Capital
20,000
Bank
10,000
Motor Expenses
4,300
Sales
65,500
Closing Inventory
10,800
Office Expenses
2,200
Wages Expenses
15,000
Payables
2,500
Receivables
1,100
Rent and Rates
12,000
Heat and Light Expenses
4,800
Loan from Bank
20,000
Purchases of stock
32,800
Delivery Van
10,000
Office Furniture
5,000
Based on the information provided, the financial statement for the business would be as follows:
Income Statement:
Sales: $65,500
Less: Cost of Goods Sold
Opening Inventory: $20,000
Purchases of stock: $32,800
Closing Inventory: $10,800
Total Cost of Goods Sold: $42,000
Gross Profit: $23,500
Expenses:
Motor Expenses: $4,300
Office Expenses: $2,200
Wages Expenses: $15,000
Rent and Rates: $12,000
Heat and Light Expenses: $4,800
Total Expenses: $38,300
Net Income: $23,500 - $38,300 = -$14,800
Balance Sheet:
Assets:
Cash (Bank): $10,000
Receivables: $1,100
Delivery Van: $10,000
Office Furniture: $5,000
Total Assets: $26,100
Liabilities:
Payables: $2,500
Loan from Bank: $20,000
Total Liabilities: $22,500
Owner's Equity:
Capital: $20,000
Total Liabilities and Owner's Equity: $20,000 (Capital) + $22,500 (Liabilities) = $42,500
This financial statement shows that the business has a negative net income of -$14,800, indicating that the business incurred more expenses than it generated in sales. The business has total assets of $26,100 and total liabilities and owner's equity of $42,500.