J. White, a sole trader, has produced the following statements of financial position for the years ended 31 March 20X8 and 31 March 20X9.

J. White is unable to understand why, after he has made a profit for the year ended 31 March 20X9 of £5,800, his bank balance has fallen by £6,500.

Required
Prepare a report explaining how this has occurred.

Transcribed Image Text:

ASSETS Non-current assets Freehold premises Shop fittings Depreciation to date Motor vehicle Depreciation to date Current assets Inventories Trade receivables Bank Cash in till J. White Statements of financial position as at 31 March 20X9 £ 10,000 Total assets EQUITY AND LIABILITIES Equity Capital £ 1,200 (870) 800 (600) 330 200 10,530 15,400 540 3,000 30 18,970 29,500 15,000 £ 1,000 (750) 800 (400) 20X8 £ 10,000 250 400 10,650 11,000 1,000 9,500 50 21,550 32,200 15,000