Statement of financial position as at 31 December 2014 ASSETS Non-current assets Property, plant and equipment
Question:
Statement of financial position as at 31 December 2014
| ASSETS | £ |
|---|---|
| Non-current assets | |
| Property, plant and equipment | |
| Delivery van at cost | 12,000 |
| Depreciation | (2,500) |
| 9,500 | |
| Current assets | |
| Inventories | 65,000 |
| Trade receivables | 19,600 |
| Prepaid expenses* | 5,300 |
| Cash | 750 |
| 90,650 | |
| Total assets | 100,150 |
| EQUITY AND LIABILITIES | |
| Equity | |
| Original | 50,000 |
| Retained earnings | 26,900 |
| 76,900 | |
| Current liabilities | |
| Trade payables | 22,000 |
| Accrued expenses† | 1,250 |
| 23,250 | |
| Total equity and liabilities | 100,150 |
* The prepaid expenses consisted of rates (£300) and rent (£5,000).
† The accrued expenses consisted of wages (£630) and electricity (£620).
During 2015, the following transactions took place:
The owners withdrew £20,000 of equity as cash.
Premises continued to be rented at an annual rental of £20,000. During the year, rent of £15,000 was paid to the owner of the premises.
Rates on the premises £1,300 were paid for the period 1 April 2015 to 31 March 2016.
A second delivery van was bought on 1 January 2015 for £13,000. This is expected to be used in the business for four years and then to be sold for £3,000.
Wages totalling £36,700 were paid during the year. At the end of the year, the business owed £860 of wages for the last week of the year.
Electricity bills for the first three quarters of the year and £620 for the last quarter of the previous year were paid totalling £1,820. after 31 December 2015, but before the financial statements had been finalised for the year, the bill for the last quarter arrived showing a charge of £690.
Inventories totalling £67,000 were bought on credit.
Inventories totalling £8,000 were bought for cash.
Sales revenue on credit totalled £179,000 (cost £89,000).
Cash sales revenue totalled £54,000 (cost £25,000).
Receipts from trade receivables totalled £178,000.
Payments to trade payables totalled £71,000.
Van running expenses paid totalled £16,200.
The business uses the straight-line method for depreciating non-current assets.
Required:
Prepare a statement of financial position as at 31 December 2015 and an income statement for the year to that date.
Expert Answer:
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