The following trial balance was extracted from the books of C Lalor, a sole trader, on...

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The following trial balance was extracted from the books of C Lalor, a sole trader, on 31 December 2020: Buildings Accumulated depreciation on buildings Fixtures and fittings Accumulated depreciation on fixtures and fittings Purchase Returns Inventory as at 1/1/2020 Receivables and payables Long-Term loan Bank VAT liability Sales & purchases Returns Discounts Carriage inwards Carriage outwards Electricity Bank interest and charges Telephone, internet and media costs Insurance Rate charges Wages and salaries Advertising Sales Returns Drawings Accumulated profits/losses Capital Debit 555,000 126,730 26,540 105,580 762,230 21,740 4,110 7,740 3,100 6,450 200 12,030 8,740 6,120 94,840 9,620 5,740 8,130 You are required to prepare: a) The Income Statement for the year ended 31 December 2020. b) The Statement of Financial Position as at 31 December 2020. 1,316,560 Credit 77,430 41,520 3,150 102,000 24,750 18,940 11,650 314,150 16,250 7,330 51,250 200,060 1,316,560 1. An inventory count took place on 31 December 2020. The value of closing inventory was €/£31,660. Included in the valuation was inventory, which had cost €5000 but were damaged in a fire. Management can still sell the goods at a reduced cost of €3000 after it is repackaged for €540 2. One of C Lalors' Receivables is unable to pay a debt €10,500. It was decided to write this debt off. 3. Allowance to be made for depreciation as follows: Buildings 2% straight line Fixtures and fittings 10% reducing balance The depreciation policy is to charge depreciation on a monthly basis from the month of purchase to the month of sale/disposal. Depreciation should be calculated to the nearest whole number. 4. €/£7,080 of insurance in the trial balance above relates to the year from 1 July 2020 to 30 June 2021. Question continued on next page...... Assessor: Fergal Lalor Question continued... 5. €/£650 in rates charges are to be accrued as at 31 December 2020. 6. C Lalor has decided to create an allowance for receivables of 5% of the year-end closing receivables. (6 Marks) The following trial balance was extracted from the books of C Lalor, a sole trader, on 31 December 2020: Buildings Accumulated depreciation on buildings Fixtures and fittings Accumulated depreciation on fixtures and fittings Purchase Returns Inventory as at 1/1/2020 Receivables and payables Long-Term loan Bank VAT liability Sales & purchases Returns Discounts Carriage inwards Carriage outwards Electricity Bank interest and charges Telephone, internet and media costs Insurance Rate charges Wages and salaries Advertising Sales Returns Drawings Accumulated profits/losses Capital Debit 555,000 126,730 26,540 105,580 762,230 21,740 4,110 7,740 3,100 6,450 200 12,030 8,740 6,120 94,840 9,620 5,740 8,130 You are required to prepare: a) The Income Statement for the year ended 31 December 2020. b) The Statement of Financial Position as at 31 December 2020. 1,316,560 Credit 77,430 41,520 3,150 102,000 24,750 18,940 11,650 314,150 16,250 7,330 51,250 200,060 1,316,560 1. An inventory count took place on 31 December 2020. The value of closing inventory was €/£31,660. Included in the valuation was inventory, which had cost €5000 but were damaged in a fire. Management can still sell the goods at a reduced cost of €3000 after it is repackaged for €540 2. One of C Lalors' Receivables is unable to pay a debt €10,500. It was decided to write this debt off. 3. Allowance to be made for depreciation as follows: Buildings 2% straight line Fixtures and fittings 10% reducing balance The depreciation policy is to charge depreciation on a monthly basis from the month of purchase to the month of sale/disposal. Depreciation should be calculated to the nearest whole number. 4. €/£7,080 of insurance in the trial balance above relates to the year from 1 July 2020 to 30 June 2021. Question continued on next page...... Assessor: Fergal Lalor Question continued... 5. €/£650 in rates charges are to be accrued as at 31 December 2020. 6. C Lalor has decided to create an allowance for receivables of 5% of the year-end closing receivables. (6 Marks)

Answer rating: 100% (QA)

Note Purchase and sales are given in credit and ... View the full answer