Mr. Kamau started his business on 1 January 2016 with £35,000 in a bank account. Unfortunately he did not keep proper books of account. He is forced to submit a calculation of profit for the year ended 31 December 2019 to the Income Tax Department. He ascertains that at 31 December 2016 he had stock valued at cost £6,200, a van which had cost £6,400 during the year and which had depreciated during the year by £1,600, debtors of £15,200, expenses prepaid of £310, a bank balance of £33,490, a cash balance £270, trade creditors £7,100, and expenses owing £640. His drawings were: cash £400 per week for 50 weeks, cheque payments £870. Required: Prepare a statements to show the profit or loss for the year ended December 31, 2019.

Mr. Kamau started his business on 1 January 2016 with £35,000 in a bank account. Unfortunately he did not keep proper books of account. He is forced to submit a calculation of profit for the year ended 31 December 2019 to the Income Tax Department. He ascertains that at 31 December 2016 he had stock valued at cost £6,200, a van which had cost £6,400 during the year and which had depreciated during the year by £1,600, debtors of £15,200, expenses prepaid of £310, a bank balance of £33,490, a cash balance £270, trade creditors £7,100, and expenses owing £640. His drawings were: cash £400 per week for 50 weeks, cheque payments £870. Required: Prepare a statements to show the profit or loss for the year ended December 31, 2019.

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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