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.