Write an income statement (profit and loss statement) using this data: Layla introduced £50,000 of capital, which was paid into a bank account opened in the name of the business. Premises were rented from 1 January 2021 at an annual rental of £20,000. During the year, rent of £25,000 was paid to the owner of the premises. Rates (a tax on business premises) were paid during the year as follows; For the period 1 January 2021 to 31 March 2021 £ 500 For the period 1 April 2021 to 31 March 2022 £1,200 A delivery van was bought on 1January 2021 for £12,000. This is expected to be used in the business for four years and then to be sold for £2,000. Wages totalling £33,500 were paid during the year. At the end of the year, the business owed £630 of wages for the last week of the year. Electricity bills for the first three quarters of the year were paid totalling £1,650. After 31 December 2021, but before the financial statements had been finalised for the year, the bill for the last quarter arrived showing a charge of £620. Inventories totalling £143,000 were bought for credit. Inventories totalling £12,000 were bought for cash. Sales revenue on credit totalled £152,000 (cost of sales £74,000). Cash sales revenue totalled £35,000 (cost of sales £16,000). Receipts from trade receivables totalled £143,000. Payments to trade payables totalled £121,000. Van running expenses paid totalled £9,400. She took out government interest free loan of £33,500 in 1 December 2021.

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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Write an income statement (profit and loss statement) using this data:

Layla introduced £50,000 of capital, which was paid into a bank account opened in the name of the business.
Premises were rented from 1 January 2021 at an annual rental of £20,000. During the year, rent of £25,000 was paid to the owner of the premises.
Rates (a tax on business premises) were paid during the year as follows;

For the period 1 January 2021 to 31 March 2021 £ 500
For the period 1 April 2021 to 31 March 2022 £1,200

A delivery van was bought on 1January 2021 for £12,000. This is expected to be used in the business for four years and then to be sold for £2,000.
Wages totalling £33,500 were paid during the year. At the end of the year, the business owed £630 of wages for the last week of the year.
Electricity bills for the first three quarters of the year were paid totalling £1,650. After 31 December 2021, but before the financial statements had been finalised for the year, the bill for the last quarter arrived showing a charge of £620.
Inventories totalling £143,000 were bought for credit.
Inventories totalling £12,000 were bought for cash.
Sales revenue on credit totalled £152,000 (cost of sales £74,000).
Cash sales revenue totalled £35,000 (cost of sales £16,000).
Receipts from trade receivables totalled £143,000.
Payments to trade payables totalled £121,000.
Van running expenses paid totalled £9,400.
She took out government interest free loan of £33,500 in 1 December 2021.

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