J. Horner is the proprietor of a shop selling paintings and ornaments. For the purposes of his financial statements he wishes the business to be divided into two departments:

The following balances have been extracted from his nominal ledger at 31 August 2013:

Prepare J. Horner’s departmental income statement for the year ending 31 August 2013, apportioning the costs, where necessary, to show the net profit or loss of each department. The apportionment should be made by using the methods as shown: Area – Fire insurance, Lighting and heating, Repairs, Telephone, Cleaning; Turnover – General office salaries, Accountancy, General office expenses.

Transcribed Image Text:

Department A Paintings Department B Ornaments