Tony Lamb deals in alarm clocks of a standard make and model. He buys the clocks for £40 each and sells them for £60. The year-end Trial Balance appears as shown. You are informed as follows:

(a) 500 alarm clocks distributed free for advertising purposes have not been accounted for.

(b) Motor vehicles are depreciated at 20% p.a. on the straight-line method and furniture at 10% p.a. using the reducing balance method.

(c) The loan obtained from Tina Small on 1.11.2009 at interest calculated at 10% p.a. is repayable by October 2014.

(d) Rent for office premises is agreed at £24,000 p.a.

(e) Salary £6,000 and audit fees £3,000 remain unpaid at the year-end.

(f) A debt of £4,000 is to be written off and the allowance needs to be adjusted to cover 5% of remaining trade receivables.

(g) An inventory count conducted on 7 October identified that there are 1,830 alarm clocks in the warehouse. Between 1 and 7 October purchases and sales amounted to £2,000 and £1,200 respectively. Any alarm clocks identified as missing should be regarded as those taken by Tony as a gift for members of his family.

Required: 

Show your calculation of the alarm clocks removed by Tony and prepare the Statement of financial performance for the year ended 30 September 2010 and the Statement of financial position as at that date. 

Transcribed Image Text:

Trial Balance as at 30 September 2010 Motor vehicles Furniture Accumulated for depreciation: Motor vehicles Furniture Inventory - 30 September 2009 Purchases Sales Salaries Stationery Advertising Postage Sales commission Loan to manager Trade receivables Trade payables Loan from Tina Small Light and heat Rent Allowance for doubtful debts Carriages outward Cash and bank balance Capital - Tony Lamb £'000 £'000 180 90 I 120 640 - 72 12 39 8 5 10 204 - - 12 30 I a 9 18 - I I 60 30 I I 990 I I I I I I 134 150 IIL 5 I I 80 1,449 1,449