Anne York is a sole trader who started the business of buying and selling furniture in Brighton on the 1st of October 2021. She is going to prepare accounts to 31st of September 2021. She contributed to the business with £10,000 in the Bank, £4,800 cash, 45,000 flat and 12,000 Car. The transactions during the month are as follows: 2/10 Purchased furniture £5400 for sale on credit from Home Ltd 4/10 She bought a computer for £800 and a printer £200 from a local shop in London and paid by cheque. 5/10 Sold goods for £ 2800 and received the money via Bank account 12/10 Paid in Cash £110 for repairing printer 18/10 Part of furniture returned to Home Ltd £250 21/10 The owner received rent £800 for flat and deposited it to the bank account 23/10 Sold goods to Rayan £2100; from this amount £1800 cash received immediately and the rest remains on credit. 23/10 Sold goods of £700 to David and received cash 24/10 Bought a new Laptop for business use by issuing a cheque £1700 26/10 Paid the month’s wages to the part-time shopkeeper by cheque £820 30/10 The owner rented an office place in a Business Park near the London on 1st October and paid rent by cheque £850 31/10 The owner has also paid £ 1200 from the business bank account to book a hotel and flight in Scotland for her holiday. 31/10 £150 Cash received from Rayan. Required: d) Prepare an Income Statement for the period ended 31st October 2021 The closing inventory is £ 320 e) Prepare a Statement of Financial Position as at 31st October 2021 f) Write a brief letter to Anne explaining what drawings are concerning small business and answering her query concerning her holiday. For Statement of Financial position please see the format in the image attached. For point f) write a brief letter to Anne. It has to be like a formal letter sent to Anne explaining to her why her drawings are concerning and might put her business at risk.
Anne York is a sole trader who started the business of buying and selling furniture in Brighton
on the 1st of October 2021.
She is going to prepare accounts to 31st of September 2021. She contributed to the business
with £10,000 in the Bank, £4,800 cash, 45,000 flat and 12,000 Car. The transactions during
the month are as follows:
2/10 Purchased furniture £5400 for sale on credit from Home Ltd
4/10 She bought a computer for £800 and a printer £200 from a local shop in London and
paid by cheque.
5/10 Sold goods for £ 2800 and received the money via Bank account
12/10 Paid in Cash £110 for repairing printer
18/10 Part of furniture returned to Home Ltd £250
21/10 The owner received rent £800 for flat and deposited it to the bank account
23/10 Sold goods to Rayan £2100; from this amount £1800 cash received immediately and
the rest remains on credit.
23/10 Sold goods of £700 to David and received cash
24/10 Bought a new Laptop for business use by issuing a cheque £1700
26/10 Paid the month’s wages to the part-time shopkeeper by cheque £820
30/10 The owner rented an office place in a Business Park near the London on 1st October
and paid rent by cheque £850
31/10 The owner has also paid £ 1200 from the business bank account to book a hotel and
flight in Scotland for her holiday.
31/10 £150 Cash received from Rayan.
Required:
d) Prepare an Income Statement for the period ended 31st October 2021
The closing inventory is £ 320
e) Prepare a
f) Write a brief letter to Anne explaining what drawings are concerning small business
and answering her query concerning her holiday.
For Statement of Financial position please see the format in the image attached.
For point f) write a brief letter to Anne. It has to be like a formal letter sent to Anne explaining to her why her drawings are concerning and might put her business at risk.
![Statement of financial position as at 31 December 2012
(showing the position of non-current liabilities)
£
Non-current assets
Fixtures and fittings
5,000
Current assets
Inventory
Account receivable
3,000
6,800
Bank
15,100
200
Cash
25,100
30,100
Total assets
Current liabilities
Accounts payable
9,100
Non-current liabilities
Total liabilities
(9,100)
21,000
Net assets
Capital
Cash introduced
20,000
8,000
28,000
(7,000),
21,000
Add Net profit for the year
Less Drawings
Total capital](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F61093625-2d5a-4081-8d48-757047994e72%2F0d0afcc2-d59d-4723-b8a7-8133c3ce8adf%2Fc4da0v3_processed.png&w=3840&q=75)
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