#### Assets:
- Stock: TZS 32,400
- Debtors for goods: TZS 63,600
- Insurance prepaid: TZS 1,260
- Fixture: TZS 5,400

#### Liabilities:
- Creditors for goods: TZS 38,100
- Rent owing: TZS 1,170

### Statement of Affairs as at 31 December 2022
```plaintext
Assets:
- Stock: TZS 32,400
- Debtors for goods: TZS 63,600
- Insurance prepaid: TZS 1,260
- Fixture: TZS 5,400

Total Assets: TZS 102,660

Liabilities:
- Creditors for goods: TZS 38,100
- Rent owing: TZS 1,170

Total Liabilities: TZS 39,270

Net Assets (Equity): TZS 63,390 (Assets - Liabilities)
```

### b) Income Statement for the Year Ended 31 December 2023

#### Revenue:
- Takings: TZS 52,200,000

#### Expenses:
- Wages: TZS 33,780,000
- Drawings: TZS 3,600,000
- Purchase of goods: TZS 14,820,000

Total Expenses: TZS 52,200,000

#### Net Takings:
- Net Takings after expenses: TZS 0

### Income Statement for the Year Ended 31 December 2023
```plaintext
Revenue:
- Takings: TZS 52,200,000

Expenses:
- Wages: TZS 33,780,000
- Drawings: TZS 3,600,000
- Purchase of goods: TZS 14,820,000

Total Expenses: TZS 52,200,000

Net Takings after expenses: TZS 0
```

### c) Statement of Financial Position as at 31 December 2023

To prepare the statement of financial position, we list all the assets and liabilities as at 31 December 2023.

#### Assets:
- Stock: TZS 36,600
- Debtors for goods: TZS 59,400
- Insurance prepaid: TZS 1,320
- Fixture: TZS 4,800
- Remaining takings: TZS 0 (after accounting for all expenses)

#### Liabilities:
- Creditors for goods: TZS 42,300
- Rent owing: TZS 0 (no rent owing at the end of the period)

### Statement of Financial Position as at 31 December 2023
```plaintext
Assets:
- Stock: TZS 36,600
- Debtors for goods: TZS 59,400
- Insurance prepaid: TZS 1,320
- Fixture: TZS 4,800
- Remaining takings: TZS 0

Total Assets: TZS 102,120

Liabilities:
- Creditors for goods: TZS 42,300
- Rent owing: TZS 0

Total Liabilities: TZS 42,300

Net Assets (Equity): TZS 59,820 (Assets - Liabilities)
```

And there you have the detailed solution and preparation of the required financial statements!