J. Waite and P. Watcher’s trial balance as at 30 November 2012 is set out below.

1. Closing inventory is £15,000.

2. Salaries are £18,000 for Waite and £16,000 for Watcher.

3. There is £300 owing for rent.

4. Depreciation for the year is £2,000 on land and buildings and £3,000 on motor vehicles. The business was started on 1 December 2011.

5. The split of profits is 3 Watcher:2 Waite. Required: Prepare the income statement for year ended 30 November 2012 and the statement of financial position as at 30 November 2012.

Transcribed Image Text:

Capital accounts: Waite Watcher 88,000 64,000 Current accounts: Waite 2,500 Watcher 12,000 Drawings: Waite 13,300 Watcher 6,300 Land and buildings at cost 166,313 Motor vehicles at cost 65,000 Opening inventory Trade receivables 9,000 12,000 Trade payables 18,500 Bank 6,501 Electricity 3,406 Wages 14,870 Telephone 1,350 Rent and business rates 6,660 Long-term loan 28,000 Revenue 350,000 Purchases 245,000 Interest on loan 2,800 Other expenses 5,500 560,500 560,500