EX 2 - Financial statements for Naomi's Frames Naomi's Frames Trial balance as at 5 April 20X5 £ Trading account: Sales 295,000 Opening inventory 19,200 199,000 1,850 Purchases Carriage inwards Other revenue and expenses: Subscrip tion income Rent 1,200 15,500 4,000 Heating and lighting Advertising expense 2,500 4,450 1,600 Motor expenses Discounts allowed Carria ge outwards 1,100 Balance sheet accounts: Equipme nt Equipment - accumulated deprec iation 12,000 3,600 Motor vehicle 50,000 Motor vehic le - accumulated depreciation 12,250 Receivables 25,500 Allowance for receivab les 1,000 Bank 9,700 VAT liability Payables 17,350 16,800 10,000 17,500 Bank loan Capital Drawings 28,300 374.700 374,700 The following information is relevant. The closing inventory at 5 April 20X5 is valued at £18,200. 2 The subscription income of £1,200 received relates to the period from 6 August 20X4 to 5 August 20X5. 3 Depreciation on the equipment is provided at 10% per annum on the straight line basis. 4 Depreciation on the mot 1 vehicle is provided at 25% per annum on the reducing balance method. Naomi estimates that £1,100 due from customers will be irrecoverable and must be written off. 6 The allowance for receivables is to be set at 5% of net receivables at 5 April 20X5. Rent includes a prepayment of £3,000. 8 Advertising expense includes a prepayment of £500. The heating bill will arrive on 10 April and about £200 is expected to relate to the period 7 6 until 5 April. 10 The bank loan is repayable in 8 years' time. Interest payable on the loan is 9% and will be paid once per year. Required: 1. Prepare the income statement for Naomi's Frames for the period ended 5 April 20X5. 2. Prepare the balance sheet for Naomi's Frames as at 5 April 20X5 3. Present all your workings
EX 2 - Financial statements for Naomi's Frames Naomi's Frames Trial balance as at 5 April 20X5 £ Trading account: Sales 295,000 Opening inventory 19,200 199,000 1,850 Purchases Carriage inwards Other revenue and expenses: Subscrip tion income Rent 1,200 15,500 4,000 Heating and lighting Advertising expense 2,500 4,450 1,600 Motor expenses Discounts allowed Carria ge outwards 1,100 Balance sheet accounts: Equipme nt Equipment - accumulated deprec iation 12,000 3,600 Motor vehicle 50,000 Motor vehic le - accumulated depreciation 12,250 Receivables 25,500 Allowance for receivab les 1,000 Bank 9,700 VAT liability Payables 17,350 16,800 10,000 17,500 Bank loan Capital Drawings 28,300 374.700 374,700 The following information is relevant. The closing inventory at 5 April 20X5 is valued at £18,200. 2 The subscription income of £1,200 received relates to the period from 6 August 20X4 to 5 August 20X5. 3 Depreciation on the equipment is provided at 10% per annum on the straight line basis. 4 Depreciation on the mot 1 vehicle is provided at 25% per annum on the reducing balance method. Naomi estimates that £1,100 due from customers will be irrecoverable and must be written off. 6 The allowance for receivables is to be set at 5% of net receivables at 5 April 20X5. Rent includes a prepayment of £3,000. 8 Advertising expense includes a prepayment of £500. The heating bill will arrive on 10 April and about £200 is expected to relate to the period 7 6 until 5 April. 10 The bank loan is repayable in 8 years' time. Interest payable on the loan is 9% and will be paid once per year. Required: 1. Prepare the income statement for Naomi's Frames for the period ended 5 April 20X5. 2. Prepare the balance sheet for Naomi's Frames as at 5 April 20X5 3. Present all your workings
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:EX 2 - Financial statements for Naomi's Frames
Naomi's Frames Trial balance as at 5 April 20X5
Trading account:
Sales
295,000
Opening inventory
19,200
Purchases
199,000
Carria ge inwards
Other revenue and expenses:
1,850
Subscrip tion income
1,200
Rent
15,500
4,000
Heating and lighting
Advertising expense
Motor expenses
2,500
4,450
Discounts allowed
1,600
Carriage outwards
1,100
Balance sheet accounts:
Equipme nt
Equipment - accumulated deprec iation
12,000
3,600
Motor vehicle
50,000
Motor vehic le
- accumulated depreciation
12,250
Receivables
25,500
Allowance for receivab les
1,000
Bank
9,700
VAT liability
Payables
17,350
16,800
10,000
Bank loan
Capital
Drawings
17,500
28,300
374,700
374,700
The following information is relevant.
The closing inventory at 5 April 20X5 is valued at £18,200.
The subscription income of £1,200 received relates to the period from 6 August 20X4 to 5
August 20X5.
3 Depreciation on the equipment is provided at 10% per annum on the straight line basis.
4 Depreciation on the motor vehicle is provided at 25% per annum on the reducing balance method.
1
2
Naomi estimates that £1,100 due from customers will be irrecoverable and must be written off.
The allowance for receivables is to be set at 5% of net receivables at 5 April 20X5.
Rent includes a prepayment of £3,000.
8 Advertis ing expense includes a prepayment of £500.
The heating bill will arrive on 10 April and about £200 is expected to relate to the period
7
9
6
until 5 April.
10 The bank loan is repayable in 8 years' time. Interest payable on the loan is 9% and will be
paid once per year.
Required:
1. Prepare the income statement for Naomi's Frames for the period ended 5 April 20X5.
2. Prepare the balance sheet foòr Naomi's Frames as at 5 April 20X5
3. Present all your workings
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