Question

(6): Speed-way has provided the following information for his Business although he does not keep proper accou pufal of all the asset mon 31st December, 2013 K 61,820 13,680 vense Details Fixed Assets at Net Book Value Inventory/c/Purchase Accounts Receivable Arale Debtor 4,300 Accounts Payable Trade Creditor 3,190 Increase Try to look at the Expeditures The following Information is available; Amount (K) 210,000 Assef 130,900 iliy 31st December, 2014 K Combined Cash and Bank Account 63,360 Ind 14,760 5,070 Increase 2,790 Decrease Details Opening Cash in Hand Accounts Payable Additional Capital 5. 6,000 Capital Casb Book Extract which ac Fristing Amount (K) 2,840 52,200 21,280 Details Opening Bank Overdraft Accounts Payable Miscellaneous Expenses P/S Drawings 21,800 Machinery set 8,580 Closing Cash in Hande 330 Gross Income for the year ended 30th December, 2014 was K80,950 -refers to sales transaction. Required: a) Using the Information provided, draw up Kolau Wara's Opening Statement of Affairs. b) Compute the Credit Sales for the Year 2014. c) Calculate the Depreciation for the Year. (Show clearly workings); Note: Depreciation rates not given​

Answer 1

To determine a bank's net worth, create a T-account balance sheet, list assets (reserves, government bonds, loans) and liabilities (deposits), and subtract the total liabilities from the total assets. In this case, the bank's net worth is calculated to be $220.

Step-by-step explanation:

When setting up a T-account balance sheet for a bank and calculating its net worth, one must list the bank's assets and liabilities. For the bank in question, with deposits of $400, reserves of $50, government bonds worth $70, and loans of $500, the T-account balance sheet would be formatted as follows:

• Assets
  
• Liabilities
  To calculate the bank's net worth, we subtract the total liabilities from the total assets.

1. Total Assets = Reserves + Government Bonds + Loans
2. Total Assets = $50 + $70 + $500 = $620
3. Total Liabilities = Deposits = $400
4. Net Worth = Total Assets - Total Liabilities
5. Net Worth = $620 - $400 = $220

Therefore, the bank's net worth is $220.