Prepare income statement for the year ended 31st December 2017 and Prepare statement of financial position as at 31st December 2017 for ;
Dr($) Cr($)
purchases & Sales revenue 125000 205000
Carriage on purchases 3750
Return inwards & return outwards 750 1025
Wages and salaries 32750
Rent 9600
Discount allowed and Discount received 490 540
Sundry expenses 32000
Electricity 7300
Opening inventory 12500
Trade receivable & Trade payable 17450 12700
Non current assets
Land 70000
Building 50000
Fixtures 37500
Machinery 20000
Provision for depreciation as at 01st January 2017
Building 10000
fixtures 24000
Machinery 8500
Bank loan 20000
Drawings 2000
Provision for doubtful debts as at 01st 2017 900
Capital 138425
Additional information:
1. Closing inventory as at 31st December 2017 was valued at $8075
2. Rent for the year $10000
3. Electricity $300 was prepaid
4. $450 is to be charged as bad debts. 5% of trade receivable should be set for doubtful debts.
Depreciation is charged as following:
Building is to be depreciation by using straight line method at 10%
Fixtures is to be depreciation at 40% using diminishing reducing balance method.
Machinery disposed as at 31st December 2017 for $12000. Machinery should be depreciated by using straight line method at 5% per annum
Goods drawing during the year was $2100.
