Below is the trail balance of Star Ltd as at 31st December 2022. Trial Balance Account Name Debit $ Credit S Sales 640,000 Sales Return 17,000 Opening inventory 96,000 Purchases 252,000 Purchases return 32,000 Non-Current assets at cost: Freehold property 150,000 Equipment 48,000 Motor Vehicles 28,000 Accumulated depreciation on: Equipment 12,000 Motor vehicles 10,000 Salaries and wages 14,000 Insurance 6,000 Advertising expenses 9,000 Motor expenses 3,000 Loan interest 8,000 Receivables 72,000 Allowances for receivables. 4,000 Payables 56,000 Cash at bank 311,000 Bank loan 100,000 Capital 160,000 1,014,000 1,014,000 Additional information is provided for use in preparing the company's adjustments: 1. Closing inventory is valued at $65,000. 2. Equipment is depreciated by 25% on straight line basis. 3. Motor vehicles are depreciated by 30% on reducing balance basis. 4. Accrued wages at the end of 2022 amount to $2,600. 5. On 1st April 2022 Adam paid $3,000 for insurance which was valid until 31st March 2023. 6. Irrecoverable receivables of $1,600 need to be write off. 7. Adam decides to increase allowances for receivables to $5,000. 8. Adam has taken goods worth $15,000 for his own use. Required: 1. Prepare income statement for the year ended December 31st, 2022.
Below is the trail balance of Star Ltd as at 31st December 2022. Trial Balance Account Name Debit $ Credit S Sales 640,000 Sales Return 17,000 Opening inventory 96,000 Purchases 252,000 Purchases return 32,000 Non-Current assets at cost: Freehold property 150,000 Equipment 48,000 Motor Vehicles 28,000 Accumulated depreciation on: Equipment 12,000 Motor vehicles 10,000 Salaries and wages 14,000 Insurance 6,000 Advertising expenses 9,000 Motor expenses 3,000 Loan interest 8,000 Receivables 72,000 Allowances for receivables. 4,000 Payables 56,000 Cash at bank 311,000 Bank loan 100,000 Capital 160,000 1,014,000 1,014,000 Additional information is provided for use in preparing the company's adjustments: 1. Closing inventory is valued at $65,000. 2. Equipment is depreciated by 25% on straight line basis. 3. Motor vehicles are depreciated by 30% on reducing balance basis. 4. Accrued wages at the end of 2022 amount to $2,600. 5. On 1st April 2022 Adam paid $3,000 for insurance which was valid until 31st March 2023. 6. Irrecoverable receivables of $1,600 need to be write off. 7. Adam decides to increase allowances for receivables to $5,000. 8. Adam has taken goods worth $15,000 for his own use. Required: 1. Prepare income statement for the year ended December 31st, 2022.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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please answer in text with explanation and workings and in proper format
Transcribed Image Text:Below is the trail balance of Star Ltd as at 31st December 2022.
Trial Balance
Account Name
Debit $
Credit S
Sales
640,000
Sales Return
17,000
Opening inventory
96,000
Purchases
252,000
Purchases return
32,000
Non-Current assets at cost:
Freehold property
150,000
Equipment
48,000
Motor Vehicles
28,000
Accumulated depreciation on:
Equipment
12,000
Motor vehicles
10,000
Salaries and wages
14,000
Insurance
6,000
Advertising expenses
9,000
Motor expenses
3,000
Loan interest
8,000
Receivables
72,000
Allowances for receivables.
4,000
Payables
56,000
Cash at bank
311,000
Bank loan
100,000
Capital
160,000
1,014,000
1,014,000
Additional information is provided for use in preparing the company's adjustments:
1. Closing inventory is valued at $65,000.
2. Equipment is depreciated by 25% on straight line basis.
3. Motor vehicles are depreciated by 30% on reducing balance basis.
4. Accrued wages at the end of 2022 amount to $2,600.
5. On 1st April 2022 Adam paid $3,000 for insurance which was valid until 31st March
2023.
6. Irrecoverable receivables of $1,600 need to be write off.
7. Adam decides to increase allowances for receivables to $5,000.
8. Adam has taken goods worth $15,000 for his own use.
Required:
1. Prepare income statement for the year ended December 31st, 2022.
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