Lakshmi runs a secretarial agency. The following trial balance was prepared on 31 January 20–1:

Additional information:

1. At 31 January 20–1:
• Commission receivable outstanding amounted to $30
• Wages accrued amounted to $320.

2. The insurance is for 15 months from 1 February 20–0.
3. Lakshmi occupies a flat above the business premises and one quarter of the rates relate to this flat.
4. Office equipment is being depreciated at 20% per annum on cost.
5. Motor vehicles are being depreciated at 20% per annum using the reducing balance method.
6. The provision for doubtful debts is to be maintained at 2% of the trade receivables.

a. Prepare the income statement for the year ended 31 January 20–1.
b. Prepare the statement of financial position at 31 January 20–1.

Transcribed Image Text:

Capital 1 February 20-0 98000 Drawings 5000 10 year loan from AB Loans 15000 Premises at cost 90000 Office equipment at cost 10500 Motor vehicles at cost 16900 Provision for depreciation of office equipment 4200 Provision for depreciation of motor vehicles 6480 Trade receivables 7800 Provision for doubtful debts 172 Bank 2888 Fees 21820 Commission receivable 490 Wages 10 200 Insurance 2250 Rates 3200 Office expenses 2450 Loan interest 750 149 050 149050