Prepare Income statement for the year ended 31 December2020. Prepare the statement of financial position as at 31 December 2020 Inventory at 31 December 2020 was £4,400. Aderonke took out some goods costing £500 for personal use. No payment was made for these goods Rent prepaid at 31 December 2020 was £1,300 Motor running expenses owing at 31 December 2020 was £90 Delivery Van 25% on the reducing balance basis Shop fittings 20% on the straight-line basis Trial Balance Capital 30,000 Purchases 100,000 Sales Revenue 164,000 Trade payable 5,000 Trade receivable 13,000 Discount received 500 Discount allowed 920 Carriage outwards 1,500 Drawings 14,000 Rent & Rates 9,300 Heating and Lighting 4,500 Salaries and wages 37,000 Cash in hand 1,350 Bank Over draft 1,200 Inventory 1/1/2020 6,000 Delivery van 9,000 Motor running cost 630 Shop fittings at cost 8,500 Accumulated depreciation, Delivery Van ,1/1/2020 3,500 Accumulated depreciation, shop fittings ,1/1/2020 1,500 205,700 205,700
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Prepare Income statement for the year ended 31 December2020.
Prepare the statement of financial position as at 31 December 2020
- Inventory at 31 December 2020 was £4,400.
- Aderonke took out some goods costing £500 for personal use. No payment was made for these goods
- Rent prepaid at 31 December 2020 was £1,300
- Motor running expenses owing at 31 December 2020 was £90
- Delivery Van 25% on the reducing balance basis
- Shop fittings 20% on the straight-line basis
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Capital |
30,000 |
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Purchases |
100,000 |
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Sales Revenue |
164,000 |
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Trade payable |
5,000 |
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Trade receivable |
13,000 |
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Discount received |
500 |
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Discount allowed |
920 |
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Carriage outwards |
1,500 |
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Drawings |
14,000 |
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Rent & Rates |
9,300 |
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Heating and Lighting |
4,500 |
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Salaries and wages |
37,000 |
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Cash in hand |
1,350 |
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Bank Over draft |
1,200 |
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Inventory 1/1/2020 |
6,000 |
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Delivery van |
9,000 |
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Motor running cost |
630 |
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Shop fittings at cost |
8,500 |
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3,500 |
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Accumulated depreciation, shop fittings ,1/1/2020 |
1,500 |
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205,700 |
205,700 |
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