The following are summaries of the cash book and bank accounts of J. Duncan who does not keep his books using the double entry system.

You are required to:

(a) Calculate the value of J. Duncan’s capital on 1 January 2011.

(b) Prepare the Income Statement for the year ending 31 December 2011.

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Bank Summary Balance on 1 January 2011 Receipts Accounts receivable Cash banked Payments Trade accounts payable Rent Machinery Wages Insurance Accounts receivable (dishonoured cheque) Loan interest Balance on 31 December 2011 Cash Summary Balance on 1 January 2011 Receipts Cash sales Accounts receivable Payments Drawings Repairs Electricity Cash banked Balance on 31 December 2011 The following referred to 2011 Bad debts written-off Discount received Goods withdrawn by J. Duncan for own use Credit note issued The following additional information is available. Inventory Machinery Rent prepaid Rent owing Accounts receivable Accounts payable Loan from bank at 8% Loan interest owing E 26,000 4,100 18,500 1,400 7,500 6,100 1,450 250 300 14,000 400 9,500 300 750 4,100 6,300 2,400 5,000 1 January 2011 4,100 12,600 200 8,000 30,100 38,100 35,500 2,600 14,400 14,700 300 14,650 50 3,200 15,900 400 350 300 1,200 31 December 2011 250 5,000 2,500 5,000 100