Gareth Carson Corporation has been in business since 1 May 2010. The company has prepared the draft statement of income shown below and has asked yOu to check if it is correct.

Additional information:
1. Closing inventory cost $6378. This includes damaged items that cost $1564. These could be repaired for $375 and then sold for $1820.
li. The figure for rent is the total paid in the year to 30 April 2011. Five equal payments were made for the three-month periods commencing on 1 May 2010, 1 August 2010, 1 November 2010, 1 February 2011 and 1 May 2011.
111. Carriage and delivery comprise $1428 for carriage on goods received and $418 for delivering goods to customers.
iv. The charge for wages is made up of $28 000 paid to Gareth and $3580 paid to a part-time employee.

Required: Prepare Gareth’s corrected statement of income for the year to 30 April 2011, showing both gross profit and net profit. [ACCA adapted]

Transcribed Image Text:

Sales Purchases Draft Statement of Income as at 30 April 2011 $97 600 $46 840 15 000 Rent Electricity Telephone Returns inward Carriage and delivery 4 800 2 750 954 1 846 Wages 31 580 Other expenses 839 104 609 Trade discounts on purchases (2 423) 103 086 Loss for year (5 486)