Question 1 The following is a list of items related to Assembly Parts Ltd at 31 December 2015 and 2016: Trade payables Accumulated depreciation Long-term borrowing Sales revenue Property, plant and equipment (gross) Salaries payable Short-term borrowings Inventories ADM Revision exercises Bonds payable Land Retained earnings Trade receivables Salaries expense Cash Marketable securities 2015 £000 96 49 230 1815 247 26 126 191 105 280 129 165 312 15 92 2016 £000 122 55 192 1986 275 26 142 182 83 280 133 148 312 17 69 Required: (a) Prepare the balance sheet of the business as at 31 December 2015 and 2016 from the above information using the vertical layout. There is a missing item that needs to be deduced and inserted. Not all items shown above should appear on the balance sheets. (b) Discuss the significant features revealed by the balance sheets for 2015 and 2016.

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business…