From the following trial balance and attached notes, prepare an income statement for the year ended 30
Question:
From the following trial balance and attached notes, prepare an income statement for the year ended 30 September 2014 and a statement of financial position as at that date.
Felicity Frankton Trial balance as at 30 September 2014 Dr Cr
£ £
Bad debts written off 500 Bank balance 2,350 Equity, 1 October 2013 15,940 Computers, at cost 3,610 Depreciation on computers, 1 October 2013 1,850 Depreciation on motor cars, 1 October 2013 7,600 Drawings 16,900 Light and heat 2,200 Motor cars, at cost 16,500 Opening inventory, 1 October 2013 16,520 Proceeds of sale of motor car 1,500 Provision for doubtful debts, 1 October 2013 800 Purchases 32,410 Rent and rates 3,200 Revenue 105,800 Sundry office expenses 10,200 Trade payables 13,600 Trade receivables 24,200 Wages and salaries 18,500 147,090 147,090 Notes:
1 Closing inventory was valued at £14,560.
2 A car costing £7,900 on 1 October 2010 was sold during the year for £1,500. Depreciation to the date of sale was £6,000. No entries had been made relating to this sale, other than crediting the proceeds to a separate general ledger account, as shown in the trial balance.
3 £600 was owed for rent and rates at the end of the year, and £200 had been prepaid at the end of the year relating to sundry office expenses.
4 The provision for doubtful debts was to be adjusted to equal 5, of the closing trade receivables total.
5 Depreciation is charged as follows:
Computer equipment: over five years on the straight line basis, assuming no residual values Motor cars: 60, p.a. on the diminishing balance basis, with no depreciation being charged in the year of sale.
Step by Step Answer:
Accounting And Finance For Business
ISBN: 9780273773948
1st Edition
Authors: Geoff Black, Mahmoud Al-Kilani