Session 5: Preparing financial statements from transactions I. Miranda's Bookshop Limited On 1 January 2004, Miranda decides to set up a company which will own and operate an antiquarian book shop in Central London. She has estimated that to put the business on a sound financial footing, she actually needs 40,0OD. This will be provided as follows: 1, 10,000 from a friend who will be a 50% shareholder along with Miranda who will also contribute 10,000 2. a 20,000 3 year hank loan During the first year of trading, the company has the following transactions: 3. purchase of a shop for 20,000 cash 4, purchase of books on credit for 10,000 5. sale of books originally costing 5,000 for 10.000 cash 6. payment of 2,000 clectricity bil 7. payment of interest on bank loan of 3,000 8. purchase of books costing 30,000 on credit 9 sale of books originally costing 20.000 for 35,000 cash 10. payment of salary to bookshop manager of 10,000 11. payment of 25,000 to trade creditors Prepare a worksheet to record these transactions and use this worksheet to prepare a balance sheet and profit and loss account