Reference no: EM132710619

Question - Jai Lee has established a sole proprietorship business named Jai Lee Legal Services. Jia offers legal services to small and medium sized businesses. The following information relates to the business activities and account balances for the financial year ended 30 September 2020:

Account:

Creditors 960

Debtors 1,570

Accumulated depreciation - office equipment 6,950

Accumulated depreciation - vehicle 9,250

Marketing expenses 510

Capital - Jai Lee 18,500

Cash at bank 8,445

Office equipment 9,250

Depreciation expense - office equipment 1,650

Depreciation expense - vehicle 2,750

Drawings 5,520

Bank loan 4,500

Vehicle 26,750

Vehicle expense 330

Office supplies 1,625

Office supplies used 840

Mobile phone charges 255

Legal services fees earned 9,750

Required -

a) Provide a Statement of Profit or Loss for the year ended 30 September 2020.

b) Explain to Jai Lee how the Statement of Profit or Loss and Statement of Financial Position can be used to help better manage his business. Provide examples.