Rick Alderman owns a shop. Because of a recent bereavement he has neglected to maintain full accounting
Question:
Rick Alderman owns a shop. Because of a recent bereavement he has neglected to maintain full accounting records. To prepare the financial statements for the year ended 31 December 2011 he has gathered the following information:
(i) Total operating expenses for the year, other than depreciation, were reported as £214,500 in the year ended 31 December 2010. Corresponding amount for the current year is expected to be 20% more.
(ii) Assets and liabilities of the shop were as stated.
(iii) Apart from new furniture acquired on 1 October 2011, other furniture was all acquired when the business started in January 2009. Furniture is depreciated at 10% per annum using the straight-line method.
(iv) Rick has no other source of income and he draws from the business £400 per week.
(v) Sales are always effected at cost plus 50%.
Required:
Prepare the financial statements for Rick’s shop for the year ended 31 December 2011.
Transcribed Image Text:
As at 31 December
2010
Furniture at cost
Inventory at cost
Trade receivables
Prepaid rent
Cash and bank
Trade payables
Accrued expense
£
240,000
426,400
48,200
6,000
38,600
185,200
12,600
2011
£
300,000
316,500
64,400
55,200
212,600
17,800
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