This example is based on the financial statements and budgets for a sole trader – I Yates – for the six months to 30 June 2018. Here is the balance sheet at the end of December 2017:
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I Yates Balance sheet as at 31 December 2017 Don't use plagiarized sources. Get Your Custom Essay on
this example is based on the financial statements and budgets for a sole trader ndas 611310
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£ |
£ |
£ |
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Non-current assets |
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Premises |
50,000 |
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Equipment |
20,000 |
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Less Depreciation |
14,000 |
6,000 |
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56,000 |
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Current assets |
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Inventory |
5,500 |
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Trade receivables |
11,000 |
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Cash at bank |
4,750 |
21,250 |
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Current liabilities |
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Trade payables |
9,000 |
12,250 |
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Net assets |
68,250 |
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Capital |
50,000 |
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Add Net profit |
25,000 |
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75,000 |
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Less Drawings |
6,750 |
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68,250 |
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Additional information:
1Sales and purchases are all on credit – with one month’s credit being allowed by us and by our suppliers.
2Expected sales and purchases are as follows:
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Jan |
Feb |
Mar |
Apr |
May |
Jun |
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Sales (£) |
15,000 |
24,000 |
29,000 |
34,000 |
34,000 |
36,000 |
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Purchases (C) |
12,000 |
18,000 |
20,000 |
26,000 |
28,000 |
35,000 |
3The owner takes personal cash drawings each month of £500.
4Wages and salaries amount to £2,400 each month.
5Insurance of £100 is paid each month.
6Overheads are £300 per month and are paid when they are due.
7New equipment is purchased on 1 March 2007 for £6,000. Equipment is to be depreciated at 10% on cost – one month’s ownership equals one month’s depreciation.
8Rent of £400 is received each quarter on 1 January and 1 April.
9Inventory in trade on 30 June 2018 was valued at £5,700.
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