Suria

Income statement for the year ended 31 March 2016

£ £
Revenue (Sales) 287000
Less: Return inwards 3150
283850
Less: Opening Inventory 15340
Add: Purchases 143800
159140
Less: Closing inventory 17990
Cost of sales 141150
Gross Profit 142700
Add: other incomes, commission receivable (w1) 6300
149000
Less: Expenses
Wages and salaries 26500
Computer expenses (W2) 4200
Rent and Rates 10000
Bank Loan interest (W3) 2400
Heat and light 7300
Advertising (W4) 8800
Provision for Depreciation:
Leasehold premises (W5) 4000
Computer (W6) 8850
Office furniture 1550
General Expenses 11100
Bad debts 1900
Increase in provision for doubtful debts (W8) 130 86730

Profit for the year 62270

WORKINGS
(W1) Commission receivable = $49000 +$1400 = $6300
(W2) Computer expenses = $12200 - $8000 = $4200
(W3) Bank loan interest = $40000*6% = $2400
4
(W4) Advertising = 57000 ∗ 6 = $3800 𝑝𝑟𝑒𝑝𝑎𝑖𝑑 𝑓𝑜𝑟 4 𝑚𝑜𝑛𝑡ℎ𝑠

$12600-$3800 = $8800.
$100000
(W5) Provision for depreciation: Leasehold premises = = $4000 𝑝𝑒𝑟 𝑦𝑒𝑎𝑟
25

(W6) Computers book value: $44000 + $8000 =$52000

$52000-$16000 = $35400
Provision for depreciation = $35000*25% = 8850 per year
(W7) Provision for depreciation: office furniture = 15500*10% = $1550 per year.
(W8) Trade receivable = $27900 – $1900 = $26000
Provision for doubtful debts = $26000*4% = $1040 – balance b/d ($910) = $130 increase.
 Suria
Statement of Financial Position at March 2016
Cost Depreciation Book Value
to date
$ $ $
Non-current assets:
Leasehold premise at cost 100000 11000 (W9) 89000
Computers 52000 25450 (W10) 26550
Office furniture 15500 13550 (W11) 1950
167500 50000 117500

Current assets:
Inventory 17990
Trade receivable 26000 (W12)
Less: Provision for doubtful debts 1040 (W13) 24960
Other receivable 5200 (W14)
Cash and bank 520 48670
166170

Financed by:
Capital 70000
Add profit for the year 62270
132270
Less: Drawings 28000 104270

Current Liabilities:
Trade payables 18600
6% Bank loan 40000
Other payables 3300 (W15) 61900
166170

WORKINGS
(w9) Aggregate depreciation – Leasehold premises = $7000+$4000 = $11000
(w10) Aggregate depreciation – Computers = $16600+8850 = $25450
(w11) Aggregate depreciation – Office furniture = $12000+$1550 = 13550
(w12) Trade receivables = $27900 - $1900 = $26000
(w13) Current year provision for doubtful debts = $26000*4% = $1040
(w14) Other receivables = ($1400) commission receivable + ($3800) Advertising prepaid = $5200
(w15) Other payables = ($2400) Accrued general expenses +($900) Bank loan interest accrued =
$3300