On 1 May 2015 Jenny Barnes, who is a retailer, had the following balances in her books: Premises £70,000; Equipment £8,200; Vehicles £5,100; Inventory £9,500; Trade accounts receivable £150. Jenny does not keep proper books of account, but bank statements covering the 12 months from 1 May 2015 to 30 April 2016 were obtained from the bank and summarised as follows;

It has been discovered that, in the year ending 30 April 2016, the owner had paid into the bank all shop takings apart from cash used to pay (/) £408 miscellaneous expenses and (//) £500 per month drawings.

On 30 April 2016:

£7,600 was owed to suppliers for inventory bought on credit. The amount owed by trade accounts receivable is to be treated as a bad debt. Assume that there had been no sales on credit during the year. Inventory was valued at £13,620.

Depreciation for the year was calculated at £720 (equipment) and £1,000 (vehicles).

You are asked to prepare a statement of profit or loss for the year ending 30 April 2016. (Show all necessary workings separately.)

 

Transcribed Image Text:

Money paid into bank: Extra capital Shop takings Received from debtors Payments made by cheque: Paid for inventory purchased Purchase of delivery van Vehicle running expenses Lighting and heating Sales assistants' wages Miscellaneous expenses 4 8,000 96,500 1,400 70,500 6,200 1,020 940 5,260 962 Money paid into bank: Extra capital Shop takings Received from debtors Payments made by cheque: Paid for inventory purchased Purchase of delivery van Vehicle running expenses Lighting and heating Sales assistants' wages Miscellaneous expenses 4 8,000 96,500 1,400 70,500 6,200 1,020 940 5,260 962

Answer rating: 100% (QA)

Jenny Barnes Income Statement For the Year Ended 30 April 2016 Revenue Sales 96500 Less Cost of good... View the full answer