Mr. Lee started in business on 1 January 2016 with £35,000 in a bank account. Unfortunately he did not keep proper books of account. He is forced to submit a calculation of profit for the year ended 31 December 2019 to the Income Tax Department.

He ascertains that at 31 December 2016 he had stock valued at cost £6,200, a van which had cost £6,400 during the year and which had depreciated during the year by £1,600, debtors of £15,200, expenses prepaid of £310, a bank balance of £33,490, a cash balance £270, trade creditors £7,100, and expenses owing £640. 

His drawings were:

Cash £400 per week for 50 weeks

Cheque payments £870.

Required: 

Prepare a statements to show the profit or loss for the year ended December 31, 2019.

Answer rating: 100% (QA)

To prepare a statement of profit or loss for the year ended 31 December 2019 we need to determine th... View the full answer