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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

(c)  £2,211of carriage represents carriage inwards on purchase

(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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