How can we correct the attached Income statement & Balance sheet to ensure that the expense of £1200 is captured as Drawings and not as Travel expense as this amount was used by Anne for hotel and flight booking for her holiday and is not a business expense? Anne York is a sole trader who started the business of buying and selling furniture in Brighton on theQuestion:Income Statement and Balance Sheet prepared for Anne York for period ended 31 Oct 2021 are as below. The hotel and flightexpenses she has incurred for a holiday has been captured as travel expense. How dow we edit the income statement andbalance sheet to account for the the amount of £1200 which should be Drawings and not Travel expense?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 areas follows:Income StatementBalance SheetAssetsCurrent Assets2/10 Purchased furniture £5400 for sale on credit from Home LtdParticularsAmountSales RevenueLess: Cost of Goods Sold4/10 She bought a computer for £800 and a printer £200 from a local shop in London and paid by£5,600cheque.£5,150Bank£9,230Less: Ending InventoryGross ProfitCashAccount Receivable5/10 Sold goods for £ 2800 and received the money via Bank account£320£6,140£770£15012/10 Paid in Cash £110 for repairing printerOperating ExpensesRepair ExpesnesWages ExpensesRent ExpensesTravel ExpensesTotal Operating ExpensesOperating Income/LossInventoryTotal Current Assets£32018/10 Part of furniture returned to Home Ltd £250£110£15,840£820Property & Equipment£850Flat£45,000Car£12,000£1,200£2,980Computer£800-£2,210Printer£200Other IncomeLaptop£1,700£59,70021/10 The owner received rent £800 for flat and deposited it to the bank accountTotal AssetsLiabilities & Owner's EquityCurrent LiabilitiesAccount PayableOwner's EquityRent Revenue£800£75,54023/10 Sold goods to Rayan £2100; from this amount £1800 cash received immediately and the restNet Loss-£1,410remains on credit.23/10 Sold goods of £700 to David and received cash£5,15024/10 Bought a new Laptop for business use by issuing a cheque £170026/10 Paid the month's wages to the part-time shopkeeper by cheque £820Capital£70,39030/10 The owner rented an office place in a Business Park near the London on 1 October and paidTotal Liabilities & Owner's Equity£75,540rent by cheque £85031/10 The owner has also paid £ 1200 from the business bank account to book a hotel and flight inScotland for her holiday.31/10 £150 Cash received from Rayan.

1. Income Statement 2. Balance Sheet The first statement shows the income earned and loss incurred…

Answered: How can we correct the attached Income…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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How can we correct the attached Income statement & Balance sheet to ensure that the expense of £1200 is captured as Drawings and not as Travel expense as this amount was used by Anne for hotel and flight booking for her holiday and is not a business expense?

Anne York is a sole trader who started the business of buying and selling furniture in Brighton on the
Question:
Income Statement and Balance Sheet prepared for Anne York for period ended 31 Oct 2021 are as below. The hotel and flight
expenses she has incurred for a holiday has been captured as travel expense. How dow we edit the income statement and
balance sheet to account for the the amount of £1200 which should be Drawings and not Travel expense?
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:
Income Statement
Balance Sheet
Assets
Current Assets
2/10 Purchased furniture £5400 for sale on credit from Home Ltd
Particulars
Amount
Sales Revenue
Less: Cost of Goods Sold
4/10 She bought a computer for £800 and a printer £200 from a local shop in London and paid by
£5,600
cheque.
£5,150
Bank
£9,230
Less: Ending Inventory
Gross Profit
Cash
Account Receivable
5/10 Sold goods for £ 2800 and received the money via Bank account
£320
£6,140
£770
£150
12/10 Paid in Cash £110 for repairing printer
Operating Expenses
Repair Expesnes
Wages Expenses
Rent Expenses
Travel Expenses
Total Operating Expenses
Operating Income/Loss
Inventory
Total Current Assets
£320
18/10 Part of furniture returned to Home Ltd £250
£110
£15,840
£820
Property & Equipment
£850
Flat
£45,000
Car
£12,000
£1,200
£2,980
Computer
£800
-£2,210
Printer
£200
Other Income
Laptop
£1,700
£59,700
21/10 The owner received rent £800 for flat and deposited it to the bank account
Total Assets
Liabilities & Owner's Equity
Current Liabilities
Account Payable
Owner's Equity
Rent Revenue
£800
£75,540
23/10 Sold goods to Rayan £2100; from this amount £1800 cash received immediately and the rest
Net Loss
-£1,410
remains on credit.
23/10 Sold goods of £700 to David and received cash
£5,150
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
Capital
£70,390
30/10 The owner rented an office place in a Business Park near the London on 1 October and paid
Total Liabilities & Owner's Equity
£75,540
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.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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