Reference no: EM132472706

Point 1: Prize money earned over the trading period amounted to £400,000. Prize money is always paid in cash as soon as the tournament has ended. In addition, Nanna took part in two modelling exhibitions during the period. The exhibition in Rome in September 20x7 earned her £50,000, while the exhibition in New York in March 20x8 earned her £80,000. Money from exhibitions is always paid in cash two months after the exhibition has taken place.

Expenditure

Point 2: The wage bill for her trainer, dietician and personal minders is paid one month in arrears and came to £30,000 each month.

Point 3: Tournament entry fees, all paid, totalled £10,000. These included her entry fee of £2,000 for next month's Champion of Champions event in Edinburgh. Travelling expenses for the nine-month period came to £95,000. All bills had been settled.

Point 4: On July 1st 20x7, Nanna purchased, in cash, a dozen graphite shafted tennis racquets worth a total of £24,000. These will last her three years but they will then all have to be replaced. Nanna would like you to highlight these as a non-current asset in her business accounts.

Point 5: Nanna paid £5,000 during the period for cat-gut strings and labour to repair her racquets. In addition, she still owes her stringer £1,000 for work carried out at the Toyota classic event in February 20x8.

Financing

Point 6: Kovakourni Ltd was set up when three investors each bought 20,000 £1 shares in the company. The investors do not anticipate receiving a dividend in the first trading period.

Problem 1: Prepare an income statement for the period July 1st 20x7 to 31st March 20x8.