The following are summaries of the cash book and bank accounts of P. Maclaran who does not keep her books using the double entry system.

You are required to:

(a) Calculate the value of P. Maclaran’s capital on 1 January 2011.

(b) Prepare the Income Statement for the year ending 31 December 2011.

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Bank Summary Balance on 1 January 2011 Receipts Accounts receivable Cash banked Payments Trade accounts payable Rent Machinery Wages Insurance Accounts receivable (dishonoured cheque) Loan interest Balance on 31 December 2011 Cash Summary Balance on 1 January 2011 Receipts Cash sales Accounts receivable Payments Drawings Repairs Electricity Cash banked Balance on 31 December 2011 The following referred to 2011 Bad debts written-off Discount received Goods withdrawn by P. Maclaran for own use Credit note issued The following additional information is available. Inventory Machinery Rent prepaid Rent owing Accounts receivable Accounts payable Loan from bank at 10% Loan interest owing 35,000 2,200 31,000 1,100 3,400 9,200 850 80 500 9,700 1,100 6,600 1,400 570 2,200 150 8,100 5,700 7,000 1 January 2011 2,300 9,800 240 600 1,200 640 6,000 37,200 43,200 (46,130) (2,930) 60 9,200 4,800 7,000 200 10,800 10,860 (10,770) 90 31 December 2011 5,400 10,400 100