Bruce Drake requests your assistance to prepare the financial statements of his business for the year ended 30 June 2011 and has provided you with the following information:

(i) The shop’s assets and liabilities include those listed.

(ii) Motor vehicles acquired for £28,000 and written down to £12,000 were sold in 2011 for £9,000.

(iii) Bruce always banks his takings intact, every day at close of business, leaving a float of £500.

(iv) Rent is agreed at £2,000 per month. Bruce and his family occupy a third of the premises.

(v) A fire in May 2011 destroyed a substantial amount of inventory. An insurance claim was agreed at £30,000.

(vi) Payments made in the year, recorded by Bruce in a diary, are summarised as shown.

(vii) The sales are always effected at cost plus a third.

Required:

(a) Record these transactions in a two-column Cash Book.

(b) Prepare the financial statements for the year ended 30 June 2011.

Transcribed Image Text:

As at 30 June Motor vehicles at wdv Office equipment at wdv Inventory at cost Trade receivables Prepaid insurance Balance at bank Trade payables Salaries accrued 2010 £ 2011 41 82,000 106,000 24,500 28,400 142,400 96,500 98,500 118,400 1,200 ? 21,300 19,700 68,600 114,200 18,200 15,600