Reference no: EM132841329

Question - The following trial balance has been extracted from the ledger of Mr Yousef, a sole trader.

TRIAL BALANCE AS AT 31 December 20X9

Sales 138,000 (cr)

Purchases 78,000 (dr)

Delivery expenses 6,500 (dr)

Drawings 20,200 (dr)

Prepayment for insurance 3,300 (dr)

Postage and stationery 7,700 (dr)

Advertising 1,100 (dr)

Salaries and wages 27,000 (dr)

Irrecoverable debts 580 (dr)

Receivables 15,000 (dr)

Payables 6,000 (cr)

Cash on hand 1,200 (dr)

Cash at bank 11,500 (dr)

Inventory as at 1 January 20X9 14,500 (dr)

Equipment at cost 37,500 (dr)

Accumulated depreciation 12,800 (cr)

Capital 47,280 (cr)

6% Loan 20,000 (cr)

Total 224,080 224,080

The following additional information as at 31 December 20X9 is available.

The bill for telephone expense is received quarterly in arrears. You have received a bill for a telephone expense on 1st of February in the amount of $450.

Prepayment on Insurance was made on 1st of August 2019.

$2,500 of delivery expenses represents delivery on purchases made and the rest is for the delivery of the products that we have sold

Equipment has to be depreciated. The useful life of the Equipment is 10 years with the salvage value of $2,500. The method of depreciation is a declining balance method.

The allowance for receivables has to be equal to 5% of Receivable balance

Inventory at the close of business has been valued at $5,000

Salary for December of $3,100 has not been accrued by the accountant.

The sales figure includes $2,000, for which the services have not actually been performed.

Interest expense for the year was $700.

The accountant forgot to show the receipt of cash of $1,000 from your creditors.

The Loan was obtained on 1st of November 20X9.

Required - Make a statement of profit or loss for the year ended 31 December 20X9?