George's balance sheet at 31 May 1998 anda summary of his transactions for the year to 31
Question:
George's balance sheet at 31 May 1998 anda summary of his transactions for the year to 31 May 1999 are shown below:
Notes:
1.
Prepayments consist of Business rates £750 and Insurance premiums
£500.
2.
Accruals consist of Telephone £230 and Electricity £610.
Summarised transactions during the year to 31 May 1999:
(a) Stock costing 71,210 was purchased on credit from suppliers. Stock costing a further 5,770 was purchased and paid for immediately by cheque.
(b) Stock costing 1,090 was returned to suppliers.
(c) Stock was sold to credit customers for 93,020. Sales amounting to a further 6,100 were made to customers who paid immediately by cheque.
(d) Stock originally sold for 4,380 was returned by customers.
(e) Cheques totalling 68,880 were sent to suppliers from whom stock had been bought on credit. Cash discounts received from these suppliers were 420.
(f) Cheques totalling 89,340 were received from customers to whom stock had been sold on credit. Cash discounts allowed to these customers were 1,070. (g) George took stock costing 500 from the business for his own use.
(h) Tools and equipment costing £2,500 were paid for by cheque.
(i) Expenses paid for by cheque were salaries £29,000 (including £10,000 for George), business rates £4,700, electricity £3,760, telephone £1,540 and insurance £900. Bank interest of £2,400 was charged during the year.
Accruals at 31 May 1999 were Telephone £260 and Electricity £690.
Prepayments at 31 May 1999 were Business rates £790 and Insurance premiums £520. The cost of George's closing stock at 31 May 1999 was £6,190.
Required:
Write up George's ledger accounts for the year to 31 May 1999. Also prepare a trading and profit and loss account for the year to 31 May 1999 and a balance sheet as at that date. (Depreciation may be ignored).
Step by Step Answer:
