Duxbury started in business on 1 January 2017. The following is his trial balance as at 31 December 2017:

Additional information:

1 Inventory at 31 December 2017 was valued at £10 000.

2 At 31 December 2017 an amount of £400 was outstanding for telephone expenses and the business rates had been prepaid by £500.

3 The delivery van is to be depreciated at a rate of 20 per cent per annum on cost.

4 Duxbury decides to set aside a allowance for doubtful debts equal to 5 per cent of trade receivables as at the end of the year.

Required:

Prepare Duxbury’s statement of profit or loss and statement of retained earnings for the year to 31 December 2017 and a statement of financial position as at that date.

Transcribed Image Text:

Capital Cash Delivery van, at cost Drawings Office expenses Purchases Sales Trade payables Trade receivables Dr £ 300 20 000 10 600 12 100 65 000 32 000 140 000 Cr £ 40 000 95 000 5 000 140 000