Reference no: EM132763443
Question - Statement of financial position as at 31 December 2008
Assets:
Non-Current Assets: Machinery 25300
Current Assets: Inventories 12200
Trade receivable 21300
Prepaid expenses (rates) 400
Cash 8300
42200
Total assets: 67500
Equity/ Liabilities:
Equity: Original 25000
Retained earnings 23900
48900
Current Liabilities: Trade payables 16900
Accrued expense (wages) 1700
18600
Total equity/Liabilities 67500
During 20, t09he following transactions took place:
1 - The owners withdrew equity in the form of cash of £23,000.
2 - Premises continued to be rented at an annual rental of £20,000. During the year, rent of £25,000 was paid to the owner of the premises.
3 - Rates on the premises were paid during the year as follows for the period 1 April 2009 to 31 March 2010 and amounted to £2000.
4 - Some machinery ( a non-current asset), which was bought on 1 January 2008 for 13000 has proved to be unsatisfactory, it was part-exchanged for some new machinery on 1 January 2009 and WW associates paid a cash amount of 6000. The new machinery would have cost 15000 had the business bought it without the trade-in.
5 - Wages totalling £23800 were paid during the year. At the end of the year, the business owed £860 of wages.
6 - Electricity bills for the four quarters of the year were paid totalling 2700.
7 - Inventories totalling £143000 were bought on credit.
8 - Inventories totalling £12000 were bought for cash.
9 - Sales revenue on credit totalled £211,000 (cost £127,000).
10 - Cash sales revenue totalled £42,000 (cost £25,000).
1-1 Receipts from trade receivables totalled £198,000.
12 - Payments to trade payables totalled £156,000.
13 - Van running expenses paid totalled £17500.
The business uses the reducing-balance method of depreciation for non-current assets at the rate of 30 per cent each year.
Required - Preparation of an Income statement for the year to 31 December 2009 and statement of financial position as that date.