this example is based on the financial statements and budgets for a sole trader ndas 611310

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:

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 Get an essay WRITTEN FOR YOU, Plagiarism free, and by an EXPERT! Just from $10/Page Order Essay
	£	£	£
Non-current assets
Premises			50,000
Equipment		20,000
Less Depreciation		14,000	6,000
			56,000
Current assets
Inventory	5,500
Trade receivables	11,000
Cash at bank	4,750	21,250
Current liabilities
Trade payables		9,000	12,250
Net assets			68,250
Capital			50,000
Add Net profit			25,000
			75,000
Less Drawings			6,750
			68,250

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:

	Jan	Feb	Mar	Apr	May	Jun
Sales (£)	15,000	24,000	29,000	34,000	34,000	36,000
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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