Bruce Drake requests your assistance to prepare the financial statements of his business for the year ended 30 June 2011
Bruce Drake requests your assistance to prepare the financial statements of his business for the year ended 30 June 2011 and has provided you with the following information:
(i) The shop’s assets and liabilities include those listed.
(ii) Motor vehicles acquired for £28,000 and written down to £12,000 were sold in 2011 for £9,000.
(iii) Bruce always banks his takings intact, every day at close of business, leaving a float of £500.
(iv) Rent is agreed at £2,000 per month. Bruce and his family occupy a third of the premises.
(v) A fire in May 2011 destroyed a substantial amount of inventory. An insurance claim was agreed at £30,000.
(vi) Payments made in the year, recorded by Bruce in a diary, are summarised as shown.
(vii) The sales are always effected at cost plus a third.
(a) Record these transactions in a two-column Cash Book.
(b) Prepare the financial statements for the year ended 30 June 2011.
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