28.12A The following trial balance has been extracted from the ledger of Mr Yousef, a sole tra Trial Balance as at 31 May 2012 Sales Purchases Carriage Drawings Rent, rates and insurance Postage and stationery Advertising Salaries and wages Bad debts Allowance for doubtful debts Accounts receivable Accounts payable Cash in hand Cash at bank Inventory as at 1 June 2011 Equipment at cost accumulated depreciation Capital The following additional information as at 31 May 2012 is available: (a) Rent is accrued by £210. (b) Rates have been prepaid by £880. Dr £ 82,350 5,144 7,800 6,622 3,001 1,330 26,420 877 12,120 177 1,002 11,927 58,000 216,770 (c) £2,211 of carriage represents carriage inwards on purchases. (d) Equipment is to be depreciated at 15% per annum using the straight line method. (e) The allowance for doubtful debts to be increased by £40. (f) Inventory at the close of business has been valued at £13,551. Cr £ 138,078 130 6,471 19,000 53,091 216,770 Required: Prepare an income statement for the year ending 31 May 2012 and a statement of financial posi- tion as at that date.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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(ii) Accrued wages £5,000.
(iii) Rates prepaid £500.
(iv) The allowance for doubtful debts to be increased to 10 per cent of accounts receivable.
(v) Telephone account outstanding £220.
(vi) Depreciate shop fittings at 10 per cent per annum, and van at 20 per cent per annum, on cost.
28.12A The following trial balance has been extracted from the ledger of Mr Yousef, a sole trader.
d
Trial Balance as at 31 May 2012
Sales
Purchases
Carriage
Drawings
Rent, rates and insurance
Postage and stationery
Advertising
Salaries and wages
Bad debts
Allowance for doubtful debts.
Accounts receivable
Accounts payable
Cash in hand
Cash bank
Inventory as at 1 June 2011
Equipment
at cost
accumulated depreciation
Capital
The following additional information as at 31 May 2012 is available:
(a)
(b)
(c)
(d)
(e)
Rent is accrued by £210.
Rates have been prepaid by £880.
Dr
£
82,350
5,144
7,800
6,622
3,001
1,330
26,420
877
12,120
177
1,002
11,927
58,000
216,770
£2,211 of carriage represents carriage inwards on purchases.
Equipment is to be depreciated at 15% per annum using the straight line method.
The allowance for doubtful debts to be increased by £40.
(f) Inventory at the close of business has been valued at £13,551.
Cr
£
138,078
130
6,471
19,000
53,091
216,770
Required:
Prepare an income statement for the year ending 31 May 2012 and a statement of financial posi-
tion as at that date.
(Association of Accounting Technicians)
355
Transcribed Image Text:(ii) Accrued wages £5,000. (iii) Rates prepaid £500. (iv) The allowance for doubtful debts to be increased to 10 per cent of accounts receivable. (v) Telephone account outstanding £220. (vi) Depreciate shop fittings at 10 per cent per annum, and van at 20 per cent per annum, on cost. 28.12A The following trial balance has been extracted from the ledger of Mr Yousef, a sole trader. d Trial Balance as at 31 May 2012 Sales Purchases Carriage Drawings Rent, rates and insurance Postage and stationery Advertising Salaries and wages Bad debts Allowance for doubtful debts. Accounts receivable Accounts payable Cash in hand Cash bank Inventory as at 1 June 2011 Equipment at cost accumulated depreciation Capital The following additional information as at 31 May 2012 is available: (a) (b) (c) (d) (e) Rent is accrued by £210. Rates have been prepaid by £880. Dr £ 82,350 5,144 7,800 6,622 3,001 1,330 26,420 877 12,120 177 1,002 11,927 58,000 216,770 £2,211 of carriage represents carriage inwards on purchases. Equipment is to be depreciated at 15% per annum using the straight line method. The allowance for doubtful debts to be increased by £40. (f) Inventory at the close of business has been valued at £13,551. Cr £ 138,078 130 6,471 19,000 53,091 216,770 Required: Prepare an income statement for the year ending 31 May 2012 and a statement of financial posi- tion as at that date. (Association of Accounting Technicians) 355
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Financial statements are prepared by the entity for the purpose of depicting the profitability and financial health of a business. It includes income statement, balance sheet etc.

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