urer. The remainder
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
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-Warehouse fixtures 182
Cash at bank 1 826
Water rates 850
Drawings 18 214
Sales representative’s salary 26 241
Administration expenses 3 122
Purchases of water coolers 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.
Prepare an
Step by step
Solved in 2 steps with 2 images
