J Tocher started business on 1 April 2016 selling one model of digital cameras on hire purchase. During the year to 31 March 2017 he purchased 2,000 cameras at a uniform price of £110 and sold 1,900 cameras at a total selling price under hire purchase agreements of £165 per camera, payable by an initial deposit of £45 and 10 quarterly instalments of £12. 

The following trial balance was extracted from Tocher’s books as at 31 March 2017.

The personal accounts of customers are memorandum records (i.e. they are not part of the double entry system).
Tocher prepares his financial statements on the basis of taking credit for profit (including interest) in proportion to cash collected from customers.
Prepare Tocher’s hire purchase statement of profit or loss for the year ending 31 March 2017 and a statement of financial position as at that date. Ignore depreciation of non-current assets.

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Capital Drawings Non-current assets Purchases Cash collected from customers Rent, business rates and insurance Wages General expenses Balance at bank Sundry trade accounts payable E 40,000 9,500 220,000 5,000 27,000 5,100 13,026 319,626 £ 175,926 131,100 12,600 319,626