Question 2

Jane Allen is a sole trader running a small chemist shop. She provides you with the following balances from her ledger accounts at 30 June, 2020. The adjusting entries have already been completed and the list of accounts is in no particular order.

Account title FY2020

J Allen, Capital 180 000

Office Equipment 21 500

Cost of Goods Sold 124 870

Accumulated Depn - Office Equip 5 900

Salaries Expense Payable 1 240

Inventory 95 412

Inventory Shortage Expense 160

Discount Received 680

Shop Fixtures and Fittings 25 980

Accum Depn - Shop Fixtures and Fittings 12 800

Salaries Expense 64 200

Accounts Receivable 29 320

Depn Expense - Shop Fixtures and Fittings 4 400

J Allen, Drawings 55 000

Telephone Expense 9 050

Accounts Payable 7 950

Sales Revenue 238 146

Prepaid Insurance 650

Cash at Bank 19 562

Insurance Expense 1 200

Depreciation Expense - Office Equip 1 568

Electricity Expense 4 450

Sales Returns and Other Allowances 283

Required: Develop Income Statement and notes for the year ended 30 June, 2020. You should show net figures for 'Sales Revenue', 'Cost of Sales' and 'Depreciation Expense' and provide a 'Note' for each of these lines.