Question 1 (70 marks) The following trial balance has been extracted from the ledger of K. Chaffinch, a sole trader, as

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Question 1 70 Marks The Following Trial Balance Has Been Extracted From The Ledger Of K Chaffinch A Sole Trader As 1 (68.98 KiB) Viewed 35 times

Question 1 (70 marks) The following trial balance has been extracted from the ledger of K. Chaffinch, a sole trader, as at 31 March 2022, the end of her most recent financial year. Debit £ 76,000 52,000 Credit £ 28,000 26,000 16,000 248,000 418,000 2,560 3,280 Vehicles, at cost Furniture and fittings, at cost Provision for depreciation (as at 1 April 2021): - Vehicles Furniture and fittings Inventories as at 1 April 2021 Purchases Sales revenue Returns inwards Discounts received Wages and salaries Rent Loan interest Carriage outwards Carriage inwards Other operating expenses Trade receivables Trade payables Allowance for irrecoverable receivables Cash on hand Cash at bank Drawings 5-year bank loan Capital, as at 1 April 2021 42,600 24,000 1,200 4,320 3,540 43,600 26,320 26,300 420 250 8,610 18,000 40,000 25,000 567.000 567.000
The following additional information as at 31 March, 2022 is available: 1. Closing inventory as at 31 March 2022 is valued at £17,200 2. Depreciation is calculated at the end of the year and is calculated as follows: Vehicles: 25% per annum using the reducing balance method. No vehicles were bought or sold during the financial year Fixtures and fittings: 20% per annum using the straight-line method Fixtures with a cost of £8,000 and accumulated depreciation of £5,000 was sold for £2,000 on 2 March 2022. No entries regarding the disposal have been recorded in the ledgers The business has a policy of not providing for depreciation in the year of disposal. 3. Loan interest of £800 has still to be paid 4. Other operating expenses include an insurance payment for £3,600 which relates to the year ended March 2023. 5. An irrecoverable receivable/bad debt of £320 is to be written off and the allowance for irrecoverable receivables is to be adjusted to 2% of trade receivables at 31 March 2022 6. K. Chaffinch took £500 from the business bank account to spend on personal items. No entries have been made in the ledgers of K. Chaffinch. 1a) Prepare the following financial statements for K. Chaffinch: Statement of profit or loss for K. Chaffinch for the year ending 31 March 2022 (28 marks) Statement of financial position for K. Chaffinch as at 31 March 2022 (26 marks)