Question

It Financial statements (40 points) From the following information of the accountira book of Hope Dunn, draw up (1) an Income statement for the year pode December 2019 in) - 20 points (2) Prepare a Balance Sheet as at 31 December 2019 in €) -20 points (3) Before preparation of financial statement please take into account additional information that is given below 400.000 91.000 255,000 35.000 51.000 16.000 22 000 3.500 19.000 800 4,070 15 000 2,600 Premises Purchases Sales Fixtures and Fittings Motor Cars Allowance for Depreciation - Foctures and Fittings Motor Cars Bank Stock of goods at 1st January 2019 Cash Postage expenses Rent Return outwards Return inwards General expenses Discount Allowed Discount Received Accounts Payable (Trade creditors) Loan Interest Capital Salaries Insurance Motor expenses Accounts Receivable Trade Debtors) Commission Received Carriage Inwards Carriage Outwards Drawings Bank Loan (till 2022) Total 1,100 11.250 2.600 1.250 29 450 13 200 200,000 27. 200 3400 8.100 44 500 12,000 1,550 930 25000 220.000 758,200 758,200 Additional information as at 31 December, 2019 (Adistment is also available 1. Closing stocks €23.000 2. Motor expenses owing 6250 F450 3. Insurance prepaid €500 4. Rent prepaid 5 Motor Cars are to be depreciated at 25% per annum on cost 6. Factures and Fittings are to be depreciated 15% at cost 7. Premises are nor depreciated.

Answer 1

1. Income Statement

Purchases Less: Discount received Less: Return Outwards: Net Purchases 91000 1250 2,500 87,250 251300 Gross Sales Less: Sales Returns and Less: Allowances Net Sales 255000 1100 2,600 251,300 Income Statement Hope Dunn Year ended 31 December 2019 Financial Statements in Euro Revenue Gross Sales 255000 Less: Sales Returns and Allowano 3700 Net Sales Cost of Goods Sold Beginning Inventory Add Purchases 87250 Freight-in 1550 Inventory Available 88800 Less: Ending Inventory 1 23000 Cost of Goods Sold Gross Profit (Loss) Expenses Carriage Outward 930 Depreciation 18000 Insurance 2950 Interest 13200 General Expenses 11250 Postage Expenses 4070 Rent 14500 Motor Expenses 8350 Salaries 27200 Total Expenses Net Operating Income 65800 185500 Motor Expenses Add: Outstanding Exp 8100 250 8,350 Insurance Less: Prepaid Insurance 3400 450 2,950 100450 85050 Rent Less: Prepaid Rent 15000 500 14,500 Other Income Gain (Loss) on Sale of Assets Commission Received Total Other Income 0 12000 12000 97050 Net Income (Loss)

2. Balance Sheet

Hope Dunn As On 31 December 2019 (In Euro) BALANCE SHEET ASSETS Current Assets Cash 800 38,000 Inventories Add: Closing Stock 19,000 23000 42,000 Accumulated depreciation (Negative Value) Add: Motor Car Add: Furniture and fixtures 12750 5250 -56,000 3,500 42,000 44,500 500 450 91,750 Bank Inventories Accounts receivable Prepaid Rent Prepaid Insurance Total Current Assets Fized Assets Premises Fixtures and Fittings Motor Cars Less accumulated depreciation (Negative Value) Total Assets TOTAL ASSETS LIABILITIES AND OWNER'S EQUITY Current Liabilities Accounts payable Accrued Motor Exp Total Current Liabilities Long-Term Liabilities 400,000 35,000 51,000 -56,000 430,000 521,750 29,450 250 29,700 220,000 220,000 Bank Loan Total Long-Term Liabilities Oner's Equity Owner's investment Less Drawings Add: Net Income Total Owner's Equity TOTAL LIABILITIES AND OWNER'S EQUITY 200,000 - 25,000 97,050 272,050 521,750

Purchases Less: Discount received Less: Return Outwards: Net Purchases 91000 1250 2,500 87,250 251300 Gross Sales Less: Sales Returns and Less: Allowances Net Sales 255000 1100 2,600 251,300 Income Statement Hope Dunn Year ended 31 December 2019 Financial Statements in Euro Revenue Gross Sales 255000 Less: Sales Returns and Allowano 3700 Net Sales Cost of Goods Sold Beginning Inventory Add Purchases 87250 Freight-in 1550 Inventory Available 88800 Less: Ending Inventory 1 23000 Cost of Goods Sold Gross Profit (Loss) Expenses Carriage Outward 930 Depreciation 18000 Insurance 2950 Interest 13200 General Expenses 11250 Postage Expenses 4070 Rent 14500 Motor Expenses 8350 Salaries 27200 Total Expenses Net Operating Income 65800 185500 Motor Expenses Add: Outstanding Exp 8100 250 8,350 Insurance Less: Prepaid Insurance 3400 450 2,950 100450 85050 Rent Less: Prepaid Rent 15000 500 14,500 Other Income Gain (Loss) on Sale of Assets Commission Received Total Other Income 0 12000 12000 97050 Net Income (Loss)

Hope Dunn As On 31 December 2019 (In Euro) BALANCE SHEET ASSETS Current Assets Cash 800 Inventories 19,000 38,000 Accumulated depreciation (Negative Value) Add: Motor Car Add: Furniture and Add: Closing Stock 230001 42,000 Bank Inventories Accounts receivable Prepaid Insurance Total Current Assets Fized Assets Premises Fixtures and Fittings Motor Cars Less accumulated depreciation (Negative Value) 3,500 42,000 44,500 450 91,250 12750 5250 -56,000 400,000 35,000 51,000 -56,000 430,000 Total Assets TOTAL ASSETS 521,250 LIABILITIES AND OWNER'S EQUITY Current Liabilities Accounts payable Accrued Motor Exp Total Current Liabilities Long-Term Liabilities 29,450 250 29,700 Bank Loan Total Long-Term Liabilities Oner's Equity 220,000 220,000 Owner's investment Less Drawings Total Owner's Equity TOTAL LIABILITIES AND OWNER'S EQUITY 200,000 - 25,000 175,000 521,250