Vincent Gogh, a shopkeeper, has the following trial balance.

You also have the following additional information. 1. Closing inventory as at 31 December 2012 is £9,000. 2. V. Gogh owes £350 for electricity. 3. £200 of the rent is paid in advance.

Required:

Prepare V. Gogh’s income statement for the year ended 31 December 2012 and a statement of financial position as at 31 December 2012.

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V. Gogh Trial Balance as at 31 December 2012 Debit Credit Revenue 40,000 Sales returns 500 Purchases 25,000 Purchases returns 450 Opening inventory 5,500 Trade receivables 3,500 Trade payables 1,500 Cash at bank 1,300 Long-term loan 3,700 Motor car 8,500 Shop 9,000 Business rates 1,000 Rent 600 Electricity 350 Telephone 450 Insurance 750 General expenses 150 Wages 10,500 Drawings 12,900 Equity 34,350 80,000 80,000