The following pertains to the business of Electrical Projects:

Electrical Projects

Trial balance at $30$ June $2023$

Trading account:

Sales $375,000$ 

Opening inventory $43,000$ 

Purchases $128,000$ 

Carriage inwards $7,000$ 

Other revenues and expenses:

Income from franchise $14,000$ 

Rent $44,000$ 

Advertising expense $5,700$ 

Heating and lighting $25,000$ 

Motoring expenses $7,000$ 

Wages $17,000$ 

Discounts allowed $3,500$ 

Carriage outwards $2,500$ 

Balance sheet accounts:

Motor vehicle at cost $64,000$ 

Motor vehicle accumulated depreciation $16,000$ 

Equipment at cost $96,000$ 

Equipment accumulated depreciation $24,000$ 

Receivables $16,000$ 

Allowance for receivables $1,200$ 

Bank $32,000$ 

VAT liability $3,700$ 

Payables $18,400$ 

Long$-$term loan $20,000$ 

Capital $50,000$ 

Drawings $49,600$ 

Suspense account $18,000$ 

Total $540,300540,30$ 

The following information is relevant.

$1.$ The closing inventory at $30$ June $2023$ is valued at $\pounds 36,200.$

$2.$ On further investigation of the suspense account, it was discovered that a cash receipt of $\pounds 18,000$ had been posted to the suspense account. This represents the proceeds from the disposal of a piece of equipment that Electrical Projects had bought exactly two and half years ago at a cost of $\pounds 22,000.$ The equipment was sold on the last day of the financial year.

$3.$ Depreciation on the motor vehicle is provided at $25\%$ per annum on the reducing balance basis.

$4.$ Depreciation on the equipment is provided at $20\%$ per annum on the straight line basis, assuming no residual value.

$5.$ Electrical Projects estimates that $\pounds 1,600$ due from customers will be irrecoverable and must be written off.

$6.$ The allowance for receivables is to be set at $4\%$ of net receivables at $30$ June$\mathrm{ 2}021.$

$7.$ Rent includes a prepayment of $\pounds 1,600.$

$8.$ Advertising expense includes a prepayment of $\pounds 1,300.$

$9.$ The electricity bill will arrive on $5$ July $2023$ and about $\pounds 3,500$ is expected to relate to the period until $30$ June $2023.$

$10.$ The long$-$term loan is repayable in $5$ years$’$ time. Interest payable on the loan is$\mathrm{ 6}\%$ and will be paid once per year.

Required:

Prepare a statement of profit or loss for the year ended $30$ June $2023$ for Electrical Projects.

Answer rating: 100% (QA)

def preparestatementofprofitorloss Prepares a statement of profit or loss for the year ended 30 June 2023 for Electrical Projects Returns A dictionary ... View the full answer