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Simon runs a small 'one man and a van' haulage business. He has asked you to help him prepare 'a set of accounts for the tax man showing what profit I've made', but he has not kept any significant accounting records during the year. You sit down with him and he tells you that he started his business a year ago by putting £5,000 of his own money into a business bank account and using more of his own money to buy a van for £14,000.
He says that he thinks the van is now worth about £12,000, customers still owe him £3,400, but he owes a garage £300 for diesel. He has kept his bank state- ments and the current one shows that he has £6,100 on a deposit account and a further £700 in a current account. He has drawn £1,300 per month from the business for his living expenses.
Prepare a statement of affairs at the beginning and end of the year and so calcu- late his profit for the year.
Prepare a cost of production summary for each department for the month - Berg Products manufactures one product in two departments on a continuous basis and uses the average method of process cost accounting.
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