1. Inventories as at 31/12/2020 were €65,000.
2. Interest on bank loan is 10% on the year-end balance and is paid in two equal instalments.
3. Rent is €500/month. At the beginning of the year there was no rent accrued or prepaid.
4. Insurance is €300/month. At the beginning of the year there was no rent accrued or prepaid.
5. A bonus to employees of €4,000 regarding their performance in the year ended 31 December 2020 was paid in January 2021. This is the first time that such a bonus was paid.
6. Motor vans are depreciated using the Reducing Balance method at 30%. Motor Van B was bought on the 1 July 2020.
7. REQUIREMENTS 
8. Prepare the Income Statement for the year ended 31 December 2020. 
9. Prepare the Balance Sheet as at 31 December 2020. 
10. Explain the main difference between Financial Accounting and Management Accounting and list at list 4 main user groups of financial statements. 

 

Transcribed Image Text:

Thomas has a trading business. The Trial Balance as at 31 December 2020 was as follows: TRIAL BALANCE AS AT 31 DECEMBER 2020 Debit € Equity a/c 1/1/2020 Insurance a/c Sales a/c Salaries a/c Electricity a/c Trade receivables/payables Sales returns a/c Purchases a/c Purchases returns a/c Carriage inward costs a/c Carriage outward costs a/c Motor Van A Cost Motor Van A Accumulated depreciation 1/1/20 Motor Van B Cost Cash at bank and in hand a/c Inventories a/c 1/1/2020 Bank Loan a/c Interest on bank loan a/c Rent a/c 3,000 22,000 6,000 45,000 5,000 140,000 6,000 4,000 12,000 20,000 54,000 34,000 4,000 5,000 360,000 Credit € 12,000 220,000 40,000 4,000 4,000 80,000 360,000 Thomas has a trading business. The Trial Balance as at 31 December 2020 was as follows: TRIAL BALANCE AS AT 31 DECEMBER 2020 Debit € Equity a/c 1/1/2020 Insurance a/c Sales a/c Salaries a/c Electricity a/c Trade receivables/payables Sales returns a/c Purchases a/c Purchases returns a/c Carriage inward costs a/c Carriage outward costs a/c Motor Van A Cost Motor Van A Accumulated depreciation 1/1/20 Motor Van B Cost Cash at bank and in hand a/c Inventories a/c 1/1/2020 Bank Loan a/c Interest on bank loan a/c Rent a/c 3,000 22,000 6,000 45,000 5,000 140,000 6,000 4,000 12,000 20,000 54,000 34,000 4,000 5,000 360,000 Credit € 12,000 220,000 40,000 4,000 4,000 80,000 360,000

Answer rating: 100% (QA)

Income Statement for the year ended 31 st December 2020 Particulars Amount In euro Sales 220000 Less Sales return 5000 Total Sales 215000 Cost of Goods Sold 105000 Employee Benefit Expense salary Bonu... View the full answer