Angelina Jolie opened a business in London on 1 January. She was able to arrange two main agencies under the same business — one for word processing and the other for shoe repairs.

For the first six months, Jolie was able to produce the following information:

At the end of December she was able to produce the following additional information:

The advertising payment represents a 12-month advertisement which appears in the shopping centre newspaper.
The motor vehicle was purchased on 1 January and is expected to have a useful life of four years, at which time its residual is expected to be $1,000.
Required Prepare a profit and loss account for the first six months of Jolie’s operations.

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Cash receipts Initial deposit to start business Customers word processing - shoe repairs Cash payments To word processor To shoe repairer Rent Wrappings $ 5,000 6,000 3,000 14,000 4,000 2,500 1,000 500 Advertising 500 Motor vehicle 5,000 Motor vehicle expenses 300 13,800 Cash on hand 200