J Wild started business on 1 April 2002 selling one model of digital cameras on hire purchase.

During the year to 31 March 2003 he purchased 2,000 cameras at a uniform price of £90 and sold 1,900 cameras at a total selling price under hire purchase agreements of £150 per camera, payable by an initial deposit of £45 and 10 quarterly instalments of £10.50p.

The following trial balance was extracted from Wild's books as at 31 March 2003.

The personal accounts of customers are memorandum records (i.e. they are not part of the double entry system).
Wild prepares his financial statements on the basis of taking credit for profit (including interest)
in proportion to cash collected from customers.
Prepare Wild’s hire purchase income statement for the year ending 31 March 2003 and a balance sheet as at that date.
Ignore depreciation of non-current assets.

Transcribed Image Text:

Capital 136,026 Drawings 40,000 Non-current assets 9,500 Purchases 180,000 Cash collected from customers 125,400 Rent, business rates and insurance 5,000 Wages 27,000 General expenses 5,100 Balance at bank 7,246 Sundry trade accounts payable 12,600 274,026 274,026