Question
Lesley Brush operates an art gallery, known as The Paint Brush on the High Street in Topsham. The statement of financial position of The Paint
Lesley Brush operates an art gallery, known as The Paint Brush on the High Street in Topsham. The statement of financial position of The Paint Brush at 31 December 20X0 and 31 December 20X1 is shown below.
THE PAINT BRUSH STATEMENT OF FINANCIAL POSITION | ||
| 31/12/X1 | 31/12/X0 |
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ASSETS |
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Non-current assets |
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Equipment at cost | 90 000 | 90 000 |
Accumulated depreciation | (81 000) | (72 000) |
Current assets |
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Inventory | 48 000 | 45 000 |
Accounts receivable | 56 250 | 36 000 |
Allowance for doubtful debts | (11 250) | (7 200) |
Bank | 171 000 | 72 000 |
| 273 000 | 163 800 |
EQUITY AND LIABILITIES |
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Equity |
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Capital | 120 000 | 100 000 |
Retained earnings | 123 000 | 45 800 |
Current liabilities |
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Accounts payable | 30 000 | 18 000 |
| 273 000 | 163 800 |
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The following information is relevant:
- No equipment was purchased or sold during the year ended 31 December 20X1.
- All sales are on credit. Cash collected from customers during the year ended 31 December 20X1 amounted to 217 500 and bad debts of 2 250 had been written off against accounts receivable during the year.
- The accounts payable represents amounts owing to suppliers in respect of goods for resale. Cash payments to suppliers during the year ended 31 December 20X1 amounted to 142 500.
- During the year ended 31 December 20X1, contributions by the owner amounted to 20 000, while cash distributions to the owner amounted to 7 500.
Calculate the sales revenue and the purchases for the year ended 31 December 20X1.
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