Priti is a trader. Her financial year ends on 31 March. Her trial balance on 31 March 20–4 was as follows:

Additional information:

1. At 31 March 20–4:

Inventory was valued at $41,050.
Commission receivable outstanding amounted to $110.
Insurance prepaid amounted to $180.
Rates accrued amounted to $260.
Wages accrued amounted to $1,600.

2. A debt of $150 should be written off as irrecoverable and the provision for doubtful debts should be maintained at 5% of the remaining trade receivables.
3. Fixtures and fittings are being depreciated at 20% per annum using the straight line method.
4. Motor vehicles are being depreciated at 25% per annum using the reducing balance method.

a. Prepare the income statement for the year ended 31 March 20–4.
b. Prepare the statement of financial position at 31 March 20–4.

Transcribed Image Text:

Capital 390 000 Drawings 54 000 Trade receivables 49270 Trade payables 43500 Bank 21335 Premises at cost 300000 Fixtures and fittings at cost 35000 Motor vehicles at cost 24000 Provision for depreciation of fixtures and fittings 14000 Provision for depreciation of motor vehicles 10500 Provision for doubtful debts 2360 Revenue 644 000 Inventory 1 April 20-3 36000 Purchases 528 850 Sales returns 1050 Carriage inwards 750 Commission receivable 1030 Rates and insurance 10400 Wages 39400 Administration expenses 5335 1105 390 1105390 is