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Below is the trail balance of Star Ltd as at 31st December 2022. Trial Balance Account Name Debit $ Credit S Sales 640,000 Sales Return 17,000 Opening inventory 96,000 Purchases 252,000 Purchases return 32,000 Non-Current assets at cost: Freehold property 150,000 Equipment 48,000 Motor Vehicles 28,000 Accumulated depreciation on: Equipment 12,000 Motor vehicles 10,000 Salaries and wages 14,000 Insurance 6,000 Advertising expenses 9,000 Motor expenses 3,000 Loan interest 8,000 Receivables 72,000 Allowances for receivables. 4,000 Payables 56,000 Cash at bank 311,000 Bank loan 100,000 Capital 160,000 1,014,000 1,014,000 Additional information is provided for use in preparing the company's adjustments: 1. Closing inventory is valued at $65,000. 2. Equipment is depreciated by 25% on straight line basis. 3. Motor vehicles are depreciated by 30% on reducing balance basis. 4. Accrued wages at the end of 2022 amount to $2,600. 5. On 1st April 2022 Adam paid $3,000 for insurance which was valid until 31st March 2023. 6. Irrecoverable receivables of $1,600 need to be write off. 7. Adam decides to increase allowances for receivables to $5,000. 8. Adam has taken goods worth $15,000 for his own use. Required: 1. Prepare income statement for the year ended December 31st, 2022.

Below is the trail balance of Star Ltd as at 31st December 2022. Trial Balance Account Name Debit $ Credit S Sales 640,000 Sales Return 17,000 Opening inventory 96,000 Purchases 252,000 Purchases return 32,000 Non-Current assets at cost: Freehold property 150,000 Equipment 48,000 Motor Vehicles 28,000 Accumulated depreciation on: Equipment 12,000 Motor vehicles 10,000 Salaries and wages 14,000 Insurance 6,000 Advertising expenses 9,000 Motor expenses 3,000 Loan interest 8,000 Receivables 72,000 Allowances for receivables. 4,000 Payables 56,000 Cash at bank 311,000 Bank loan 100,000 Capital 160,000 1,014,000 1,014,000 Additional information is provided for use in preparing the company's adjustments: 1. Closing inventory is valued at $65,000. 2. Equipment is depreciated by 25% on straight line basis. 3. Motor vehicles are depreciated by 30% on reducing balance basis. 4. Accrued wages at the end of 2022 amount to $2,600. 5. On 1st April 2022 Adam paid $3,000 for insurance which was valid until 31st March 2023. 6. Irrecoverable receivables of $1,600 need to be write off. 7. Adam decides to increase allowances for receivables to $5,000. 8. Adam has taken goods worth $15,000 for his own use. Required: 1. Prepare income statement for the year ended December 31st, 2022.

Financial Accounting: The Impact on Decision Makers
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter8: Operating Assets: Property, Plant, And Equipment, And Intangibles
Section: Chapter Questions
Problem 8.6E
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Below is the trail balance of Star Ltd as at 31st December 2022. Trial Balance Account Name Debit $ Credit S Sales 640,000 Sales Return 17,000 Opening inventory 96,000 Purchases 252,000 Purchases return 32,000 Non-Current assets at cost: Freehold property 150,000 Equipment 48,000 Motor Vehicles 28,000 Accumulated depreciation on: Equipment 12,000 Motor vehicles 10,000 Salaries and wages 14,000 Insurance 6,000 Advertising expenses 9,000 Motor expenses 3,000 Loan interest 8,000 Receivables 72,000 Allowances for receivables. 4,000 Payables 56,000 Cash at bank 311,000 Bank loan 100,000 Capital 160,000 1,014,000 1,014,000 Additional information is provided for use in preparing the company's adjustments: 1. Closing inventory is valued at $65,000. 2. Equipment is depreciated by 25% on straight line basis. 3. Motor vehicles are depreciated by 30% on reducing balance basis. 4. Accrued wages at the end of 2022 amount to $2,600. 5. On 1st April 2022 Adam paid $3,000 for insurance which was valid until 31st March 2023. 6. Irrecoverable receivables of $1,600 need to be write off. 7. Adam decides to increase allowances for receivables to $5,000. 8. Adam has taken goods worth $15,000 for his own use. Required: 1. Prepare income statement for the year ended December 31st, 2022.
Transcribed Image Text:Below is the trail balance of Star Ltd as at 31st December 2022. Trial Balance Account Name Debit $ Credit S Sales 640,000 Sales Return 17,000 Opening inventory 96,000 Purchases 252,000 Purchases return 32,000 Non-Current assets at cost: Freehold property 150,000 Equipment 48,000 Motor Vehicles 28,000 Accumulated depreciation on: Equipment 12,000 Motor vehicles 10,000 Salaries and wages 14,000 Insurance 6,000 Advertising expenses 9,000 Motor expenses 3,000 Loan interest 8,000 Receivables 72,000 Allowances for receivables. 4,000 Payables 56,000 Cash at bank 311,000 Bank loan 100,000 Capital 160,000 1,014,000 1,014,000 Additional information is provided for use in preparing the company's adjustments: 1. Closing inventory is valued at $65,000. 2. Equipment is depreciated by 25% on straight line basis. 3. Motor vehicles are depreciated by 30% on reducing balance basis. 4. Accrued wages at the end of 2022 amount to $2,600. 5. On 1st April 2022 Adam paid $3,000 for insurance which was valid until 31st March 2023. 6. Irrecoverable receivables of $1,600 need to be write off. 7. Adam decides to increase allowances for receivables to $5,000. 8. Adam has taken goods worth $15,000 for his own use. Required: 1. Prepare income statement for the year ended December 31st, 2022.
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