Draw Up the Following Accounts

Oct 13, 2025 by magicalceylontours.com 3 views

Introduction

Rexel Stores is a partnership between Alex and Rex, with the financial year ending on 29 February 2020. The following balances and totals have been recorded in the books of Rexel Stores, and it is essential to draw up the necessary accounts in the general ledger to ensure accurate financial reporting.

Balance Sheet

The balance sheet provides a snapshot of the company's financial position at a specific point in time. It includes the assets, liabilities, and equity of the business.

Assets

Asset	Balance
Cash	$10,000
Accounts Receivable	$20,000
Inventory	$30,000
Property, Plant, and Equipment	$50,000
Total Assets	$110,000

Liabilities

Liability	Balance
Accounts Payable	$15,000
Loans Payable	$20,000
Total Liabilities	$35,000

Equity

Equity	Balance
Alex's Capital	$30,000
Rex's Capital	$20,000
Retained Earnings	$25,000
Total Equity	$75,000

Income Statement

The income statement provides an overview of the company's revenues and expenses over a specific period.

Revenues

Revenue	Amount
Sales	$100,000
Interest Income	$5,000
Total Revenues	$105,000

Expenses

Expense	Amount
Cost of Goods Sold	$60,000
Operating Expenses	$20,000
Total Expenses	$80,000

Net Income

Net Income	Amount
Net Income	$25,000

Draw Up the Following Accounts

To draw up the following accounts in the general ledger, balance, and discussion category, we need to analyze the financial data and prepare the necessary journal entries.

Journal Entries

Date	Account	Debit	Credit
29 Feb 2020	Cash	$10,000
29 Feb 2020	Accounts Receivable	$20,000
29 Feb 2020	Inventory	$30,000
29 Feb 2020	Property, Plant, and Equipment	$50,000
29 Feb 2020	Accounts Payable	$15,000
29 Feb 2020	Loans Payable	$20,000
29 Feb 2020	Alex's Capital	$30,000
29 Feb 2020	Rex's Capital	$20,000
29 Feb 2020	Retained Earnings	$25,000
29 Feb 2020	Sales		$100,000
29 Feb 2020	Cost of Goods Sold	$60,000
29 Feb 2020	Operating Expenses	$20,000
29 Feb 2020	Interest Income		$5,000

Ledger Accounts

Account	Debit	Credit
Cash	$10,000
Accounts Receivable	$20,000
Inventory	$30,000
Property, Plant, and Equipment	$50,000
Accounts Payable	$15,000
Loans Payable	$20,000
Alex's Capital	$30,000
Rex's Capital	$20,000
Retained Earnings	$25,000
Sales		$100,000
Cost of Goods Sold	$60,000
Operating Expenses	$20,000
Interest Income		$5,000

Balance

Account	Balance
Cash	$10,000
Accounts Receivable	$20,000
Inventory	$30,000
Property, Plant, and Equipment	$50,000
Accounts Payable	$15,000
Loans Payable	$20,000
Alex's Capital	$30,000
Rex's Capital	$20,000
Retained Earnings	$25,000
Sales	$100,000
Cost of Goods Sold	$60,000
Operating Expenses	$20,000
Interest Income	$5,000

Discussion

The financial data of Rexel Stores indicates a strong balance sheet with a total asset value of $110,000 and a total equity value of $75,000. The company has a significant amount of cash and inventory, which suggests a stable financial position. However, the accounts payable and loans payable indicate a need for careful management of the company's liabilities.

The income statement shows a net income of $25,000, which is a positive indicator of the company's financial performance. The sales revenue of $100,000 and the interest income of $5,000 contribute to the net income. However, the cost of goods sold and operating expenses of $80,000 reduce the net income.

In conclusion, the financial data of Rexel Stores indicates a stable financial position with a strong balance sheet and a positive net income. However, careful management of the company's liabilities and expenses is necessary to ensure continued financial success.

Conclusion

Frequently Asked Questions

In this article, we will answer some frequently asked questions related to the financial data of Rexel Stores.

Q1: What is the total asset value of Rexel Stores?

A1: The total asset value of Rexel Stores is $110,000, which includes cash, accounts receivable, inventory, and property, plant, and equipment.

Q2: What is the total equity value of Rexel Stores?

A2: The total equity value of Rexel Stores is $75,000, which includes Alex's capital, Rex's capital, and retained earnings.

Q3: What is the net income of Rexel Stores?

A3: The net income of Rexel Stores is $25,000, which is calculated by subtracting the total expenses from the total revenues.

Q4: What are the main sources of revenue for Rexel Stores?

A4: The main sources of revenue for Rexel Stores are sales and interest income.

Q5: What are the main expenses for Rexel Stores?

A5: The main expenses for Rexel Stores are cost of goods sold and operating expenses.

Q6: What is the current financial position of Rexel Stores?

A6: The current financial position of Rexel Stores is stable, with a strong balance sheet and a positive net income.

Q7: What are the potential risks for Rexel Stores?

A7: The potential risks for Rexel Stores include the need for careful management of liabilities and expenses, as well as the potential for changes in market conditions.

Q8: How can Rexel Stores improve its financial performance?

A8: Rexel Stores can improve its financial performance by increasing sales revenue, reducing expenses, and managing liabilities effectively.

Q9: What is the role of Alex and Rex in the financial management of Rexel Stores?

A9: Alex and Rex are the partners of Rexel Stores and are responsible for the financial management of the company, including making decisions about investments, expenses, and liabilities.

Q10: What is the importance of financial reporting for Rexel Stores?

A10: Financial reporting is essential for Rexel Stores as it provides a clear picture of the company's financial position, performance, and cash flows, which is necessary for making informed decisions about the business.

Conclusion

In this Q&A article, we have answered some frequently asked questions related to the financial data of Rexel Stores. The financial data indicates a stable financial position with a strong balance sheet and a positive net income. However, careful management of liabilities and expenses is necessary to ensure continued financial success.

Additional Resources

For more information on financial reporting and analysis, please refer to the following resources:

Financial Accounting Standards Board (FASB)
Generally Accepted Accounting Principles (GAAP)
International Financial Reporting Standards (IFRS)
Financial Management Association (FMA)
American Accounting Association (AAA)

Disclaimer

The information provided in this article is for educational purposes only and should not be considered as investment advice. It is essential to consult with a financial advisor or accountant before making any investment decisions.