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Exercise 3.4 (Solution on page 67) The following as a balance sheet of TT and Co. at the end of its first year (31 December 2009) of trading: 'The prepaid expenses consisted of rates (300) and rent (5,000). 2 The accrued expenses consisted of wages (6306) and electricity (6206). During 2010, the following transactions took place: 1. The owners withdrew capital in the form of cash of 20,000 2. Premises continued to be rented at an annual rental of 20,000. During the year, rent of 15,000 was paid to the owner of the premises. 3. Rates on the premises were paid during the year as follows: for the period 1 April 2010 to 31 March 2011 1,300. 4. A second delivery van was bought on January 1, 2010 for 13,000. This is expected to be used in the business for four year and then to be sold for 3,000. 5. Wages totaling 36,700 were paid during the year. At the end of the year, the business owed 860 of wages for the last week of the year. 6. Electricity bills for the first three quarters of the year and 620 for the last quarter of the previous year were paid totaling 1,820. After 31 December 2010, but before the accounts had been finalized for the year, the bill for the last quarter arrived showing a charge of 6906 . 7. Inventories totaling 76,000 were bought on credit. 8. Sales revenue on credit totaled 179,0006 (cost 89,000 ) and sales revenue in cash totaled 54,000 (cost 25,000). 9. Receipts from trade receivables totaled 160,000. 10. Payments to trade payables totaled 56,000

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