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Roger's business trades in water coolers for offices. At the end of his trading year to 31 December 2021 he has 212 coolers in inventory. 96 of them are the deluxe model which costs Roger £156 to purchase from the manufacturer. The remainder cost £128 each. The business is run from rented warehouse premises. Roger supplies you with the following trial balance: Trade payables 30 729 Sundry expenses 2 678 Warehouse rental 12 629 Sales representative's car 15 900 Long-term loan 5 000 Capital at 1 January 2021 26 679 Business rates 1 920 Revenue 313 475 Accumulated depreciation- Sales Car 4,770 Accumulated depreciation-Warehouse fixtures 182 Cash at bank 1 826 Water rates 850 Drawings 18 214 26 241 Sales representative's salary Administration expenses 3 122 Purchases of water coolers 233 668 Trade receivables 32 635 Telephone Travelling expenses 2 961 1 820 Loan interest 250 Insurance 1729 Inventory at 1 January 2021 Warehouse fixtures 25 620 1 820 a. Depreciation is calculated at 30% on the reducing balance basis for the Sales representative car. b. Depreciation is calculated on the straight-line basis at 10% of cost for the Warehouse fixture c. Accruals are also required for telephone charges -£686 d. Included in the administrative expense is £150 for professional fees and subscriptions total is to be treated as a prepayment. Also, £750 of the insurance relates to the next following accounting period. Required: Prepare an income statement and statement of financial position for Roger for the year ended 31 December 2021

Roger's business trades in water coolers for offices. At the end of his trading year to 31 December 2021 he has 212 coolers in inventory. 96 of them are the deluxe model which costs Roger £156 to purchase from the manufacturer. The remainder cost £128 each. The business is run from rented warehouse premises. Roger supplies you with the following trial balance: Trade payables 30 729 Sundry expenses 2 678 Warehouse rental 12 629 Sales representative's car 15 900 Long-term loan 5 000 Capital at 1 January 2021 26 679 Business rates 1 920 Revenue 313 475 Accumulated depreciation- Sales Car 4,770 Accumulated depreciation-Warehouse fixtures 182 Cash at bank 1 826 Water rates 850 Drawings 18 214 26 241 Sales representative's salary Administration expenses 3 122 Purchases of water coolers 233 668 Trade receivables 32 635 Telephone Travelling expenses 2 961 1 820 Loan interest 250 Insurance 1729 Inventory at 1 January 2021 Warehouse fixtures 25 620 1 820 a. Depreciation is calculated at 30% on the reducing balance basis for the Sales representative car. b. Depreciation is calculated on the straight-line basis at 10% of cost for the Warehouse fixture c. Accruals are also required for telephone charges -£686 d. Included in the administrative expense is £150 for professional fees and subscriptions total is to be treated as a prepayment. Also, £750 of the insurance relates to the next following accounting period. Required: Prepare an income statement and statement of financial position for Roger for the year ended 31 December 2021

FINANCIAL ACCOUNTING
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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Roger's business trades in water coolers for offices. At the end of his trading year to 31 December 2021 he has 212 coolers in inventory. 96 of them are the deluxe model which costs Roger £156 to purchase from the manufacturer. The remainder cost £128 each. The business is run from rented warehouse premises. Roger supplies you with the following trial balance: Trade payables Sundry expenses Warehouse rental Sales representative's car 30 729 2 678 12 629 15 900 Long-term loan Capital at 1 January 2021 5 000 26 679 Business rates 1 920 Revenue 313 475 Accumulated depreciation- Sales Car 4,770 Accumulated depreciation-Warehouse fixtures 182 Cash at bank 1 826 Water rates 850 Drawings 18 214 Sales representative's salary Administration expenses Purchases of water coolers 26 241 3 122 233 668 Trade receivables 32 635 Telephone 2 961 Travelling expenses 1 820 Loan interest 250 Insurance 1729 Inventory at 1 January 2021 25 620 Warehouse fixtures 1 820 a. Depreciation is calculated at 30% on the reducing balance basis for the Sales representative car. b. Depreciation is calculated on the straight-line basis at 10% of cost for the Warehouse fixture c. Accruals are also required for telephone charges -£686 d. Included in the administrative expense is £150 for professional fees and subscriptions total is to be treated as a prepayment. Also, £750 of the insurance relates to the next following accounting period. Required: Prepare an income statement and statement of financial position for Roger for the year ended 31 December 2021
Transcribed Image Text:Roger's business trades in water coolers for offices. At the end of his trading year to 31 December 2021 he has 212 coolers in inventory. 96 of them are the deluxe model which costs Roger £156 to purchase from the manufacturer. The remainder cost £128 each. The business is run from rented warehouse premises. Roger supplies you with the following trial balance: Trade payables Sundry expenses Warehouse rental Sales representative's car 30 729 2 678 12 629 15 900 Long-term loan Capital at 1 January 2021 5 000 26 679 Business rates 1 920 Revenue 313 475 Accumulated depreciation- Sales Car 4,770 Accumulated depreciation-Warehouse fixtures 182 Cash at bank 1 826 Water rates 850 Drawings 18 214 Sales representative's salary Administration expenses Purchases of water coolers 26 241 3 122 233 668 Trade receivables 32 635 Telephone 2 961 Travelling expenses 1 820 Loan interest 250 Insurance 1729 Inventory at 1 January 2021 25 620 Warehouse fixtures 1 820 a. Depreciation is calculated at 30% on the reducing balance basis for the Sales representative car. b. Depreciation is calculated on the straight-line basis at 10% of cost for the Warehouse fixture c. Accruals are also required for telephone charges -£686 d. Included in the administrative expense is £150 for professional fees and subscriptions total is to be treated as a prepayment. Also, £750 of the insurance relates to the next following accounting period. Required: Prepare an income statement and statement of financial position for Roger for the year ended 31 December 2021
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