Reference no: EM132969684

Question - Orla Brown has been running her own business as shoe retailer since 1st January 2017. She has always struggled to keep her accounting records accurately. She has asked you to help her prepare her annual financial statements for the year to 31st December 2020. She gives you the following information.

Balances Due from customers Owed to suppliers Inventory

Bank Cash

Accrued property expenses Accrued administration expenses

At 31st December 2020 At 31st December 2019 ££

1. She also had equipment with a net book value of £16,000 at 31st December 2019.

2. Transactions during the year ended 31st December 2020:

(i) Cash sales £31,200 and cash purchases of £17,200 were made during the year.

(ii) Receipts from customers of £176,360 were banked.

(iii) Payments to suppliers were made by cheque for £82,600.

(iv) New equipment was purchased by bank transfer for £8,000.

(v) Payment for property expenses during the year was made by cheque, £27,000.

(vi) Administration expenses paid by cheque were £21,900.

3. Depreciation is calculated as £2,000 for the year ended 31st December 2020.

Required -

(a) Prepare a bank summary for the year ended 31st December 2020 showing the opening balance, the receipts and payments and the closing balance. NB. Any funds unaccounted for are to be treated as drawings.

(b) Calculate total sales and total purchases for the year ending 31st December 2020.

(c) Calculate the capital account balance as at 1st January 2020.

(d) Prepare an Income Statement for the year ended 31st December 2020.

(e) Prepare a Statement of Financial Position as at 31st December 2020.