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Hi can you please help me with this question
Patrick Daley carries on business as a retail trader. The trail balance of his business as at 31 December 2017 was as followsDr Cr
$ $
Capital 255,600
Sales and Purchase 266,800 365,200
Inventory at 1 January 2017 23,340
Returns 1,200 1,600
Wages 46,160
Rent 13,000
Motor 3,720
Insurance 760
Irrecoverable Debts 120
Allowance for receivables:
1 January 2017 588
Discounts 864 1,622
Light and Heat 3,074
Bank overdraft Interest 74
Motor Vehicles at cost 24,000
Accumulated Depreciation 12,240
Fixture and Fittings 28,000
Accumulated depreciation 16,800
Land 100,000
Receivables and payables 17,330 23,004
Bank 3,412
Buildings at Cost 100,000
Accumulated
Depreciation 1 Jan 2017 6,000
Drawings 20,800
652 654 652 654
You are given the following additional information:
Inventory at 31 December 2017 was $25,680.
Rent was prepaid by $1,000 and light and heat owed was $460 at 31 Decembers 2017
Land is to be revalued to $250,000 at 31 Decembers 2017
Following a final review of the receivables at 31 December 2017, P. Daley decides to write off another debt of $130. He also wishes to maintain the allowance for receivables at 3% of the year-end balance.
Depreciation is to be provided as follows
Building -2% annually, straight –line Fixtures &Fittings Straight line method, assuming a useful economic life of five years with no residual value
Motor vehicles-30% annually on a reducing balance basis.
Full year’s Depreciation is charged in the year of acquisition and none in the year of disposal.Prepare The statement of profit or loss for the year ended 31 December 2017 and a statement of financial position as at that date for Patrick Daley. (40 marks)