Christopher's Computing Services commenced business on 1 January 2008. The following is a summary of the cash records kept by the firm for the 12 months ended 31 December 2008.
Cash Receipts
Initial capital contributed by the owner.........$50 000
Receipts from customers ......................... 156 000
Bank loan - repayable in 5 years ............... 130 000
$336 000
Cash Payments
Equipment purchased 1 Jan.13 ................ 40 000
Rent ..................................................... 52 000
Office wages ...................................... 36 000
Advertising ....................................... 14 000
Insurance............................................ 1 020
Light and power ................................. 15 900
Interest paid .......................................15 500
$174 420
Additional information at 31 December 2013.
• An amount of $12,000 is owing for a job completed by Christopher's Computing Services on the 15th December 2013.
• The equipment is to be depreciated using the straight-line method. It is estimated it will be retained by the business for four years and then traded-in for $12 000.
• The cash paid for rent of premises includes $4000 of rent paid in advance for January 2014.
Required:
a) Prepare an income statement for Christopher's Computing Services for the 12 months ending 31 December 2013.
b) Prepare a classified balance sheet for Christopher's Computing Services at 31 December 2013.