part3 © Financial statements nose goods that were Sold. These costs neue the cost Fen eo gng goods purchased sto the goods inet were FO for ed in corm rafad goods The oly costs you inde are oss that ne aipot yet been sold are not included. You do not rela te ther costs ofthe busines, such as postage, Motor xe, Siice expenses, salaries of managers, and Inc ee or do you nude any oss relating tothe purchase ofS rany assets, such 2s motor vehicles, wear ter, macniney,fatures and fitngs, and buleings _ You only inlude the costs that were incurred in creating 8 TP baying those goods and any costs incur Skample, the costs of converting rey mat aaa ie the goods 201d. The costs relating to goods Cost of goods purchased Sales Gross profit/(Gross oss) £ € £ A 9,820 10676 856 B 7530 14307 6.117 c 10,500 19370 8.370 D 9,580 9,380 (230) E 8,760 17,200 8,400 2 Other revenues Expenses Net profit/(Net loss) £ £ £ A - 2,622 (1,766) B 4,280 2,800 3257 c 500 2,500 6870 D 7 4.780 2010) e 3,260 2.480 9,260 £94,368, Tats, £10,000 + £13,381 — (E7288 ~ £0) — ELIT? £800. Review questions sii reom te ftowing Wal bxlancs of ua acd fe O98 104 S00 OPN” an 28.3 from the febeme yar ening 31 Oboe 20196 balance shes ENeL required ‘rial balance as a¢ 31 October 2019 sales Purchases 60,400 Salaries 29,300 Motor expenses 1,200 Rent 950 Insurance 150 General expenses 85 Premises 47,800 ‘Motor vehicles 13,600 ‘Accounts receivable 13,400 ‘aecounts payable 8,800 ‘cash at bank 2,200 ash in hand 300 Drawings 4200 capital 85538 yyases | 170.585 Inventory at 31 October 2019 was £15,600, coup your answer it wil be used later in Review Question 12 1) 196Chapter 14 @ Income statements | 14.2 From the following trial balance of G. Foot after his first year’s trading, you are required to vs Shera ara cae ang ayo mat anc teet nec ied aoe prenemaieeerieriots 1 do not Dr. o | vehi é 7 hile, Sales 266,000 Mths a =F Ps Br tail alii escent et eats ad meas on Pete een ra rH cre reskable vine cee 3 eee sao “ cnanent 15000 eons sen Wool nanneneae Fo st en | ES Inventory at 30 June 2019 was £18,000. (Keep your answer; it will be used later In Review Question 15.2.) 14.3A _Fromthe following tral balance of F. Dover dravin-up on conclusion of his first year in busi i ‘ness, draw up an income statement for the year ending 31 May 2020. A balance sheet is not required. ae ‘Wial balance as at 31 May 2020 br £ e General expenses 610 Business rates 4,800 Motor expenses 11220 Salaries 73,120 Insurance 2,480 Purchases 242,080 j Sales 471,624 q Car 8,600 ] Accounts payable 22,400 ‘Accounts receivable 42,160 Premises 105,000 Cash at bank 5,430 Cash In hand 650 Capital 46,526 Drawings 46,800 ans H40550 Inventory at 31 May 2020 was £28,972. (Keep your answer; it will be used later In Review Quastion 15.3) 197Part © Financial statements 14.40 Extract an income statement for the year ending 30 June 2019 for G, Graham. The trial balance as at 30 June 2019 after his first year of trading was as follows: or & £ £ Equipment rental 940 Insurance 1,804 Lighting and heating expenses 11990 Motor expenses 2,350 Salaries end wages 48,580 Sales Purchases 205,950 Sundry expenses 624 Lorry 19,400 ‘Accounts payable Accounts receivable 44516 Fixtures 4,600 shop 174,000 Cash at bank 11346 Drawings 44,000 Capital Inventory at 30 June 2019 was £29,304, (Keep your answer it will be used later in Review Question 15.4.) 14.5 Royston starts his own business on 1 September, operating as a wholesaler of novelty goods. His transactions during September were as follows: sept Required: “Transfers £750 of his savings into a business bank account. Borrows £3,000 from LloydWest Bank, repayable in three years’ time, Pays £320 to hire a van for September, using debit card. Buys essential IT equipment for the business, paying £2,200 by debit card. Buys goods for resale, paying by cheque £760 Buys goods for resale £570 on time from J. Collins Sells goods for £930; customer pays by cheque. Returns unsatisfactory goods to 1. Collin, ariginal cast of which was £120. Buys goods for resale on time from M. Pembridge, £850. Sells goods on time £1,770 to E. Barrett Pays £450 cheque to J. Collins. Receives £590 cheque from E. Barrett on account. Takes £280 from business bank account to pay for personal living expenses. Pays staff wages for September, £410 by cheque. (a) Record all the transactions and balance-off the accounts. (8) Prepare a Ti Balance as at the end of the month (0) Assuming that the closing inventory has been counted and valued at cost totalling £570, prepere an Income Statement for the month, (Keap your answer; it will be used later in Review Question 15.7.)