The Swift Company has just completed its operations for September 2005. The company's accountant resigned two weeks ago, subsequently a very inexperienced clerk has prepared the following income statement of the month's activities:

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The Swift Company has just completed its operations for September 2005. The company's accountant resigned two weeks ago, subsequently a very inexperienced clerk has prepared the following income statement of the month's activities:

Cash book summary

Opening balance

Cash sales

Interest

Additional capital introduced

Rental of premises

Trade creditors (all for purchases)

Telephone and postage

Trade debtors (all in respect of sales)

Office furniture (purchased 1 July 2005)

Carriage inwards

Drawings

Printing and stationery

Salaries (Office)

Insurance

Closing balances

R

36 280

890

25 000

77 470

R

13 600

470

2 220

48 875

2 160

2 900

4 980

16 675

450

14 800

3 840

28 670

139 640

Extracts from ledger balances

Opening balances

Closing balances

(01/01/2005)

(31/12/2005)

Trade debtors

Trade creditors

Capital account  Sandy Dandy

Stock

Accruals

Telephone

Rent

Carriage inwards

Prepayment

Rent

Insurance

Office furniture and equipment

Accumulated depreciation

R

9 680

8 190

1 800

9 800

110

490

180

1 730

6 230

3 430

R

10 930

9 770

7 245

220

190

2 220

Additional information

 Office furniture and equipment is to be depreciated at 10% p.a. (reducing balance method).

 Additions during the year are depreciated at half the annual rate.

 Debts totalling R1 725 are considered to be bad and are to be written off.

 Sandy agreed to provide a bonus of R770 for the bookkeeper.

Required

(a) Income statement for the year ended 31 December 2005.

(b) Balance sheet at 31 December 2005.

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The following extracts were made from the books and records of Sandy Dandy for the year ended 31 December 2005:

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The Swift Company has just completed its operations for September 2005. The company's accountant resigned two weeks ago, subsequently a very inexperienced clerk has prepared the following income statement of the month's activities:

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The following extracts were made from the books and records of Sandy Dandy for the year ended 31 December 2005: 1. Cash book summary

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