The trial balance for Smart Sports is given in Table 3.4:

1. Betty’s loan to the business was interest-free for the first six months of the year, after which time interest was to be paid at the rate of 6% per annum. No interest had been paid during the year.
2. Purchases remaining unsold in inventory at the year-end amounted to £2,700.
3. Electricity used but not yet paid for as at the year-end amounted to £480.
4. Insurance had been prepaid by £351 at the year-end but not yet accounted for.

Using the partially completed financial statements to guide you, prepare the income statement for Smart Sports as at 31 December 2011 (Table 3.5) and the statement of financial position (Table 3.6) as at that date.

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Table 3.4 Smart Sports Trial balance as at 31 December 2011 Debit Credit Capital 10,000 Loan 12,000 Sales 51,000 Purchases 34,500 Electricity 1,920 Insurance 1,750 Telephone 1,500 Sundry expenses 1,650 Drawings 7,200 Accountant's fees 1,500 Delivery costs 1,200 Printing machine 5,500 Computer 3,500 Bank balance 11,080 Trade receivables 4,100 Trade payables 2,400 75,400 75,400