John Hanning owns a small hotel. The following balances were taken from his books on 31...

John Hanning owns a small hotel. The following balances were taken from his books on 31 December 2016

Takings (Sales)
Premises, at Cost
Fixtures and Fittings at cost

Minibus
Provision for depreciation, 1 January 2016: Fixtures and fittings

Minibus
Stock of wine, 1 January 2016 Debtors
Creditors
Bank overdraft
Cash in hand
Wages
Cleaning
Purchase of food and wine Running expenses of minibus Bank interest (Dr Balance) Advertising
General expenses
Capital

Drawings

283,670.00 396,000.00 100,000.00

10,000.00

45,600.00 3,600.00 1,200.00 6,500.00 3,970.00

16,450.00 700.00 61,020.00 27,830.00 121,700.00 4,800.00 1,520.00 5,880.00 13,140.00 427,000.00 30,000.00

Page 2 of 6

Additional information:

Depreciation policies:

The fixtures and fittings should be depreciated at 15% on cost. The minibus should be depreciated at 20% of the written down value.
$3,000 of the total for the purchase of food and wine was in respect of food used by Larsen and his family.
Stock of wine at 31 December 2016 was $1,340.
Bank interest of $280 had accrued at 31 December 2016.
Advertising, costing $900, had been paid in December 2016. This was for advertising leaflets to be published in 2017.
Bad debts, $1,190, were to be written off.

REQUIRED

(a) Prepare the Income Statement for the year ended 31 December 2016.

[20 Marks]
(b) Prepare the Statement of Financial Position as at 31 December 2016.

[20 Marks]

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

The following balances were taken from the books of Sheffield Corp. on December 31, 2017. Interest...

The following balances were taken from the books of Sheffield Corp. on December 31, 2017. Interest revenue $87,000 Accumulated depreciation—equipment $41,000 Cash 52,000 Accumulated depreciation—buildings 29,000 Sales revenue 1,381,000 Notes receivable 156,000 Accounts receivable 151,000 Selling expenses 195,000 Prepaid insurance 21,000 Accounts payable 171,000 Sales returns and allowances 151,000 Bonds payable 101,000 Allowance for doubtful accounts 8,000 Administrative and general expenses 98,000 Sales discounts 46,000 Accrued liabilities 33,000 Land 101,000 Interest expense 61,000 Equipment 201,000 Notes payable 101,000 Buildings 141,000...

The following balances were taken from the books of Oriole Corp. on December 31, 2020. Interest...

The following balances were taken from the books of Oriole Corp. on December 31, 2020. Interest revenue $87,950 Accumulated depreciation—equipment $41,950 Cash 52,950 Accumulated depreciation—buildings 29,950 Sales revenue 1,381,950 Notes receivable 156,950 Accounts receivable 151,950 Selling expenses 195,950 Prepaid insurance 21,950 Accounts payable 171,950 Sales returns and allowances 151,950 Bonds payable 101,950 Allowance for doubtful accounts 8,950 Administrative and general expenses 98,950 Sales discounts 46,950 Accrued liabilities 33,950 Land 101,950 Interest expense 61,950 Equipment 201,950 Notes payable 101,950 Buildings 141,950...

The following balances were taken from the books of Shamrock Corp. on December 31, 2017. Interest...

The following balances were taken from the books of Shamrock Corp. on December 31, 2017. Interest revenue $87,050 Accumulated depreciation—equipment $41,050 Cash 52,050 Accumulated depreciation—buildings 29,050 Sales revenue 1,381,050 Notes receivable 156,050 Accounts receivable 151,050 Selling expenses 195,050 Prepaid insurance 21,050 Accounts payable 171,050 Sales returns and allowances 151,050 Bonds payable 101,050 Allowance for doubtful accounts 8,050 Administrative and general expenses 98,050 Sales discounts 46,050 Accrued liabilities 33,050 Land 101,050 Interest expense 61,050 Equipment 201,050 Notes payable 101,050 Buildings 141,050...

The following balances were taken from the books of Alonzo Corp. on December 31, 2017. Interest...

The following balances were taken from the books of Alonzo Corp. on December 31, 2017. Interest revenue $86,000 Accumulated depreciation—equipment $40,000 Cash 51,000 Accumulated depreciation—buildings 28,000 Sales revenue 1,380,000 Notes receivable 155,000 Accounts receivable 150,000 Selling expenses 194,000 Prepaid insurance 20,000 Accounts payable 170,000 Sales returns and allowances 150,000 Bonds payable 100,000 Allowance for doubtful accounts 7,000 Administrative and general expenses 97,000 Sales discounts 45,000 Accrued liabilities 32,000 Land 100,000 Interest expense 60,000 Equipment 200,000 Notes payable 100,000 Buildings 140,000...

Wang Yee is a manufacturer. The following balances were extracted from his books on 31 January...

Wang Yee is a manufacturer. The following balances were extracted from his books on 31 January 2010. $ Inventories (stocks) 1 February 2009 Raw materials 14 700 Work in progress 23 570 Finished goods 35 000 Purchases of raw materials 75 600 Purchases of finished goods 15 500 Direct factory wages 62 140 Rent 28 000 Factory management salaries 31 500 Office salaries 41 600 Revenue (sales) 342 500 Revenue (sales returns) 1 250 Distribution costs 28 650 Sundry office...

The following account balances are taken from the books of Country Club on 31 December 2017....

The following account balances are taken from the books of Country Club on 31 December 2017. Revenues and expenses are for the year ended 31 December 2017. The retained profits balance is as at 1 January 2017. Account Value ($) Accounts Receivable 29826 Accounts Payable 25242 Promotional Expense 54245 Cash 5420.0 Food Sales 15215 Cost of food sold 13080 Dividend payments 8138 Electricity Expense 6385 Furniture and fittings 42,500 Inventory 22,500 Land and buildings 75,000 Bank loan payable 43,750 Equipment...

“The following balances were taken from Jane's books who is a sole trader and operates a...

“The following balances were taken from Jane's books who is a sole trader and operates a catering business. Jane's trial balance for the year to 30th June 2019 was as follows: Trial Balance Dr (£) Cr (£) Equipment at cost 42,000 Accumulated depreciation of equipment as at 1st July 2018 35,000 Inventory as at 1st July 2018 50,800 Debtors 32,000 Bank / cash 112,678 Creditors 23,027 Provision for doubtful debts as at 1st July 2018 1,280 Long term...

On 31 March 2018, the following balances were taken from the trial balance of Isaac Trading...

On 31 March 2018, the following balances were taken from the trial balance of Isaac Trading Limited: Accounts receivable $400,000 Allowance for doubtful debts $19,500 Net credit sales $5,200,000 Isaac Trading uses the allowance method for accounting for bad debts and identifies the amount on the basis of 5% of net credit sales. The above accounts receivable includes $6,000 due from XYZ Ltd which was outstanding for more than 150 days. On 31 March 2018, Isaac Trading received...

The following adjusted balances were taken from the ledgerof EBC Trading on December 31, 2016 ....

The following adjusted balances were taken from the ledgerof EBC Trading on December 31, 2016 . Here are the entries, Cash 350,000. Accounts Receivable 33,950. Interest receivable 1,500. Merchandise , January 1 50,000. Supplies 2,650. Prepaid rent 40,000. Equipment 75,000. Accumulated Depreciation 25,000.Accounts Payable 15,000. Notes Payable 10,000. Interest Payable 1,000. E. Capital 50,000. E. Drawing 10,000. B Capital 75,000. B Drawing15,000. C Capital 100,000. Sales 980,650. Sales Discount 5,500. Sales Returns 3,500. Purchases 455,000. Purchase Returns 7,500.Purchase Discount 3,300....

QUESTION THREE [20] The following list of balances was taken from the books of Orange Traders,...

QUESTION THREE [20] The following list of balances was taken from the books of Orange Traders, a fruit and vegetable distributor as at 28 FEBRUARY 2019, the end of the financial year: Capital 60500 Drawings 3 400 Loan: NRB 70 000 Inventory: 1 March 2018 13 760 Provision for bad debts 150 Sales 250620 Purchases 116040 Sales returns 250 Purchases returns 1 150 Rent income 10 500 Salaries and wages 77 500 Railage on sales 1 600 Interest on loan...

Subjects