Solution-Prepare an income statement for the year ending

Prepare an income statement for the year ending

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Reference no: EM131810219

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

	Dr (£)	Cr (£)
sales		138,078
Purchase	82,350
carriage	5,144
drawings	7,800
Rent, rates and insurance	6,622
Postage and stationery	3,001
advertising	1,330
Salaries and wages	26,420
Bad debts	877
Allowance for doubtful debts		130
Accounts receivable	12,120
Accounts payable		6,471
Cash in hand	177
Cash at bank	1,002
Inventory as at 1 June 2011	11,927
equipment
At cost	58,000
Accumulated depreciation		19,000
capital		53,091
	216,770	216,770

The following additional information as at 31 May 2012 is available:

(a) Rent is accrued by £210

(b) Rates have been prepaid by £880

(d) Equipment is to be depreciated at 15% per annum using the straight line method

(e) The allowance for doubtful debts to be increased by £40

(f) Inventory at the close of business have been valued at £13,551

Required: Prepare an income statement for the year ending 31 May 2012 and a statement of financial position as at that date.

Reference no: EM131810219

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Prepare an income statement for the year ending

Reference no: EM131810219

Reference no: EM131810219

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