Limited Liability Companies | Balance Sheet | Statement of Financial Position | Past Paper Questions

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In this video I use two past paper questions to show how to prepare the Balance Sheet/Statement of Financial Position for limited liability companies.

The 2006 May question (Price Rite Limited) presents us with a balance sheet in the HORIZONTAL format with no classifications of the assets and liabilities as current or non-current, and some items in the wrong sections.

We need to redraft the balance sheet using the VERTICAL format and using proper classifications (headings - current and non-current).

NOTE: I use the following format/structure when preparing my balance sheets:
- the order of permanence (starting with non-current assets),
- the "Assets minus Liabilities = Capital" format, and
- I show net working capital in my balance sheet.

Therefore it should be noted that there are alternative presentations to this solutions that are also correct.

Feel free to take a picture of your solutions, post them on Instagram and tag me using my handle @adapttuition to show me what format you use.

In the 2019 May question (Freight Express Company Limited) we are asked to prepare a Statement of Changes in Equity for the first part of the question.

I make a case that this item is not actually on the PoA syllabus
(CXC 10/G/SYLL 17 - revised edition published 2019 Nov) or at least it is not explicitly stated on the syllabus (Section 9 - Accounting for Limited Liability Companies, Co-Operatives, and Non-Profit Organizations, Specific Objective 9 - content point a).

I also acknowledge that it is difficult to spell out every single detail that is required on a syllabus and ask if anyone who knows whether this item is actually on the syllabus or not can kindly provide this clarification in the comments section below.

I offer two (of many) possible solutions to this question by preparing an appropriation account and an alternative that was based on the format provided in the IFRS for SMEs (2015 edition) section 6 - The statement of changes in equity and statement of income and retained earnings.

Note was made that the format for the statement presented in the IFRS Foundation's Training Module for this section was beyond the scope of the CSEC syllabus (and even the CAPE syllabus for that matter of fact) and it had to be adapted to suit the CSEC level.

I also left in a point of ambiguity regarding whether the general reserve should be included in this statement or classified as part of equity at all to encourage students to research this point on their own.

Further, none of the balance sheets presented show share premium in the reserves. You can find reference to it and examples of balance sheets containing share premium in this video showing how to prepare the journal entries to record the issue of shares and debentures:
   • Limited Liability Companies | Journal...  

You can also look at this video to see how to prepare the appropriation account for limited liability companies using this link:
   • Limited Liability Companies | Appropr...  

I make mention of the receipts and payments account for non-profit organizations during this video. You can find my video on that topic here:
   • CSEC PoA | Receipts and Payments acco...  

You can use this link to go to the CXC store to buy a subscription for past papers which you can use to practice:
https://cxc-store.com/

I prepare and provide FREE PAST PAPER SOLUTIONS for PoA, Maths, and Add Maths on my Facebook page which you can find here:
  / adapttuition  

There are errors in some of the solutions which I am slowly fixing when they are brought to my attention.

As I mention in this (and many other videos) we all make mistakes :-)

It is important to learn from these mistakes as we move forward.

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Remember,
you can be anything you want to be,
you can do anything you want to do,
if you have the correct mindset,
and put in the WORK.

Along the way you're bound to struggle and make mistakes.
This is a normal part of the process do not run from it.
This is where the learning and growth take place.

And, if what you're doing isn't working,
then you need to try

A
Different
Approach
To it

ADApT

Because change is the only constant.

Thanks very much for watching!

Please feel free to leave any questions in the comments section below :)

Chris ^_^