Ming has been running a market stall in Beijing for some years. The stall sells hats and fans to holidaymakers. Ming works on the stall for three days a week and employs her younger sister to run the stall for the remaining three days a week that the market is open. Her trial balance as at 31 March 2013 is shown in Table 3.8.

1. Trade receivables arose from sales made on credit to a nearby hotel.
2. Closing inventories at 31 March 2013 were valued at 63,000 yuan.
3. Two months’ stall rental had been paid in advance at the year-end. Rent is currently paid at the rate of 1,740 yuan per month. 

4. Wages owing at 31 March 2013 amounted to 5,750 yuan.

REQUIRED:

a) Prepare Ming's income statement for the year ended 31 March 2013.

b) Comment on the profitability of the business and suggest how it might be improved.

c) Prepare the statement of financial position as at 31 March 2013.

Transcribed Image Text:

Table 3.8 Debit Credit Yuan Yuan Motor vehicle 75,000 Trade receivables 5,270 Bank overdraft 540 Inventories as at 1|April 2012 59,830 Sales 446,660 Purchases 239,190 Rent 18,500 Wages* 173,850 Other expenses 23,230 Capital account as at 1 April 2012 252,800 Drawings 105,130 700,000 700,000