Your work schedule for the current week requires you to prepare four different types of draft final accounts for approval by your manager. The information for these accounts is presented to you in a number of different forms. You commence by looking at some financial information for a client, a sole trader called Palmer. The client wishes to know his net profit for the trading year, but complete accounting records have not been maintained.

You have the following information for the accounting year to 31 July 2014 to assist with the production of the information for the trader:

Sole trader Palmer $

Opening cash in hand at bank 1 August 2013 68,000

Debtors at 1 August 2013 40,000

Cash Received from debtors in year to 31 July 2014 780,000

Debtors at 31 July 2014 60,000

Bad debts written off during the year to 31 July 2014 0

Creditors for purchases at 1 August 2013 54,000

Cash paid to suppliers in year to 31 July 2014 680,000

Creditors for purchases at 31 July 2014 72,000

Stock of goods for resale (Inventory) at 1 August 2013 25,000

Stock of goods for resale (Inventory) at 31 July 2014 64,000

Cash paid for other expenses in year to 31 July 2014 90,000

Cash drawings in year to 31 July 2014 50,000

Task 2 a) You are required to calculate:

net profit for Palmer for the year to 31st July 2014, which arrives at a net profit of $51,000, and

the traders cash in hand at bank, which should be $28,000 as at 31st July 2014