Roger's business trades in water coolers for offices. At the end of his trading year to 31 December2021 he has 212 coolers in inventory. 96 of them are the deluxe model which costs Roger £156 topurchase from the manufacturer. The remainder cost £128 each.The business is run from rented warehouse premises.Roger supplies you with the following trial balance:Trade payablesSundry expensesWarehouse rentalSales representative's car30 7292 67812 62915 900Long-term loanCapital at 1 January 20215 00026 679Business rates1 920Revenue313 475Accumulated depreciation- Sales Car4,770Accumulated depreciation-Warehouse fixtures182Cash at bank1 826Water rates850Drawings18 214Sales representative's salaryAdministration expensesPurchases of water coolers26 2413 122233 668Trade receivables32 635Telephone2 961Travelling expenses1 820Loan interest250Insurance1729Inventory at 1 January 202125 620Warehouse fixtures1 820a. Depreciation is calculated at 30% on the reducing balance basis for the Sales representative car. b.Depreciation is calculated on the straight-line basis at 10% of cost for the Warehouse fixture c.Accruals are also required for telephone charges -£686d. Included in the administrative expense is £150 for professional fees and subscriptions total is to betreated as a prepayment. Also, £750 of the insurance relates to the next following accounting period.Required: Prepare an income statement and statement of financial position for Roger for the yearended 31 December 2021

Note: The Trial Balance mentioned in the question is not Balancing. The sum total of the debit side…

Roger's business trades in water coolers for offices. At the end of his trading year to 31 December 2021 he has 212 coolers in inventory. 96 of them are the deluxe model which costs Roger £156 to purchase from the manufacturer. The remainder cost £128 each. The business is run from rented warehouse premises. Roger supplies you with the following trial balance: Trade payables 30 729 Sundry expenses 2 678 Warehouse rental 12 629 Sales representative's car 15 900 Long-term loan 5 000 Capital at 1 January 2021 26 679 Business rates 1 920 Revenue 313 475 Accumulated depreciation- Sales Car 4,770 Accumulated depreciation-Warehouse fixtures 182 Cash at bank 1 826 Water rates 850 Drawings 18 214 26 241 Sales representative's salary Administration expenses 3 122 Purchases of water coolers 233 668 Trade receivables 32 635 Telephone Travelling expenses 2 961 1 820 Loan interest 250 Insurance 1729 Inventory at 1 January 2021 Warehouse fixtures 25 620 1 820 a. Depreciation is calculated at 30% on the reducing balance basis for the Sales representative car. b. Depreciation is calculated on the straight-line basis at 10% of cost for the Warehouse fixture c. Accruals are also required for telephone charges -£686 d. Included in the administrative expense is £150 for professional fees and subscriptions total is to be treated as a prepayment. Also, £750 of the insurance relates to the next following accounting period. Required: Prepare an income statement and statement of financial position for Roger for the year ended 31 December 2021

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

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