The following balances are extracted from the books of Riz who is a sole trader as at 31-12-2020.

Dr £ Cr £

Debtors 176512

Creditors 157710

Office expenses 30240

Telephone expenses 26208

Purchases. 1209600

Electricity 212184

Machine 1713600

Wages 493920

Opening profit 73862
Allowance for receivables. 7420

Sales 2400552

Sales return. 22260

loan 218820

Rent 100800

Acc. Depreciation machine. 514080

Acc. Depreciation furniture 105940

Capital 898590

Opening inventory 44352

Bank 131040

Furniture 201600

Drawings 8610

Interest 6048

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4,376,974 4,376,974

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You are also given the following additional information at 31-12-2020:

1. Closing stock at the end of the year is £15,000

2. Salaries wages outstanding as at 31 December 2016 amounted to £20,000

3. Electricity bill outstanding as at 31 December 2016 amounted to £11,000 4. Rent paid for the next period is £5,000.

5. The Machine is depreciated on straight line method. The useful life is 10 years. 6. Furniture is depreciated using reducing balance method. The depreciation percentage is 20%.

Required:

1. Income statement and statement of financial position as year ended at 31st Dec 2020. 

2. Statement of financial position as year ended at 31st Dec 2020.

Answer rating: 100% (QA)

Income statement and Statement of financial position are two important financial statements that are ... View the full answer