On 31st December 2021, the following balances were taken from the books of Alwyn, a sole...

 

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On 31st December 2021, the following balances were taken from the books of Alwyn, a sole trader. Non-current Assets at Cost (1-1-21): Premises Vehicles Office Equipment Accumulted Depreciation (1-1-21): Vehicles Office Equipment Inventory (1-1-21) Purchases Purchases Returns Carriage-in Carriage-out Sales Revenue Sales Returns Discounts Allowed Discounts Received Loan Interest Vehicle Expenses Irrecoverable Debt Accounts Receivable Accounts Payable Salaries Insurance General Expenses Rent Receivable Drawings Loan [7%] Bank Cash Capital (1-1-21) £ 800,000 150,000 66,000 35,300 657,000 2,050 3,050 8,200 4,500 6,500 17,700 600 70,600 50,000 11,000 30,200 24,000 13,000 3,300 1,953,000 £ 30,000 28,000 8,600 1,052,000 2,300 43,100 9,000 100,000 680,000 1,953,000 The following information is also available. 1. The inventory as at 31st December 2021 was valued at £39,350 2. A debt of £550 was considered irrecoverable. The full amount is to be treated as a irrecoverable debt in the accounts for the year ended 31st December 2021 3. An allowance for Receivables is to be created at 2% on the remainder of the Accounts Receivable 4. Rent Receivable is £12,000 per annum and to date only 9 months rent has been received 5. Loan interest due and unpaid was £500 at the year end 6. At 31st December 2021, salaries owing amounted £14,825 7. At 31st December 2021, insurance was prepaid by £500z 8. Alwyn received an invoice for £300 on December 3rd 2021 for vehicle repairs but to date this invoice has not been paid or recorded in Payables 9. Alwyn had taken goods from the business costing £5,500 for her own use. This has not been recorded in the accounts 10. Depreciation is to be provided as follows: Vehicles 20% by the reducing balance method. There were no additions or disposals during the year Office equipment 10% by the straight line method. There were no additions or disposals during the year Premises are not depreciated Required: Prepare a Statement of Profit or Loss for Alwyn for year ended 31st December 2021 and a Statement of Financial Position as at that date [35] On 31st December 2021, the following balances were taken from the books of Alwyn, a sole trader. Non-current Assets at Cost (1-1-21): Premises Vehicles Office Equipment Accumulted Depreciation (1-1-21): Vehicles Office Equipment Inventory (1-1-21) Purchases Purchases Returns Carriage-in Carriage-out Sales Revenue Sales Returns Discounts Allowed Discounts Received Loan Interest Vehicle Expenses Irrecoverable Debt Accounts Receivable Accounts Payable Salaries Insurance General Expenses Rent Receivable Drawings Loan [7%] Bank Cash Capital (1-1-21) £ 800,000 150,000 66,000 35,300 657,000 2,050 3,050 8,200 4,500 6,500 17,700 600 70,600 50,000 11,000 30,200 24,000 13,000 3,300 1,953,000 £ 30,000 28,000 8,600 1,052,000 2,300 43,100 9,000 100,000 680,000 1,953,000 The following information is also available. 1. The inventory as at 31st December 2021 was valued at £39,350 2. A debt of £550 was considered irrecoverable. The full amount is to be treated as a irrecoverable debt in the accounts for the year ended 31st December 2021 3. An allowance for Receivables is to be created at 2% on the remainder of the Accounts Receivable 4. Rent Receivable is £12,000 per annum and to date only 9 months rent has been received 5. Loan interest due and unpaid was £500 at the year end 6. At 31st December 2021, salaries owing amounted £14,825 7. At 31st December 2021, insurance was prepaid by £500z 8. Alwyn received an invoice for £300 on December 3rd 2021 for vehicle repairs but to date this invoice has not been paid or recorded in Payables 9. Alwyn had taken goods from the business costing £5,500 for her own use. This has not been recorded in the accounts 10. Depreciation is to be provided as follows: Vehicles 20% by the reducing balance method. There were no additions or disposals during the year Office equipment 10% by the straight line method. There were no additions or disposals during the year Premises are not depreciated Required: Prepare a Statement of Profit or Loss for Alwyn for year ended 31st December 2021 and a Statement of Financial Position as at that date [35]

Answer rating: 100% (QA)

Income Statement for the year ended 31 December 2021 Revenue Sales 43100 Less Sales Returns 9000 Net ... View the full answer