Question

- BA is a sole trader. The business's trial balance on 31 December 2018 is as follows: Debit Credit Capital 121,600 22,000 Motor vehicles at cost Depreciation to 1 January 2018 Equipment at cost Depreciation to 1 January 2018 Inventory as at1 January 2018 Trade receivables Trade payables 44,000 102,000 15,000 9,000 22,500 51,000 42,000 Sundry expenses 8,500 14,000 5,000 64,000 Heating and lighting Wages and salaries 3,300 428,000 302,000 2,000 Purchases returns Carriage inwards Carriage outwards Provision for doubtful debts 1,000 4,000 631,400 631,400 The following additional information as at 31 December 2018 is available: 400 is owed for heating and lighting expenses. i 700 has been prepaid for rent. i nventory at 31 December 2018 was valued £16,500. ouwmThe Motor vehicles are to be depreciated at 20% on cost and the equipment at 10% on cost. it is decided that a bad debt of t 1,200 should be written off, and that the allowance for doubtful debts should be increased to t 4,500.

Answer 1

Income statement is that part of financial statement which evaluates the net profit from the business and balance sheet is the evaluation and presentation of assets and liabilities that the business possesses.